Report by the Comptroller and Auditor General NATIONAL AUDIT SICE

HM Land Registry: Review of Performance

Ordered by the House of Commons to be printed 28 March 1991 London: HMSO E5.50 net 350 HM LAND REGISTRY: REVIEW OF PERFORMANCE

This report has been prepared under Section 6 of the National Audit Act, 1983 for presentation to the House of Commons in accordance with Section 9 of the Act.

John Bourn Comptroller and Auditor General National Audit Office 21 March 1991

The Comptroller and Auditor General is the he

i HM LAND REGISTRY: REVIEW OF PERFORMANCE

Contents

Pages Summary and conclusions 1

Part 1: Introduction 4 Part 2: Manpower, productivity and standards of service 6

Part 3: Computerisation 11 Part 4: Funding and charging 13

Part 5: Planning and management 15

Annexes

1. Workload and productivity data 17

2. Productivity data 18 3. Transfers of work from Registries serving the south-east 19 4. Extracts from the Registry’s framework document 20 5. Extracts from current performance targets 22 HM LAND REGISTRY: REVIEW OF PERFORMANCE

Summary and conclusions

1. This report examines action taken by the Land Registry to deal with the issues raised in the 1987 National Audit Office report on the Registry’s operations. A large backlog of work had built up and the time taken to process substantive applications from the public had become unacceptable. During this period the Registry had given high priority to processing the time sensitive preliminary applications. There had been a heavy upsurge of work in the preceding years as a result of the boom in the housing market, and the Registry had not been able to recruit or train sufficient staff to meet this workload. Though productivity had increased, this had not been sufficient to handle the increased demand.

2. Following the National Audit Office report and the recommendations of the Committee of Public Accounts in their Thirty- second Report of Session 1987-88, it was accepted that the key areas for action were: . to reduce the backlog and improve standards of service (Part z of this report);

l to computerise systems (Part 3); . to review the fee structure and funding arrangements (Part 4); . to strengthen planning and management (Part 5).

3. The National Audit Office’s main findings and conclusions are as follows:

Reducing the backlog and improving standards of service (a) In 1988-89 and 1989-90 the Registry recruited 4,500 staff to tackle the backlog of work and to cope with normal staff turnover and the continuing rise in demand (paragraph 2.3). (b) The Registry set demanding annual targets for each district office. It tackled productivity by computerising records and procedures, by opening new offices in areas where good quality staff are more easily recruited and retained, and by improving staff training, management and working procedures (paragraph 2.7 and 2.9-2.21). (c) Over the four years to 1989-90 overall productivity increased by 7.1 per cent-slightly ahead of target - athough performance varied significantly between one District Registry and another (paragraph 2.8 and 2.14). (d) As a result of the record output and productivity levels, and also because of the substantial downturn in the housing market since 1988-89, the backlog of outstanding cases was reduced from a peak of 1,192,133 registrations in November 1988 to 712,231

1 registrations at 31 March 1990 and to an estimated 500,900 at 31 March 1991 (paragraph 2.4). (a) Service to customers has been substantially improved: the turn-round time for completing registrations has been reduced from twenty weeks to just under eight weeks: and 97 per cent of preliminary services are processed within four working days (paragraph 2.24). (f) The error rates recorded by the Registry are very low-about two per cent for registrations and only 0.05 per cent for preliminary services. However, these rates are based on errors returned by customers rather than statistical analysis of the Registry’s output (paragraphs ~~-223).

Computerising the system (g) The Registry has met its timetable for computerising the recording and processing of title. By the end of 1989 nine District Registries were running the system (paragraphs 3.2 and 3.3). The Registry remains on target to have all Registries computerised by the end of 1993. (h) Computerisation has significantly improved productivity and improved the level of service. The Registry has monitored productivity gains through its annual target setting exercise, rather than by monitoring performance against the expectations contained in the original investment appraisal. The project is now estimated to cost E43 million (paragraphs 3.4-3.7). (i) The Registry is continuing to give high priority to exploiting Information Technology to the full. It has recently been able to assign a Grade 5 full-time to this end. This will aid the Registry in its objective of basing its computer systems around a comprehensive, integrated database (paragraphs 3.8-3.11).

Fees and funding (j) The Registry has significantly reduced the time taken to introduce new fee orders. But other changesit would like to make, including the removal of the legal requirement to set fees based on the purchase price of property, must await enabling legislation (paragraphs 4.2 and 4.4). (k) The change to Agency status has not so far affected the financial and funding regime within which the Registry is required to operate; such changes must await its inauguration as a . Meanwhile it is still required to surrender any surplus income at the end of a financial year [paragraphs 4.5 to 4.8). (1) Some cross subsidies within the fee structure have been removed or reduced, but others remain. The Registry’s ad valorem fee structure means that some cross subsidisation still exists, but the Registry consider that alternative fee structures would generate other inequalities of at least as great a nature (paragraphs 4.9 to 4.12). 2 HM LAND REGISTRY: REVIEW OF PERFORMANCE

Planning and management (m) The principal aims of the Land Registry have been confirmed in a framework document and specific targets agreed with the Treasury against which the Registry’s performance will be measured (paragraphs 5.2-5.4). (n) Management has been strengthened by organisational changes and two senior posts now provide strategic direction in the development of financial policy and the use of information technology (paragraphs 5.5-5.9).

Overall conclusions 4. Despite heavy pressures, the Land Registry has achieved a number and recommendations of important successes since the previous report by the National Audit Office; and overall it has responded positively and effectively to the recommendations made by the Public Accounts Committee.

