HC Deb 01 February 1988 vol 126 cc827-34

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lennox-Boyd.]

11.30 pm
Mr. John Heddle (Mid-Staffordshire)

I am most grateful to you, Mr. Deputy Speaker, and to my hon. Friend the Parliamentary Under-Secretary of State for attending the House at this late hour to debate a matter of great concern to the constituents of all right hon. and hon. Members. I am delighted to see my hon. Friends the Members for Fulham (Mr. Carrington) and for Walthamstow (Mr. Summerson) here tonight. Given that the subject of tonight's debate is the reduction in the delay of local authorities in replying to solicitors' local searches, I shall endeavour to be economical with my words to ensure that this Adjournment debate does not last beyond midnight.

It is the declared wish and intention of the Government, and I wholeheartedly support them, to extend home ownership as widely as possible across the social spectrum in all four corners of the United Kingdom. It is, therefore, the Government's responsibility to ensure that the path to home ownership is not strewn with pitfalls or potholes, with bureaucratic undergrowth or unnecessary expense and, most particularly, that, by precept and example, we eliminate that awful practice of gazumping.

The House will recall that, in February of last year, I introduced, under the ten-minute Bill procedure, the Law of Property (Amendment) Bill, the object of which was to eliminate gazumping as far as practically and politically possible, by reducing the time between the acceptance of an offer by a vendor and the signing of a contract by the purchaser.

I was delighted to read in the Conservative party manifesto the following words: Some people are still deterred by the costs and complications of house purchase. That is why we must look for new ways to make house buying simpler and easier. Our abolition of the conveyancing monopoly has already made it cheaper. Since being returned to Parliament by my constituents in Mid-Staffordshire at the general election last year, I have endeavoured to seek practical and political ways of making the process of house-buying easier, simpler and cheaper. The House may recall that, in November, I introduced in a similar Adjournment debate the subject of Land Registry delays. My hon. and learned Friend the Solicitor-General replied in a most positive vein, allowing the Land Registry to retain the £27 million surplus that it made to enable it to increase its staff and to eat into the backlog of cases that all hon. Members will recall that their constituents have to suffer.

Tonight's Adjournment debate directs the attention of the House to a much more fundamental and more sinister source of delay, frustration and expense, which our constituents have to suffer.

It is an established part of the conveyancing process that before anybody is committed to buying a property he or she, or his or her solicitor, should make searches and inquiries of the local authority. The replies that the local authority gives can reveal important facts about the property. The inquiries are part of the process of making sure that the bargain will be as the buyer understood it to be when he or she made the offer in the first place. Prospective mortgagees similarly rely upon searches and inquiries so as to be sure that nothing threatens the value of their security.

At the outset I must draw a clear distinction between two types of information sought from local authorities by solicitors acting for purchasers. Conveyancers usually apply for both together, but technically they are quite separate. First, there are the local land charges registered by local authorities under a statutory duty imposed by the Local Land Charges Act 1975. Everyone has a statutory right to search for information recorded on this register.

Secondly, there are additional inquiries on standard forms to which the authorities have agreed to supply answers. The agreement to reply is voluntary; there is no statutory duty to do so. In some cases, however, the inquiries relate to information that the authority is obliged to make available to the public, and this is a convenient way to make it available.

For some years — and increasingly in the last few years and most certainly in the last few months—it has been impossible in some areas to obtain information in reply to the inquiries within a reasonable time. I regard a reasonable time—I believe that I am supported in this by both the Law Society and the conveyancing standing committee of the Law Commission—as something of the order of 10 to 14 days. That target response time contrasts with some times that have been reported recently in the Law Society's Gazette.

Some London boroughs — these are the only ones that are recorded, but I am sure that the London boroughs to which I shall refer in a moment are not alone in being guilty of this delay and, dare I say, inefficiency and possibly negligence—have recorded periods of up to 20 weeks to reply to simple preliminary inquiries by solicitors. By contrast, correspondence in the same Law Society's Gazette has cited examples of very prompt replies.

