Delay to new fees for controversial LandWeb service

Reduced fees on a Government service which has already overcharged users by almost £53m will not be introduced until at least 2023.

he LandWeb service provides online access to land registry documents, which are a key component of the property sector in Northern Ireland.

The LandWeb service was set up in 1999 as a Public Private Initiative (PFI) to “improve efficiency and customer service” for those using the register. British Telecom (BT) secured the £46m contract to run the service on behalf of the Department of Finance.

Under the terms of the PFI deal, BT paid for the design and operation of the service but recovered their costs by receiving a set transaction fee from users.

However, following an investigation prompted by an anonymous member of the public who claimed the LandWeb project was wasting public money, the Northern Ireland Audit Office (NIAO) last year said it believes the fees to use the service were “too high” and users were being overcharged.

The NIAO recommended new reduced fees be introduced “urgently”.

In response to the release of the NIAO investigation report in June 2020, Finance Minister Conor Murphy said plans were in place for the introduction of revised fees for the service in April of this year.

Mr Murphy said earlier plans to revise the fees were delayed by the collapse of the Northern Ireland Assembly from 2017 until 2020.

He said last year that work had restarted on preparing a new Fees Order with the aim of it “being operative from April 2021”.

However, the Sunday Independent has learned the proposed new fees will not be introduced until April 2023 “at the earliest”, according to a source close to the situation. 

In a statement, a Department of Finance spokesperson confirmed the introduction of the new fees had been delayed.

“In preparing a new Fees Order, the Land Registry needs to forecast its future income and expenditure. The income is always difficult to forecast because it is affected by both levels of activity in the property market and property prices,” they said.

“The Covid pandemic has made this even more difficult, so the Department commissioned the Ulster University Economic Policy Centre (UUEPC) to analyse the likely impact of the pandemic on the property market to inform our decisions on setting fees. The UUEPC recommended delaying a decision until market trends stabilised.”

The spokesperson continued: “The Land Registry Rules Committee, which is chaired by a High Court judge and includes independent representatives from the Law Society and the Bar Council, oversees revisions to the Fees Order.

“The end of the stamp duty holiday and the furlough scheme, Brexit and the economic and social changes brought about by Covid, and the bearing these might have on the property market, led the committee to unanimously agree that the Fees Order should be placed on hold pending a stabilisation of the economy.

“Based on the independent expert advice from the UUEPC and the recommendation of the Rules Committee, the Department decided to defer making a decision on a new Fees Order.”

New figures released by the Department of Finance show a total surplus of just over £53m has been accumulated from the LandWeb service since the 2006/07 financial year.

In one year alone, 2018/19, there was a surplus of £12.5m.

The Department of Finance spokesperson said any surplus from the service was “surrendered” to the Northern Ireland Executive to be reallocated to other public services in that year.

While the initial contract term for the LandWeb contract with BT was 17 years, from 1999 to 2016, it has been extended several times and has been extended once again to cover the period from 2021 to 2026.

In his 2020 report, Comptroller and Auditor General Kieran Donnelly stressed that a “fully functional and consistent IT service” had been provided by BT throughout the LandWeb project.

However, he said he was “alarmed” that mechanisms were not put in place to secure better value for money for the public purse.

“Measures such as benchmarking, market testing and open book accounting should have been part of the Department’s/LPS’s agreement with BT, to ensure greater transparency and competitiveness,” Mr Donnelly’s report stated.

In relation to the extension of the contract until 2026, the Department of Finance spokesperson said they were unable to provide the estimated cost of the contract extension.

“The contract pays BT a fee for each transaction that is processed through the LandWeb system,” they said.

“The value of the contract therefore depends on the number of transactions that are processed, which in turns depends on the level of activity in the property market.

“Since we do not know what that will be, it is not possible to predict how much will be paid to BT through the extension period.

“However, a reduction of 35pc in the cost of each transaction has been negotiated compared to the original pricing for the LandWeb contract.”

The Sunday Independent contacted BT last week, but the company did not make any comment on the matter.

Speaking last year following the release of the NIAO report, a BT spokesperson said the LandWeb contract was awarded to the company after a “open and competitive” procurement process, adding: “BT accepted all commercial risks and costs, with no guarantee of income, recovering its investment from a fixed proportion of the transaction charged from LPS customers.”  

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