6. There remain, however, a number of management and organisational problems. These arise essentially from the nature of the Registry’s workload, which is demand led and largely unpredictable. The measures introduced by the Registry since 1987 enabled it to cope with the rapid increase in work when the property market was buoyant; but further flexibilities of approach will be necessary if the Registry is to respond successfully to the downturn in business. While it is important to retain a core of permanent staff, the Registry may, for example, need to employ a higher proportion of short-term and casual staff if it is to adjust quickly to significant peaks and troughs of work. It should continue to examine the scope for streamlining working procedures by more flexible staffing, greater delegation to managers and a reduction in the level of repetitive checking. Such action would also strengthen job satisfaction. And the performance and workload of the less efficient District Registries will need to be kept under regular review.

6. On a wider front, the Registry’s new status as a “Next Steps” Agency provides the opportunity to press ahead with further initiatives. It has already responded to the need to review its work by appointing consultants to examine and to report on its structure and organisation, Changes to the Registry’s financial and funding environment will be necessary if it is to operate more fully along commercial lines and to respond effectively to the needs of the market; and the Registry is a candidate to operate as a Trading Fund. The aim is to enhance the efficiency of its operations and to benefit the public through improved quality of service. In the meantime, the Registry may seek Treasury authority to carry forward operating surpluses from one year to another. This would allow it to manage is finances better and to avoid having to make frequent changes in the level of its fees.

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Part 1: Introduction

1.1 This report examines the progress made by the transactions. Applications for registration are not Land Registry in implementing the generally time sensitive because further dealings on recommendations made by the Public Accounts the title are unlikely in the imminent future. It is Committee in their Thirty-Second Report of Session necessary, however, not only for the internal 1987-88, following the National Audit Office report operational efficieny of the Registry but also for on the operations of the Land Registry published in customers awaiting the return of the new 1987 (Hc 39/1987-88). certificates of title, that the volume held at the Registry is kept to a realistic working minimum.

Work of the Land Registry 1.6 Prior to the Act 1988, the 1.2 The Land Registry occupies a central place in register could, with a few statutory exceptions, only the buying and selling of property. It provides the be inspected by the proprietor or someone acting on essential machinery for all property transactions the owner’s authority. However, from 3 December and guarantees certainty of title, with financial 1990, when the relevant provisions of the 1988 Act indemnity in cases of error. To provide an accurate were brought into effect, the register became open and reliable record of land ownership it keeps a to inspection by anyone on payment of a fee. written record of the title and associated rights, covenants and charges, such as mortgages, and an accurate map of the title’s boundaries. 1.7 Computers are being used increasingly by the Land Registry to speed up its work and to provide a 1.3 The Registry now holds the title details of over better quality service to clients. Systems are being 13 million properties, an increase of three million developed and implemented in-house by specialist since the 1987 National Audit Office report. A title staff based in the Computer Services Division at has to be registered when the property is first sold . The biggest project, to computerise the after its locality has been designated an area of processing and application of title, has already been compulsory registration. All subsequent dealings installed at nine Registries and will be operational must be similarly registered. From December 1990, at all of them by the end of 1993. registration has been compulsory for the whole of England and Wales. [ has separate arrangements). 1.8 The Land Registry employs just over 10,000 staff in 18 District Registries and at Headquarters. 1.4 Registration of title involves the Registry in In 1989-90 it processed just under three million two main kinds of work. First, and of crucial applications for registration and 7.6 million importance, are the series of pm-contract and pre- preliminary service enquiries and associated completion services provided by the Registry that correspondence. allow and credit transactions to be brought to a completion confidently and without delay. These “preliminary services” include the 1.9 The Registry charges for its services and is provision of copy title documents, guaranteed as required to set its fees at a level sufficient to cover evidence of title, and the provision of searches its costs in any year. Any surplus income at the end which both preserve the priority of intended of a financial year is surrendered to the transactions and guarantee the revealed entries on Consolidated Fund. The Registry is financed the register. Preliminary services account for over through a Vote (Class X, Vote 11 in 1990-91) and its 70 per cent of all applications handled by the Land estimates are scrutinised by the Treasury under the Registry. usual public expenditure requirements. Outturn of the 1990-91 Vote is expected to show expenditure 1.5 The second main function of the Land Registry of El83 million, income of El94 million, and a is the registration of new titles and changes in title surplus of El1 million to be surrendered to the details arising from the sale of a property or other Consolidated Fund. Although the Registry became a

4 HM LAND REGISTRY: REVIEW OF PERFORMANCE

“Next Steps” Agency in July 1990, with greater developments in the main areas of the Registry’s managerial freedom, this has not yet affected the work considered by the Public Accounts Committee financial regime within which it is required to in 1988. These include manpower, productivity and operate. standards of service (Part 2); computerisation (Part 3); funding and charging (Part 4); and planning and 1.10 Subsequent parts of this Report deal with management (Part 5).