The London borough of Lewisham, the constituency of my hon. Friend the Minister for Sport, which is a Labour-controlled borough, takes six weeks to reply. The London borough of Lambeth, Labour-controlled, takes 10 to 12 weeks to reply. The conveyancing standing committee of the Law Commission suggests that a reasonable time is 10 to 14 days. The London borough of Camden, a Labour-controlled borough, takes 12 weeks to reply. The London borough of Hackney, Labour-controlled, takes 20 weeks —five months—to reply.

I put it to the House and to my hon. Friend the Minister that to take that long to reply to simple inquiries discriminates against the nurse, the teacher, the first-time buyer—the people who want to stand on their own two feet and rid themselves of the shackles and the interminable delays that would otherwise await them on the council housing waiting list.

I submit that this is the unacceptable face of municipal socialism and that these Labour-controlled London boroughs, and Labour-controlled boroughs elsewhere, are the worst culprits. Local councils that do not deliver a service on time must accept measures that give the public the right to the same quality of service everywhere.

A firm of solicitors in Hackney, reading in the national press recently of the imminence of tonight's Adjournment debate, wrote to me on 14 January and said: I send a copy of a search recently received from the London borough of Hackney. You will see that the search was submitted on the 29 June 1987 and was finally received on 12 January 1988. It will not surprise my hon. Friend the Minister that the London borough of Hackney is one of the two boroughs reported to the local ombudsman for that sort of delay. Perhaps I may tell the House what the local ombudsman, Professor Miller Yardley, said about one particular case — that of a Miss Fern, who was frustrated in her attempt to buy a house in Hackney by the council's inefficiency. He said: Such delay is quite unreasonable and amounts to maladministration. I am also satisfied from this investigation that Miss Fern suffered injustice as a result of the Council's failure to deal with their administrative deficiencies over a long period of time … The public are charged by the Council for searches and they are entitled to receive a reasonable service for such charges. This they have patently not received in Hackney. He concludes: Nevertheless the Council's maladministration caused her to suffer from the additional time her purchase took, as well as to incur trouble and expense, and the Council should recognise this by making an appropriate payment to her. I would also hope the Council will quickly make some firm decisions on how to provide an efficient system for dealing with searches, and then take prompt steps to deal with the accumulated backlog. In the time I have left, I want to suggest to my hon. Friend the Minister some practical ways of improving the service. Before doing so, it is only right and proper that I should place on record the fact that this debate is highlighting the activities of a minority—how large l do not know—of councils. Overall, most local authorities, especially those in the shire counties, give a good service, and their efforts go largely unnoticed. However, the local authorities that offer a poor service account for areas of high volume and high-price conveyancing transactions; they also cater for buoyant markets in which gazumping can flourish—so drastic measures must be taken.

Without wishing to anticipate my hon. Friend's reply, I imagine that he will tell the House that his Department has engaged in the work of the interdepartmental group by publishing a booklet simplifying house buying. I do not wish to dwell on that, nor on the consultation paper recently produced by the Law Commission entitled "Local authority enquiries: how can we eliminate delays?". I know that the discussion period for that document expires on 31 March, and I eagerly await my hon. Friend's Department's response to it.

I am sure that the conclusions that the Department reaches will be constructive and forward-thinking. However, although I am sure that there are ways of speeding up the process by privatisation and computerisation, by putting out the function of replying to local searches to the private sector, or by compelling local authorities to be more responsive by means of the Local Government Bill, I believe—I raised this point with my right hon. Friend the Secretary of State for the Environment at Question Time just under a fortnight ago — that there are two practical measures that my hon. Friend could discuss with his ministerial colleagues in the next few days.

First, when I tried to find out, by parliamentary questions, the nationwide performance of local authorities, I was told by my hon. Friend the Member Oxford, West (Mr. Patten) a year ago when he was the Minister for Housing, Urban Affairs and Construction, and more recently by my hon. Friend the Member for Bristol, West (Mr. Waldegrave), the present Minister for Housing and Planning, that the information is not kept centrally. But the Department of the Environment is responsible for the behaviour of local authorities nationwide, and that infonnation should be centrally available to hon. Members, just as information on each authority's rent arrears and void houses is available to us all.

