A regulatory scandal

My wife is from Eastern Europe, Slovakia to be exact. This, a country where in the old days the outcome of your driving test was governed not so much by whether you ‘mirror, signal, manoeuvre’ but rather if you can remember your pin number when you stop at the ATM on route. You see, driving licences there are dished out on a somewhat ‘pay to play’ basis.

If you wanted planning permission it was simple. There were no pesky local authority hoops to jump through, no committee meetings nor speeches to bored councillors. No, you just slipped the Chairman of the Housing Department an envelope full of highly inflationary currency – and Igor’s your uncle. This is why Eastern Europe’s beautiful medieval cities and their cobbled streets and gothic churches are blighted by Peckham style tower blocks scattered across the landscape. Building Control? You’re having a laugh.

This corrupt and dangerous culture where a bribe and a blind-eye are the predominant fulcrum from which everything regulatory pivots, was a consequence of a lack of transparency, scant accountability and a regime whereby those in power did what they wanted – and profited from it. See also Columbia, Mexico, Ghana, Myanmar, Guatemala… places that top the list of the world’s most corrupt countries and where Derek Trotter, speaking of Peckham, would be heralded as the most honest of men, comparatively.

The Transparency International organisation defines corruption as ‘the misuse of public power for private benefit’ and I mention this just as an interesting aside and without any intended reference to the rest of this piece, of course. There’s no connection whatsoever between tin-pot countries with ‘creative’ finances and the two leading regulators of the UK property industry. None at all.

I recently wrote a column for this publication that called-out NAEA Propertymark as an organisation that plays fast and loose with members’ money – trousering £5m in cash reserves and now paying a cart-load to two top executives to run the place rather than one but with little if any real justification for doing so except for it being a case of jobs for the boys. Not corrupt as such, but certainly greedy and self-serving.

Yet lo and behold there is seemingly another entity in our sector that is also being probed over its finances and where murmurings of fraud and corruption are front and centre of recent revelations.

Swagger in from stage left, the RICS – the Royal Institution of Chartered Surveyors.

According to the Sunday Times as the publication that has undertaken a protracted investigation into the goings on there, the alarm was raised whereby there was concern amongst stakeholders that all was not well with the professional body’s finances as a consequence of an independent audit by accountants BDO that had apparently flagged concerns over treasury management and susceptibility to ‘unidentified’ fraud and misappropriation. Kind of awkward for an organisation that has as its website description ‘…delivers confidence through respected global standards…’ and bangs on about ‘transparency’ and tackling ‘conflicts of interest’ and cites its ‘commitments to honesty and integrity’ as cornerstones of its very existence.

So, alarm duly raised, four RICS non-executive directors ask to see said BDO report, as is their right and as is part of their oversight role. But permission is refused by the RICS hierarchy and which doesn’t stink at all, does it? I mean, a so-called harbinger of transparency hiding a report that condemns its handling of its books so that no-one is able to scrutinise or debate whether a problem exists as a global leader in accountancy has said it does? No, all sounds 100% legit here, right?

This, an organisation that reaps £93m in revenue each year, mostly from members’ subs and which, curiously, lost nearly £5m last year and saw revenue reserves swing £9m the wrong way. That’s a lot of red ink. This is also an entity that spends £13m each year, 14% of its income, on promoting ‘influence and brand profile’. That’s a big PR budget, take it from me.

Hey, perhaps the ‘Royal’ label actually inspires delusions of entitlement and infallibility in the RICS hierarchy just as it does among members of the monarchy everywhere. After all, it insists on headquartering in Parliament Square and on having an in-house Michelin starred chef making its execs lunch each day and so it definitely has a suitably high opinion of itself – and a very expensive one.

My question to you, its loyal subjects, therefore is ‘Is this ok?’ Is it ok that the RICS are losing millions of pounds a year, are subject to potential misappropriation of funds but insist upon keeping damning audits under wraps whilst firing the whistle-blowers that are attempting to shine a light on scrutiny and accountability? And at the same time as holding themselves up as setting and upholding the highest standards of credibility, honesty and transparency; all whilst scoffing foie gras amidst the most opulent of surroundings?

Instead, the property industry will surely be forgiven for believing that these so-called watchdogs, the NAEA and RICS both, that are supposed to exist to give confidence and trust to public and sector alike, are rapidly forging Sir Philip Green like reputations.

Why, given their cash-guzzling history they may even have similar sized yachts to the pint-sized pension snaffling irritant.

I crave the introduction of proper oversight and regulation of estate agency. Barriers to entry, regular knowledge tests, accountability to public, a regime with teeth. RoPA cannot come quick enough in order to raise and maintain standards and improve professionalism and, ultimately, our industry’s reputation.

But future policing needs new blood and cannot be left to the current bloated, ineffective, discredited and opaque cabals that have for too long been allowed to look after themselves before their members and public. RICS members in particular surely cannot stand by any longer as enablers – complicit in ensuring that our profession’s reputation is dragged firmly down to that of a disgraced Arcadian tax avoiding leech. And corrupt, Bratislava driving examiners.