5 HM LAND REGISTRY: REVIEW OF PERFORMANCE

Part 2: Manpower, productivity and standards of service

2.1 The main factors to emerge from the 1987 tightening targets and reducing turn-round National Audit Office report, the examination and times, measures which would be subject to report by the Public Accounts Committee and the external review by the Treasury. subsequent Treasury Minute were:

(i) Increases in staff numbers had not kept Subsequent developments pace with the rapidly increasing workload. By March 1987 the backlog of cases awaiting Staffing and backlog processing had risen to over 700,000 and 2.2 The workload of the Land Registry continued registration was taking 10 to 24 weeks to to increase substantially up to 1988-89 [an increase complete. The Land Registry had not been able of 52 per cent over three years), but there was a to respond to the problem by increasing nine per cent decrease in 1989-90, reflecting the overtime and casual labour because it was downturn in the UK property market. required to keep within cash and running cost limits. The Registry was recruiting and training new staff to reduce the backlog as quickly as possible. To permit the Registry to 2.3 To enable the Registry to meet the increasing adjust more quickly to changing levels of workload, Treasury agreed to an uplift in the demand, from April 1988 it was exempted manpower resource plans [set in the 1987 Public from the normal controls over departmental Expenditure Survey) for 1988-89 and 1989-90. As a running costs. result, the number of permanent staff in post rose from 8,200 to 10,529 (an increase of 28.4 per cent) and the Registry’s manpower resource (including (ii) Since 1983 productivity had been a casuals and overtime) peaked at 11,637. The continued cause of concern. downturn in market activity which began in This was particularly so in the older District 1989-90 has led the Registry to stop recruitment Registries and in those in the south-east where and the use of overtime. By the end of 1990-91 staff there were special difficulties in recruiting and in post will have reduced to 10,080 from a peak of retaining good quality staff. High priority was 11,461. to continue to be given to increasing productivityby settingdemanding targets, by the introduction of improved working procedures (including computerisation), and by 2.4 The staff increases needed were far in excess a radical programme to transfer work from the of the Registry’s newly acquired delegated authority south-east. to recruit 200 extra staff, and separate Treasury authority had to be obtained. This necessarily extended the period before the new staff were in post. Staffing increases therefore lagged behind (iii] The accumulating backlog of what was needed to deal with the workload, and unprocessed work had affected the turn-round the backlog of outstanding cases rose to a peak of time for processing registrations. 1,192,133 registrations in November 1988. The Despite a massive increase in workload the subsequent slump in the property market led to a Registry maintained its target completion times sharp decrease in business and this, combined with for pre-contract and pre-completion record output and productivity in 1989-90, allowed applications. However, clearance of the Registry to reduce the backlog to 712,231 substantive registrations was taking much too registrations at the end of 1989-90 (Figure 1, long for a service of such importance. Quality opposite), and to an estimated figure of 500,900 at of service was therefore to be improved by the end of 1990-91.

6 HM LAND REGISTRY: REVIEW OF PERFORMANCE

Figure 1 Registrations: input, output and work in hand

Numberof cases (000s) 3,000

Cases in hand 1985/86 ’ 1986/67 ’ 1987188 ’ 1988/89 ’ 1989/90 (000s) Year Source: The Land Registry (figures taken from Annex 1). Notes: The figures are for substantive applications only.

2.5 The Registry countered the impact of the [ii) opening new District Registries in areas downturn in new work by freezing recruitment, where good quality staff are more easily shedding casual workers, reducing overtime recruited and retained; working and, moving work between District (iii) improving work procedures and Registries. organisation, primarily by using smaller, area- based, working teams. 2.6 The Registry’s target is for the level of work in 2.8 The Registry’s productivity has improved each hand to reach an average of five weeks by 1993-94, year from 1985-86 onwards, the improvement representing about 385,000 registrations. If varying between 0.2 per cent and 3.1 per cent (see applications were to continue to be received at the Annex 1). In the four years to 1989-90 it has prevailing low level, then the Registry’s backlog increased by 7.1 per cent, slightly ahead of the would be reduced to the target minimum of five target of a year-on-year increase of 1.5 per cent. The weeks during 1991-92, some two years earlier than Registry aims to increase productivity by a total of 6 planned. However, the Registry’s current projection per cent over the next three years. is for an increase in its workload. (i) Computerisation Productivity 2.9 The computerisation of records and working procedures plays a key part in improving 2.7 The Registry has continued to achieve productivity (see Part 3). Figure 2 shows the increased productivity by setting demanding annual productivity achieved, over the five years to targets for each District Registry. It has raised 1989-90, by the three District Registries which had overall productivity through three initiatives: the new computer system in operation. As (i) computerisation of records and computer expected, during the initial learning phase assisted production of registration documents: productivity fell at each Registry. But this was

7 HM LAND REGISTRY: REVIEW OF PERFORMANCE

Figure 2 Productivity at newly computerised offices

3.5

2 : n .’ $I : a .’ *’ 5 a- .’ EL *’ & a ~(,,..,.,..__...... ;;-;“‘-,~_-- _.._.._--I Y ,.....- . .._._ 6 ,.,.--ii . ,*’ “.__ 3 2.5 --r;------,+---- -____ / ‘i; --._ : -,N In -.- .’ .? --__; 3 5 % 2 1 ~1 I i !z Plymouth 2 Gloucsstsr-- Plymouth- - - Swansea AIDLRS__ z L7 $ I >- 0’ I I L 1985/86 1986/87 1987/88 1988/89 1989/9 Year

Source: Data supplied by the Land Registry (figures taken from Annex 2). Note: The arrows indicate the timings of the office computerisations.