Secondly, and more importantly, when a local authority falls down on its obligations and responsibilities to the public by not responding within a reasonable period of time—I suggest 14 days—legislative powers should be taken to allow members of the public or their professional advisers to carry out personal searches.

Local authorities will tell my hon. Friend that of course they have no objection to the public carrying out personal searches. However, I can tell my hon. Friend that most of the local authorities in my firing line in this debate, and certainly all those that I have mentioned, do not allow solicitors, licensed conveyancers or members of the public to make personal searches. The only way to outlaw this despicable, insidious practice of discouraging people from wanting to buy their own house simply, quickly and cheaply, and the only way to rid local authorities of inefficiency and maladministration, is to do as I suggest. I await with great pleasure and anticipation my hon. Friend's response.

11.46 pm
The Parliamentary Under-Secretary of State for the Environment (Mr. Colin Moynihan)

Having listened carefully to the speech of my hon. Friend the Member for Mid-Staffordshire (Mr. Heddle), I can see how wise his constituents were to return him to the House last June. Such eloquence and such thoughtful argument in so concise a time does credit to my hon. Friend and to the House. I congratulate my hon. Friend on raising a matter that is of widespread concern. He is particularly well qualified to speak on this subject, as he has been involved in the property and housing world for many years, first as a surveyor and currently as a vice president of the Building Societies Association.

My hon. Friend has been hard working and persuasive in pursuing the interests of the house-buying public. This is by no means the first evening on which he has stayed late to press his strongly held views on this subject. I note that he raised the issue of delays in the Land Registry during an Adjournment debate on 30 November last year. I know that he is following with interest the progress being made on computerising local authority searches. I shall of course be responding to the constructive suggestions that my hon. Friend has made, but I should first like to spell out the nature of the problem as we see it.

In the first part of his speech, my hon. Friend alluded to the fact that the search inquiry is a two-part process. It is important to make a distinction between the two parts. First, there is the statutory search of the local land charges register to establish whether the property is subject to any charges. Under the Local Land Charges Act 1975, everyone has the right to obtain information from this register. The statutory search is quite straightforward because it simply involves checking against the index. This part of the process can be done quickly and we have no reason to think that it contributes to delays in responding to inquiries.

The other part of the process is to make general inquiries of the local authority about matters such as planning consents, local structure plans, road building proposals and a wide range of other matters that may affect the value and use of the land. These are generally known as supplementary inquiries. They are not part of the statutory search, but they are invariably carried out as part of the same process, and it is in responding to these inquiries that delays occur. They are much more labour intensive than the statutory search and often require contributions from several different departments within the local authority.

The supplementary inquiries have not always been linked to the statutory search. Until the eve of the second world war, conveyancers were expected to ask for supplementary information separately. At that time, the inquiries were made after contracts were exchanged, rather than before. This was a rather ad hoc system and it became more and more unwieldy as inquiries became more frequent and more diverse.

In 1939, the local authorities and the Law Society decided that it would be more sensible to prepare a list of the main questions which needed answers with a recommended fee for answering the questions. The list of questions has grown over the years, so that the standard forms produced by the Law Society and local authorities now contain 18 questions for use in every case and 13 more questions that can be used when appropriate. They cover a wide range of topics, from drainage to planning to clean air legislation. As the range of inquiries has grown, so has the number of local authority departments that may be involved in supplying the information. Not surprisingly, that has affected the speed with which inquiries are processed. In 1939, the Law Society and local authorities laid down a maximum of seven days for a reply to inquiries. In a paper published last December, the Law Commission's conveyancing standing committee recognised that times have changed. The committee suggested that, nowadays, the satisfactory maximum period for answering routine inquiries would be 10 working days.

