Customer Service and Operations

Memorandum of Understanding

Following a recommendation by our Quinquennial Reviewer, the then Lord Chancellor agreed with the Chief Secretary to the Treasury that a Memorandum of Understanding should take effect from 1 April 2003. We believe that this Memorandum of Understanding will enable Land Registry to function even more effectively whilst satisfying our financial obligations to the Department for Constitutional Affairs and HM Treasury.

As is current practice, Treasury will continue to receive our annual business plans once the Secretary of State for Constitutional Affairs and Lord Chancellor has approved them. In line with the guidance underlying Spending Review 2002, we will have the flexibility to:
a) re-invest inadvertent surpluses in future years or
b) carry over to a future year the sum equivalent to the previous year's dividend payable
(whichever of (a) or (b) is the greater) for the purposes of development of Land Registry's services and capital investment.

Should Land Registry forecast a loss in any year, the Department for Constitutional Affairs will be required, in the first instance, to ascertain whether the estimated loss can be contained within its own Departmental Expenditure Limit. If not, a call on the Reserve will be considered. The level of cash balance remaining after the equity withdrawal will cover working capital, the Indemnity Fund, additional funding for indemnities, vectorisation of the Index Map and the Dividend payable for 2003-04. In accepting the above terms of the Memorandum of Understanding, we have agreed to make an equity withdrawal of £114.188 million upon request from Treasury.