followed in each case by a significant and sustained 2.11 New District Registries have been opened increasein productivity. since1987 at Telford,, Hull, Leicesterand , with a further office at due to [ii) Relocation open this year. Existing offices at , Swansea, Durham and Birkenhead have been 2.10 As part of a major dispersal programme, the expanded. Since January 1988, nearly 1,000 posts Registry is relocating work from the south-east to have been transferred from the south-east. Further overcome the special difficulty of recruiting and transfers are planned from Harrow and Stevenage to retaining staff of suitable quality in that area. Work Birkenhead and York by 1994 (Annex 3 gives has been transferred from the south-eastern offices details). (Croydon, Harrow, Tunbridge Wells, Stevenage. Gloucester and ) to other locations, 2.12 Initially the new District Registries were either by expanding existing District Registries or staffed by the voluntary transfer of a small by creating new ones. Authorised complements at management team, supported thereafter by local Croydon, Harrow, Tunbridge Wells and Stevenage recruitment, strengthened as necessary by normal have been reduced by 1,740 posts and inter-office transfers. Expansion of existing District accommodation released. These offices now provide Registries was achieved by local recruitment. registration services only for their immediate Workload and posts have been relocated without vicinity. any substantial relocation of staff. 2.13 Because the sharpest reductions in Table 1 conveyancing activity were in the south-east, where Productivity achieved at each District Registry in previously the market had been the most active, the 1989-90 Registry has sought to maximise the use of all its staff resources-and to maintain the steady reduction in backlogs -by m-directing work between District Registries. Thus, Croydon and Tunbridge Wells, which were most affected by the . Plymouth 3.269 downturn in business, have been importing work Weymouth 3.192 from other Registries. This has enabled their staff to l Telford 3.180 be kept fully employed. But it has limited the . Hull 3.060 increase in productivity because the transfers Peterborough 3.051 involve extra handling of paper-work and work is Lytham 3.039 being moved from District Registries with high Nottingham 3.022 productivity to those that are less efficient. . Birkenhead 2.941 Stevenage 2.889 2.14 The three new District Registries that came l Coventry 2.674 into operation in 1988-89 (Telford, Coventry and . Gloucester 2.651 Hull) have all achieved productivity figures better s Swansea 2.642 than the overall Registry average (Annex 2). But productivity in the District Registries located in the Average all DLRs 2.813 south-east (Croydon, Harrow and Tunbridge Wells) is still significantly below the average and they had Durham 2.611 the lowest productivity measured in 1989-90 (Table Tunbridge Wells 2.363 1). But as the size of these Registries has been Harrow 2.224 reduced, their impact on the Registry’s overall Croydon 1.646 performance is much less than it was. Source: The Land Registry (data taken from Annex 2.15 The Registry is to keep its relocation policy 21. under review as the position changes, for example, if there is the expected revival in conveyancing activity in the south-east.

(iii) Working Procedures and Organisation 2.16 One significant change since the 1987 National Audit Office report has been the been particularly successful. Plans are in hand to introduction of small team working at a number of extend this programme and similar approaches to District Registries. Staff are organised in smaller other levels in the District Registry management teams each of which deals with a specific structure. The Registry is also preparing a revised geographical area, rather than the District Registry personnel policy manual. This is to contain being a single production line for the whole region practical checklists and guidance and will generally served. encourage local management to adopt an innovative approach and to work out its own solutions to local 2.17 The impact on productivity of improved problems. working procedures and organisation has not been directly measured, but the managers of individual 2.19 The Land Registry has also introduced a District Registries who have introduced smaller number of methods-including partial checks, team working, told the National Audit Office that selective scan and single handling-to limit they believe that this has contributed to the overall checking procedures to those essential areas of increase in productivity achieved and to improved complexity or risk. It recognises that with further quality of service. development of these procedures, and increasing computerisation, there will be other opportunities 2.18 Improved staff and management training to reevaluate the level of checking and to keep it arrangements have also helped to improve working commensurate with the risks involved. But the procedures. The “Introduction to Management Registry is providing a state guarantee to title to Programme”, which is aimed primarily at improving what is likely to be the most valuable and the management skills of Executive Officers, has important asset of members of the public; and it has 9 HM LAND REGISTRY: REVIEW OF PERFORMANCE

therefore continued to emphasise in its training the registration is finalised or preliminary services importance of providing a reliable and prompt completed. service which is “right first time”. 2.23 The Registry also maintains a record of any work which is returned by customers because it 2.20 The Registry also continues to give high contains errors. The reported errors are relatively priority to improving staff management. As well as few-about two per cent for registration work and developing management skills training it is only 0.05 per cent for preliminary services-and encouraging local management to introduce more are mainly of a clerical nature. The Registry streamlined and flexible staffing. There is scope to believes that these errors are representative. develop further this partnership between Although there is no evidence to show whether management and staff, and provide benefits all customers are reporting all the errors, the Registry round, by less frequent and repetitive checking, considers that validation of these results by a more team working and greater job enrichment. statistical sample of all completed work would not be cost effective. It is, however, considering ways in which its quality control procedures might be 2.21 The Registry also promotes the exchange of improved. good practices and ideas between District Registries and Headquarters management. And it is 2.24 As noted in paragraphs 2.4 to 2.6, the Land encouraging managers at District Registries to take Registry has also improved its service to customers appropriate initiatives to improve working practices by speeding up the turn-round times for handling and thereby improve levels of service and value for work. The number of unprocessed applications for money. registration has been steadily reduced over the last two years, from 1,192,133 in November 1988 to an estimated 500,900 in March 1991 (ie reducing a 20 Standards of Service week backlog to just under eight weeks). 2.22 The legal nature of registration, and the Preliminary services are more time-sensitive reliance placed upon it by the public when buying because the information provided is essential for and selling property, puts a premium on high the completion of a purchase or sale. Here the standards of reliability. The Land Registry has Registry has set itself a target of processing responded to this need by building quality control applications within four working days. It has procedures into its systems that should enable any achieved this for 97 per cent of applications: and 75 errors to be identified and corrected before per cent are now processed within one day.

