After years of stealth tax, Murphy’s department says it cannot pay the money back

Finance Minister Conor Murphy’s department has said that it cannot repay to the public almost £40 million – a sum which is rising each day – which individuals were charged in exorbitant fees described by auditors as a “stealth tax”.

By Sam McBride
Wednesday, 17th June 2020, 10:54 am
When asked if he would slash the exorbitant fees which are a ‘stealth tax’ Finance Minister Conor Murphy did not respond
When asked if he would slash the exorbitant fees which are a ‘stealth tax’ Finance Minister Conor Murphy did not respond

The situation relates to a hugely expensive contract which means that for years the public have been paying over the odds while the department and a huge company each make millions.

Yesterday Comptroller and Auditor General Kieran Donnelly published the result of an investigation into the LandWeb project, a 1999 contract for BT to digitise important documents such as Land Registry maps.

Mr Donnelly found two major problems with how the project has been handled by civil servants.

The contract itself was over-generous. Yet even after the Audit Office and the Assembly’s public accounts committee savaged it a decade ago, civil servants extended the contract twice – in 2014 and 2019 – and are planning to extend yet again, despite not securing sufficient concessions from BT, Mr Donnelly said.

Secondly, the fees – a portion of which goes to BT, but the remainder of which goes to the department – have for years been set at too high a level.

Mr Donnelly said that meant that the public has been paying a “stealth tax” when they used the LandWeb system – a particularly hidden levy because often such fees would be paid to solicitors or other professionals involved in a property sale or other transaction, masking the fact that it is a de facto tax.

Mr Donnelly said that almost £40 million has been over-paid by the public because the department has set rates too high.

The department said that it had been unable to change the fees for three years from 2017 because of the collapse of devolution.

However, despite the apparently straightforward nature of cutting fees which even the department does not appear to be defending as reasonable, it has not done so in the six months since devolution was restored. It yesterday told the Press Association that it is “urgently” working on cutting the fees by next year.

Mr Donnelly, who played an important role in bringing the RHI scandal to public attention, said he was “alarmed” at what had happened and said he could see “no evidence to clearly demonstrate that the project has delivered value for money”.

BT, which he acknowledged had provided a good service, was initially expected to make £46 million from the deal but is now on course to make more than £100 million.

The News Letter asked the Department of Finance if it would repay to members of the public the £39 million which it has overcharged them.

The department said: “As the NI Audit Office report acknowledges, the department was unable to introduce a new Fees Order to reduce fees due to the absence of the Assembly.

“The fees collected by the Land Registry over the past three years were lawfully levied under the legislation in force at the time.

“There is no statutory provision under which the department could return any portion of the fees levied in the past.”

When Finance Minister Conor Murphy - who is now responsible for resolving the problem, even though he did not create it - was asked if he would commit to cutting the current exorbitant fees, his department said it was “urgently preparing a revised Fee Order to be in place by 2021. There is a statutory process to be followed and we will work to complete this as quickly as possible”.

*** An earlier version of this story said that Mr Murphy had not responded to questions. In fact, his department had responded by email but for technical reasons their response did not reach the News Letter until this morning.

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