We would all agree that, if we were simply talking about an increase from seven days to 10 days, there would be no need for this debate. However, my hon. Friend has demonstrated that the scale of the problem is much more severe than that. He quoted examples of delays. We could all tell similar stories. The question is what evidence there is to show how widespread the problem is. Let me quote the evidence that we have. I shall start by quoting my own. My hon. Friend was kind enough to refer to my constituency. I regret that he had to do so in the light that he did. He is right. Many of my constituents have made representations to me in Lewisham. The delays there–45 days in many cases—are unacceptable.

The local authority associations gave evidence about delays to the Government's conveyancing committee, which published a report in January 1985. The figures that it gave to the committee were interesting. They show that out of 361 authorities who responded, over half replied to search inquiries within 10 days, on average. On the other hand, 61 authorities took more than 15 days to reply. But the figures hide the fact that, in some cases, delays are considerably longer than 15 days. The Holborn Law Society, in evidence to the committee, recorded response times from six London boroughs during the second half of 1982 as rising to five, seven, eight and nine weeks, and in one case to three months. We do not need to go back to 1982 for that sort of evidence. The Law Society Gazette regularly carries a table of delays in London. In 1987, it recorded periods of up to 20 weeks.

I am glad that my hon. Friend recognised that most authorities are providing a reasonable service to the house buyer. We must not lose sight of that fact when we consider the problem. But it is also clear that there is a genuine and serious problem in some areas. For those whose attempt to buy a house has been unnecessarily prolonged or thwarted altogether, it is no consolation to know that there are other areas, often not far away, where the same process would have taken place much more quickly.

When considering the reasons for delays, we accept that it is clear that the amount of work involved in dealing with supplementary inquiries has increased since the present system was introduced in 1939. The number of local authority departments involved has grown. Moreover, the level of activity in the house market has increased in recent years, especially in London and the south-east. All those factors have contributed to slowing down the process. Furthermore, there are undoubtedly cases in which the conveyancer is at fault—by not describing the property accurately; by addressing inquiries to the wrong local authority; by supplying incorrect information; or by not sending in enough money to pay the fee. Local authorities attribute delay to factors such as peaks in demand, staff sickness or vacancies.

None of this alters the fact that some authorities perform much better than others. The difference in performance cannot be attributed entirely to the different circumstances or work loads of particular authorities. My hon. Friend will agree that it is hard to avoid the conclusion that long delays are due to inefficiency or bad organisation or arise because the authority gives low priority to dealing with inquiries.

I suggested at the start of my comments that delays are caused by supplementary inquiries rather than by the time taken to make a statutory search. Local authorities are not under a statutory duty to respond to supplementary inquiries, and they have come to a voluntary agreement with the Law Society about the standard list of questions. Since responding to inquiries is not part of a local authority's statutory responsibilities, there is no formal action that my right hon. Friend the Secretary of State can take. However, that does not mean that the Government have been indifferent to the problems that house buyers face. As my hon. Friend knows, we have already taken action to make the house buying process easier, quicker and cheaper. We have ended solicitors' monopoly on conveyancing, and the Law Society has relaxed the rules that prevented solicitors from advertising, which has stimulated competition.

My noble and learned Friend Lord Hailsham, who was then the Lord Chancellor, set up a committee on conveyancing in February 1984. That committee, under the chairmanship of Professor Julian Farrand, to whom I pay tribute for his invaluable service on the subject, produced a report in January 1985 on conveyancing simplifications. The report described delays in local authority search inquiries as the most contentious aspect of the operation of local authority registers". Following that report, my noble and learned Friend asked the Law Commission to establish a conveyancing standing committee, with a continuing remit to seek and promote ways of improving the conveyancing system. That committee has produced a very timely consultation paper on the subject, called "Local authority enquiries: how can we eliminate delays?" The committee is asking for comments on its paper by 31 March. The Government will be looking closely at the outcome of that exercise.

My hon. Friend has made some suggestions about the ways in which the search process could be speeded up. I have considerable sympathy with his ideas, but I do not want to hide the fact that we want to see the responses to the standing committee's paper and the committee's views before we decide whether Government action would be desirable and, if it would, what form it should take.