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Part 3: Computerisation

3.1 The main factors to emerge from the National have been an expensive option, and the Registry Audit Office report, the examination and report by took advantage of recent improvements in the Public Accounts Committee and the subsequent telecommunications facilities to re-allocate the Treasury Minute were: computing power away from the District Registries and to concentrate it at Plymouth. Thus, each (i) The project to computerise the registration District Registry will be linked directly to a suite of of title-and thereby improve productivity three computers located at various sites in and standard of service-is complex and Plymouth, thereby increasing the ability of the technically advanced. system to cope with equipment failures. The Registry does not expect this change to affect the Before 1985 progress in developing the system original cost and implementation targets. It has was initially very slow, but in 1987, following emphasised that as now designed the project will the successful outcome of trials at its Ply~uuulh uffi~~, Lhe Treasury aulhurised Lhe provide the computing, storage. access and operational systems for over 22 million titles in Land Registry to implement the system in full England and Wales and, importantly, provide a high throughout the regional network. The Registry level of data and computer security. planned that by the end of 1989 nine of the sixteen District Registries would have 3.3 The Registry planned to have four District introduced major aspects of the computerised Registries on the full computer system and a system. The Land Registry looked to exploit to further five District Registries running a partial the full the operational benefits of version by the end of 1989. This it achieved. It also computerisation as quickly as possible. met its target of having all its District Registries either on a full or a simplified version of the (ii) The delays in implementing the system computerised system by the end of 1990. The increased the cost of the project and the risk Registry is also currently on course to achieve its that it might not achieve its financial targets long-term target of having all the District Registries on time. on the full version of the system by the end of 1993. The Land Registry was confident, however, that by exercising tight project management the project would start repaying its costs and Costs and savings achieve the Treasury’s target five per cent rate 3.4 The Land Registry has estimated that by the of return by 1997. end of October 1990 it had incurred some +X4 million on the project against the full estimated cost (iii) The Land Registry believed that further of ?Z30million. The Land Registry has continued to substantial benefits could be achieved, for enhance and develop the scope of the project so example, by computerising title records and that the potential of its hardware, software and ihe property register. More generally it telecommunication investments can be fully recognised the need to take full and prompt exploited. The original investment appraisal advantage of the opportunities offered by envisaged implementation at 16 offices and was information technology. based on a particular forecast workload. The system had subseuently to be expanded to encompass new Subsequent developments offices, the higher throughput of work and new services introduced by the Registry. Installation Implementation throughout the Registry’s 19 offices is on target for 3.2 The Registry’s decision to press on with 1993. computerisation followed the successful trials of the software in the Plymouth pilot system. However, 3.6 These changes mean that it is not possible to evaluation of that system’s hardware capabilities compare outturn on the project with the original showed a bigger machine would be needed at the estimate. On current projections total expenditure District Registries if it was to handle the increased at constant prices for the expanded project will workload created by the property boom. This would amount to E43 million.

11 3.6 The Registry, rather than monitoring savings databases. In December last year the Registry achieved against those forecast in the original introduced automatic searching at its computerised investment appraisal, measures actual results offices. Under this procedure results for up to 70 directly from the regular management accounting per cent of all search applications are printed returns from individual District Registries. The automatically at the time of receipt for immediate Land Registry believes that given its fast-moving issue. Its present plans are to replicate, on a trial and changing workload, and the major re- basis in 1991 at selected District Registries, the structuring of the configuration of the new sucessful telephone searching service already computerised system, any read-across to the established in its Land Charges department. A productivity levels forecast in the original further project, already launched, will provide investment appraisal is of less value than regular automatic office copying of computerised registers analysis of actual results. As described in paragraph from 1992. Concurrently with these 2.9, results show that computerisation has had a implementations the Registry continues to examine significant effect on productivity. Additionally, the potential for direct access. computerisation has allowed the Registry to improve the level of service it provides. Turn-round Other uses of Information Technology times have improved and the Registry is developing new services, such as telephone requests for official 3.9 Amongst other systems, the Registry has been searches. developing two other production systems in its efforts to make more use of information technology. 3.7 The original investment appraisal showed One system is to create a property description productivity increasing each year for the first seven database that will enable title records to be found years as more titles were converted onto the simply from the property’s address. The other is to computerised register. National Audit Office provide computerised maps. analysis of the data shows that for Plymouth, which has been operating the system the longest, the 3.10 For operational and resource reasons both planned levels scheduled for achievement after systems were initially developed independently seven years have nearly been achieved after four from the main computer system, although the Land years. Of the other Registries who have the full Registry recognised that the three systems must be system, only three have been operating it for longer compatible. In 1990 it decided to make the property than one year. All these Registries have shown description database available directly from the productivity improvements, and the Registry has main computer system. The feasibility of the confirmed that it has every expectation that all will computer mapping project has recently been achieve the targets contained in the original established and the project has progressed into a investment appraisal. full-scale pilot system to be linked to the main system. Further development

3.8 Because the extra productivity achieved from 3.11 In order to provide, at Management Board the new system increases as more titles are level, greater direction and control of its computer computerised, the Registry has initiated a scheme to projects and strategies, and to reflect the scale, convert 9.55 million titles (about three-quarters of scope and potential of computing, the Registry the current total) by the end of March 1994. The sought and secured from the Treasury approval to a Land Registry has long recognised that apart from full-time post as Director of Information the potential to improve internal productivity the Technology. The development and management of computerisation of the land register provides the all IT projects and systems are now under a single long-term potential for direct access into its co-ordinated command.

