Government plans to convert most of the Land Registry into a ‘service delivery company’ could undermine the integrity of the register – and with it the UK’s reputation as a safe venue for investment, the Law Society has said.

The Society was responding to a consultation by the Department for Business, Innovation and Skills on the future of the 150-year-old registry. The consultation, which closed yesterday, proposes transferring most of the registry’s operations to a company with possible private shareholding. 

In its response, the Society says it is crucial that the integrity of the register is maintained.

It says the government’s proposals, which would split the registry into an Office of the Chief Land Registrar and a service delivery company, risk creating increased layers of operation, making the process more complex and increasing costs. 

Jonathan Smithers (pictured), deputy vice-president and chair of the Conveyancing and Land Law Committee, said: ‘Our members are one of Land Registry’s main customer groups and solicitors are broadly satisfied with the service they currently receive.’

Stressing that the Society does not have a political leaning towards any particular business model, he said registry is part of the UK’s critical national infrastructure and we are concerned that the proposals for ‘could undermine the register’s integrity and introduce conflicts of interest with potentially adverse economic results’.

The response raises concerns about the ability of the new Office of the Chief Land Registrar to regulate and manage a service delivery company effectively, and that profitable non-registration services could become the most important part of the business to shareholders of a privatised entity, particularly if there are no statutory control on prices, resulting in resources being diverted away from core registration services.

It calls on the government to be more specific about the benefits for the public of its proposals, particularly in view of the inherent risks. Noting that the rationale for the splitting of functions has not been supplied, it says the government considers that the registry would benefit from a separation of policy and delivery but does not explain why. 'Such separation could lead to overlap of functions, confusion, excess administration and cost, particularly in the short term'.

If the government goes ahead with the split, the Society says the service company should be 100% owned by the government. 

Opposition to the reorganisation appears widespread among users of the register. James Sherwood-Rogers, chairman of the Council of Property Search Organisations (CoPSO), said:  'The fact that the Law Society, one of the Land Registry's main customers, has slammed this latest privatisation consultation raises serious concerns that the proposals will undermine the integrity of the service. Industry professionals across the board believe the government is acting irresponsibly and not in the best interest of the industry.'