My hon. Friend suggested that we should consider privatising the service. My right hon. Friend the Secretary of State promised 10 days ago that we would consider that suggestion and that it might even be a candidate for the list of "defined activities" that local authorities must expose to competition under part I of the Local Government Bill. The Bill is currently being scrutinised in another place.

As my hon. Friend knows, we are moving forward on a broad front in that Bill. There is provision in it for my right hon. Friend to add to the list of activities subsequently by order. Our attitude has been that we would prefer not to have to force local authorities in this way. We are doing so only because they are not prepared to go ahead on their own initiative. Therefore, if there is a reasonable prospect that authorities will make use of the private sector to carry out an activity more efficiently and effectively, without the need for legislation, we would welcome it.

In the case of search inquiries, there is a complication. The nature of the activity is to collect information from various departments of the authority. Therefore, it involves a small time input from a large number of staff scattered through various departments. That makes it difficult to disentangle as a function. The delays, by and large, seem to occur not in the land charges department of the authority, but in the other departments. Unless the tenderers took over a wide range of local authority activities, the reduction in delays would probably not be significant.

For those reasons, we do not put local authority searches at the top of our list of activities to be brought within the regime laid down in part I of the Local Government Bill. However, there is a prospect of privatisation in the process and it has to do with computers. The idea of computerising the system has found widespread favour in recent years. I share the view that it has a lot to offer. There are two main reasons why it has not happened as quickly as it might.

First, there have been proposals for a nationally coordinated move towards computerisation. But quite a number of authorities have perfectly good manual systems and are able to reply to search inquiries in reasonable time. They have seen no need to computerise. That feeling has been reinforced by the fact that computerisation involves an initial capital outlay. Many authorities have not been prepared to make the outlay because they place a higher priority on other competing demands. However, the cost to the local authority need not he an obstacle. In many areas, I feel sure that house buyers would be willing to pay a little more if that would give them a quick and reliable service. The cost of developing and installing a computer system could be borne by a private company and recouped by that company over a period of time. This has provided enough incentive for at least two companies, which, I understand, are at an advanced stage in developing computer systems to offer to local authorities. The advantage of that approach is that the private company could make the capital outlay and provide the staff to computerise the system. The costs could then be recouped through the search fee, so that they fell not on the local authority but instead on those who benefit from an improvement in the service.

My hon. Friend also proposed that there should be sanctions against local authorities who continue to respond slowly to search inquiries. The Government have not closed their mind to that idea, but it would be important to ensure that sanctions were effective. I doubt, for instance, whether it would do much for the cause if the sanction was merely to deprive the local authority of its search fee. We would hesitate before going down that sanctions road.

The main reason for hesitating is that we would then have to legislate to give a statutory basis to the supplementary inquiries. As I have already said, they are currently drawn up by agreement between the Law Society and the local authorities. We would have to decide which inquiries should be statutory; we would have to allow in some way for the minority of inquiries, which genuinely require a longer response time; and we would lose some of the flexibility of the present system. There are difficulties, but we retain an open mind and we look forward to the conveyancing standing committee's conclusions on this option.

The debate has been a timely contribution to the discussion launched by the conveyancing standing committee's paper in December. Delays of many weeks in processing search inquiries are a serious disservice to the public and I hope that the authorities concerned will start taking steps now to put things right. I repeat my exhortation to authorities to look seriously at computerisation. There are ways in which they can improve their service to the public.

In conclusion, I say to my hon. Friend that we shall look carefully at what the standing committee concludes and bear in mind his representations not only of tonight but in the other forums in which he has taken the opportunity to drive home the important points that he summarised. They will be taken into account.

I think that there is a prospect of making progress in this regard. I hope that the Government's policy of encouraging local authorities to improve their performance will start to yield results. If it does not, we may have to think again.

I hope that my hon. Friend will accept my apologies for speaking so rapidly in response to the comments that he made. However, he made so many important points that I wanted to ensure that as many as possible were covered.

Question put and agreed to.

Adjourned accordingly at one minute to Twelve midnight.