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Part 4: Funding and charging

4.1 The main factors to emerge from the National the legislative changes to the process it would like Audit Office report, the examination and report by to see incorporated i&o the proposed Land the Public Accounts Committee and the subsequent Registration Bill. To speed up the process, it Treasury Minute were: proposed to dispense with the Rule Committee, which has a statutory function under the Land (i) Large operating surpluses had been Registration Act 1925 to advise the surrendered to the Consolidated Fund which in his duty of approving fee levels. had resulted in the Land Registry’s customers being significantly overcharged for the services The Lord Chancellor’s Department is currently provided. 4.3 considering the Registry’s proposals, but it seems These surpluses had arisen because of a unlikely that the proposed Bill will be enacted in massive increase in conveyancing activity and the foreseeable future. In the absence of this an unforeseeable rise in house prices, which legislation, the Land Registry will not be able to increased the Registry’s fee receipts. The make the changes it believes to be necessary. funding arrangements under which the Registry was required to operate had also 4.4 The Land Registry, with the assistance of the meant that it could neither use the surplus Rule Committee, has been successful, however, in receipts to take on extra staff nor carry the reducing the time taken to introduce new fee revenue forward to future years so that fees orders. By improving the quality of the case could be reduced. The Land Registry was presented to the Rule Committee, through more discussing new funding arrangements with the timely and better quality management accounting Treasury that would allow it to account for its information, the process has been reduced from 12 activities taking one year with the next. It also months to three or four months. undertook to introduce a more flexible system which would enable fee charges to be adjusted Fee levels more promptly. 4.5 The Land Registry has sought to match its (ii) Within the fee structure there were three income to its costs by reducing fees in 1985, 1986 different forms of cross-subsidisation. and 1988. Under the annuality provisions of Straightforward registrations were subsidising Government Accounting, fees paid for applications complicated registrations; higher value lodged in one year cannot be carried over the year transactions were subsidising lesser value end. This means that all expenditure needed to transactions; and substantive transactions on clear any accumulated arrears of work and to registered titles were subsidising preliminary process new work must be covered by in-year services. The Land Registry considered that it receipts. Following significant and successive would be impracticable to move away from the annual increases in workload, expenditure ad valorem basis of fee charging, which was a authorisations followed rather than kept pace with long established and accepted approach. A flat- the level required to cover the increasing rate fee would be inequitable; and to charge commitments. As a consequence fee income actual costs would require exceptionally exceeded expenditure and the surplus fee receipts complex and costly administrative generated were surrendered to the Consolidated arrangements. The Land Registry undertook, Fund even though the applications generating the however, to review the basis of its fees and income were carried over for completion in the charges having regard to the need to minimise following year. Thus, in the three years to 1989-90 conveyancing costs and maintain cost-effective a E65 million surplus was generated. registration services. 4.6 When the market turned, and fee income Subsequent developments reduced, the Registry was obliged to contemplate increasing fee scales in order to generate sufficient Setting fees in-year funds to meet its new commitments and to 4.2 The Land Registry wrote to the Lord reduce the accumulated arrears of work-despite Chancellor’s Department in early 1990, outlining the surplus receipts surrendered at the end of the

13 immediately preceding year. It has also generated requires that fees must be set having regard to the extra income by re-introducing charges for value of the estate as determined by the purchase preliminary services-as recommended in the 1987 money [see below). National Audit Office report. It expects to receive an additional S million income in 1990-91 by these Ad v&rem fees means. It has also reduced costs by cutting recruitment and overtime (see paragraph 2.3). 4.11 The Registry has sought to remove the legal requirement to base its fees on purchase money as 4.7 The Registry continues to hold to the view this will provide it with extra freedom to respond to expressed in its Memorandum submitted to the future changes in the housing market. But it Committee of Public Accounts on 1 February 1988, believes that the advantages of ad valorem fees that “machinery should be established which more than outweigh the disadvantages. The scales would ensure that it can direct all registration are simple and cost-effective to administer, the fees receipts into registration services”. In particular it are known in advance to the customer, and ad proposed that “any surplus receipts that do accrue valorem rates are accepted practice in other areas of should be held by the Registry over the year end so the property world. The Registry also pointed out that such monies can be directed in the following that the fees reflect the worth of its guarantee of the year either to finance resources to process accuracy and authenticity of the title and the accumulated applications or, importantly, to reduce indemnity supporting it. And so long as house fees. This would facilitate financial and medium- prices maintain a constant relationship to wage term planning and reflect the sensible concept of levels, the Registry’s increasing wage costs are met taking one year with the next”. by the increased fee receipts generated by house price inflation. Thus, few revisions to fee orders are 4.8 The prospect of Trading Fund status, for which required. the Registry’s candidacy is approved in principle, provides the scope to overcome these serious 4.12 The main argument against ad v&rem rates funding difficulties. One of the Registry’s objectives, is that the fee charged does not necessarily relate to as stated in Government’s Expenditure plans for the work incurred. Higher value transactions incur 1991-92 to 1993-94 (Cm 1510, published in a higher fee; and one customer pays more than February 1991), is to examine, with the Lord another simply because of differences in house Chancellor’s Department, the Treasury and the prices. Thus, some element of cross subsidisation is National Audit Office, the potential for achieving inherent with ad v&rem fees. But the Registry this within the survey period. have pointed out that any schema based on standard scales will almost certainly contain some Cross subsidisation degree of cross subsidisation. 4.9 The Registry has reduced some of the cross Funding subsidisations noted in the 1987 National Audit Office report. The amalgamation of its two main 4.13 The main development since the National fees scales in 1988 addressed the anomaly that its Audit Office report has been the granting to the fees for registered land were higher than those for Land Registry of exemption from Treasury control unregisteredland, eventhough registered land overits total spending,From 1 April 1988its takes three times less resource to process. Also, as expenditure has been monitored and controlled on recommende& in the National Audit Office report, the basis of unit costs. The Registry is able to the Registry has re-introduced charges for all increase its staff numbers, in-year, by 200 posts preliminary service applications except for official (approximately two per cant] without specific searches of the register. These time-sensitive approval from the Treasury, provided it covers the applications are made between contract and additional expenditure from its income. If the completion and their costs are recovered through market generates a level of business higher than the fee paid for subsequent registration. that margin. the Registry has to seek Treasury approval and a supplementary estimate to draw 4.10 The other type of cross subsidisation noted in further on its income. But the change to Agency the National Audit Office report-that some high- status in July 1990, which gave the Registry greater value transactions subsidies lower value managerial freedom, has not so far affected the ones-results from the fact that the Registry’s fees financial and funding regime within which it is are ad valorem. The Land Registration Act 1925, required to operate.

14 HM LAND REGISTRY: REVIEW OF PERFORMANCE

Part 5: Planning and management

5.1 A main recommendation to emerge from the 1987 National Audit Office report. The National Audit Office and Public Accounts responsibilities of the Chief Land Registrar and Committee Reports and subsequent Treasury Chief Executive have been merged into a single Minute was that planning and management needed post. And the Registry has strengthened its senior to be strengthened to enable the Land Registry to management by the creation of a new key Grade 5 respond more effectively to increasing demands and post in Finance and by making another Grade 5 to provide the standard and speed of service that responsible full-time for the development of the public had a right to expect. Information Technology. These changes are intended to allow the Registry to respond Subsequent developments effectively to the challenge of Agency status and the prospective move to a trading fund regime (see Planning paragraph 5.8 below). 5.2 The main instruments of the Registry’s forward planning are a Corporate Plan that looks Re-appraisal of role and operation forward three years and an annual Business Plan. These are both produced in accordance with the 5.6 The Land Registry charges and collects each framework document issued when the Land year some Z200 million in fees. Of the 13 million Registry became a “Next Steps” Agency in July registered titles, about one in five will have some 1990. The framework document establishes the activity on it each year. Because of the scale and Registry’s status, its statutory functions, and its nature of its work, and because it is in a monopoly aims and objectives (see relevant extracts at Annex position, it is important that the Registry should be 4). fully accountable for its operation and performance.

5.3 The principal aims of the Registry, as stated in 5.7 The controls exercised war the Registry need, the framework document, and as supported in the however, to have regard to its ability to function Government’s spending plans are: efficiently and effectively. They must also allow the to maintain and develop a unified and Registry to respond to sudden and dramatic changes reliable system of land registration in its workload, which is entirely demand-led. throughout England and Wales which These requirements have been recognised by the offers users a speedy, inexpensive and Treasury, both in its relaxation of the controls over secure service; costs and manpower and in its agreement to Agency status for the Registry under the “Next Steps” to achieve progressively improving initiative. performance targets set by the Lord Chancellor, so that high quality services 5.8 Further changes will be necessary, however, if are delivered promptly and at lower cost to the Registry is to operate fully along commercial LlSC!KS. lines. The framework document for the Registry identifies it as a candidate to operate as a Trading 5.4 For the first of these, the Land Registry has Fund, which would give it more freedom of action agreed specific performance targets with the Lord to respond to the needs of the market, to enhance Chancellor and the Treasury for the three years the efficiency of its operation and to benefit the 1991-92 to 1993-94 (extracts at Annex 5). These public through improved quality of service. will enable the Registry’s main achievements to be Detailed proposals are to be brought forward for judged. For its internal management purposes the consideration by Ministers during the Registry’s Registry will continue to analyse its performance at first year of operation as an Agency. a more detailed functional level for each District Registry. 5.9 In the meantime the Land Registry is considering what further improvements could be Management made. As indicated in this Report, much has 5.5 The management of the Land Registry has already been achieved and the Registry’s forward been strengthened in a number of areas since the plans give priority to the continued development of

15 HM LAND REGISTRY: REVIEW OF PERFORMANCE its personnel practices and working methods and make frequent changes in the level of its fees. The the use of information technology. And if the Registry is responding to these challenges and Registry were allowed to carry forward surpluses opportunities and has appointed consultants to from one year to another this would allow it to examine and to report on its structure, organisation manage its finances better and avoid having to and commercial accounting developments.

16 HM LAND REGISTRY: REVIEW OF PERFORMANCE

Annex 1

Workload and Productivity Data

Cases processed and year-end Cases in Hand

1985-86 2,162,356 2.049.691 4,684,999 416,674 10/l 1986-87 2,586,578 2,259,011 5,942,613 744,241 16/4 64.7 1987-88 2,805,390 2,554,077 6,743,674 995,554 19/4 17.0 1988-89 3,213,366 3,138,907 7,436,893 1,070,013 17/o (14.1) 1989-90 2,948,553 3,306,335 7,609,799 712,231 10/4 (36.5)

1985-86 4,893,067 4,655,357 7,589 7,067 2.625 - 1986-87 5,916,339 5204,542 8,147 7,632 2.674 1.9 1987-88 6,527,071 5,792,314 8,984 8,515 2.678 0.2 1988-89 7,420,986 7,052,708 10,867 10,297 2.729 1.9 1989-90 6,912,239 7,872,549 11,647 11,018 2.813 3.1

Source: All data supplied by the Land Registry Notes: 1. The cases in hand (weeks) figure is expressed in weeks/days. It is obtained by dividing the cases in hand (numbers) figure by the cases output figure. The % change figure is the change on this cases in hand (weeks] figure. 2. This figure is the daily average resources total including headquarters and Land Charges department staff. 3. This figure is the resources available to District Registries. 4. This figure is the average units of work completed by each post each day.

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Annex 2

Productivity data

Croydon 2.267 2.446 2.520 2.301 1.846 HarrfXV 2.269 2.240 2.247 2.190 2.224 Tunbridge Wells 2.437 2.420 2.462 2.403 2.363 Lytham 2.573 2.688 2.688 2.971 3.039 Nottingham 2.932 2.981 2.924 2.975 3.022 Gloucester 2.640 2.502 2.520 2.438 2.851 Stevenage 2.869 2.958 2.975 2.946 2.889 Durham 2.483 2.639 2.772 2.874 2.611 Plymouth 2.484 2.281 2.772 2.763 3.269 Swansea 2.514 2.761 2.807 2.537 2.842 Birkenhead 2.613 2.682 2.781 2.785 2.941 Weymouth 3.024 3.103 3.131 3.192 3.192 Peterborough 3.085 3.257 2.890 2.905 3.051 Telford - - 2.777 3.180 Coventry - - 2.943 2.874 Hull - - - 2.880 3.060 Office average 2.625 2.674 2.678 2.729 2.813

Note: all figures are in units of work per post per day.

18 Annex 3

Transfers of work from Registries serving the south-east

1987-88 Harrow Swansea Hillingdon Hounslow 160 stevenage Peterborough ES%?X 360 Peterborough Nottingham Leicestershire 170 27.6%

1988-89 Croydon Telford Greenwich Lambeth Lewisham 290 Southwark Wandsworth Peterborough Hull Lincolnshire Norfolk 220 Suffolk Gloucester Coventry West Midlands 400 25.6%

1989-90 Croydon Telford Kingston Upon Thames Richmond Upon Thames 150 Merton Harrow Swansea Ealing 80 Tunbridge Wells Durham Surrey 290 Stevenage Buckinghamshire 180 19.0%

1990-91 Tunbridge Wells Portsmouth East Sussex 230 17.2%

1991-94 Harrow Birkenhead Hammersmith/Fulham 90 (Planned Kensington/Chelsea IIIOVS) Harrow Birkenhead Harrow 110 Brent stevenage York Hackney 390 Tower Hamlets-’ 14.8%

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Annex 4

Extracts from the Registry’s framework document

1. STATUS AND FUNCTIONS

Executive Agency 1.1 This document describes the framework within which HM Land Registry operates following its establishment as an on 2 July 1990. The Registry has the formal title ‘Her Majesty’s Land Registry’ but in everyday use, as in this document, the terms ‘Land Registry’ and ‘Registry’ are used.

Ministerial Responsibility 1.2 The Lord Chancellor has ministerial responsibility for the Land Registry.

Departmental Status 1.3 The Land Registry continues to be a separate department with its own Accounting Officer.

Chief Executive 1.4 The Land Registration Acts give responsibility for the conduct of the business of land registration to a statutory officer appointed by the Lord Chancellor designated the Chief Land Registrar who is the Registry’s Head of Department and Accounting Officer. The Chief Land Registrar is the Registry’s Chief Executive.

Statutory Authority

1.5 The Land Registry was initially established under the Land Registry Act 1662. The principal legislative provisions under which the Registry currently operates are listed at Annex A. The most important of these is the Land Registration Act 1925.

Statutory Functions 1.6 The main functions of the Registry are to keep and maintain a register of title to freehold and leasehold land in England and Wales and to deliver land registration services to the general public.

1.7 In addition to the registration of title the Registry also has responsibility for the registration of certain third party rights under the Land Charges Act 1972 and the Agricultural Credits Act 1928.

2. AIMS AND OBJECTIVES

2.1 The principal aims of the Registry are: . to maintain and develop a unified and reliable system of land registration throughout England and Wales which offers users a speedy, inexpensive and secure service;

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HM LAND REGISTRY: REVIEW OF PERFORMANCE

l to achieve progressively improving performance targets set by the Lord Chancellor, so that high quality services are delivered promptly and at lower cost to users.

2.2 In pursuit of these aims, the Registry’s objectives are to:-

. enhance the value of the Land Registry to the community by promoting appropriate legislative proposals and initiating new methods and practices which will improve and extend the services provided: . ensure that the services provided by the Registry meet the developing needs of the conveyancing community and the wider public and in particular to develop the opportunities afforded by the opening of the register to public inspection from December 1990; . having regard to the benefits of completing the register’s coverage of all land in England and Wales, develop plans to encourage the registration of previously unregistered land independently of its sale; . achieve a continuing reduction in the real value of fees charged to the public by progressively reducing unit costs: . ensure that the fees charged by the Registry reflect the appropriate costs of the service it provides and the expenditure required to meet its principal aims; . ensure that appropriate steps are taken in the deployment of all rescmrces to improve progressively the longer term efficiency and effectiveness of the Registry; . make best use of information technology and in particular to extend the Computerised Application Processing System to all offices by the end of 1993; . develop and sustain personnel and other management policies which provide the necessary staff resources of the right quality and which give staff the opportunity to use their abilities to the full and to derive satisfaction from the contribution they make.

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// HM LAND REGISTRY: REVIEW OF PERFORMANCE

Annex 5

Extracts from current performance targets

Productivity Reduction in unit costs 6% or better increase over the 3 years Increase in output per post 6% or better increase over the 3 years

Quality of service Pre-completion work 91% 91.5% 92% completed within 4 days Average time for 7 weeks 6 weeks 5 weeks substantive applications

Accuracy Error free rate for 99.5% 99.6% 99.7% pre-completion work Error free rate for 97.25% 97.5% 97.75% substantive applications

Title Register Registered titles (million) 14.14 14.98 15.70 Of which, computerised 3.95 6.75 9.55

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