Compulsory purchase powers

The Bill makes a number of changes to the compulsory purchase regime, but will these have the government’s desired effect of increasing efficiency, certainty and flexibility? And does the Bill focus on those parts of the regime most in need of reform?

Removal of right to an inquiry

Currently objections to a compulsory purchase order (CPO) can be considered by way of a public inquiry, hearing or written representations.  Hearings are uncommon and all objectors must consent to using the written representations procedure.   As such, most objections are currently dealt with at inquiry.  

In an attempt to improve efficiency, the Bill proposes that the relevant Secretary of State (as the confirming authority) will be able to decide whether to hold an inquiry, or as part of the representations procedure, use written representations or a hearing.  Secondary legislation will provide further details.

Objectors can still request a hearing, but will the removal of their right to be heard at an inquiry risk objectors bringing legal challenges based on human rights arguments? This risk seems  exacerbated as the relevant Secretary of State doesn’t have to consider the full impact of the CPO on objectors when deciding which procedure to follow.  And will the time saved by dispensing with the need for an inquiry, be worth this risk of a challenge?

Conditional confirmation

Currently, a Secretary of State can only confirm or reject, in whole or part, a CPO.  But it is proposed that they will be able to confirm a CPO subject to the discharge of conditions by a certain date – similar to the development consent order regime.  The CPO will become operative when the acquiring authority publishes a fulfilment notice confirming that all conditions have been discharged.  Secondary legislation will provide the detail but objectors must be allowed the opportunity to submit representations for any discharge application.  And the scope of any conditions that may be imposed will surely be defined.  

This seems like a positive change and the government hopes that frontloading CPOs in the development process will provide greater certainty that a scheme will come forward and within a shorter timescale.  But many questions remain.  Will important tasks such as obtaining funding, which could easily become a default condition, and appointing a delivery partner be deferred?  This could result in underprepared CPOs coming forward earlier than they should and longer periods of uncertainty for those affected by the CPO.  It will also give objectors a second chance to voice their objections during the condition discharge stage – a fair opportunity but could it lead to a laboriously drawn out process?  And what will these conditions look like?  Will guidance, or even model conditions, be provided?

Extending time limits

The Bill introduces two extensions of time:

1. The period for implementing a CPO will no longer be fixed at three years – a Secretary of State will have discretion to specify a longer period where appropriate.  The implementation period runs from the date that the CPO becomes operative, which, for conditional confirmations, will be the date that the fulfilment notice is published.  This additional flexibility will be especially useful for developers bringing forward large and complex regeneration schemes in phases.  However, this could extend the period of uncertainty for landowners, who already have to wait up to three years to find out whether their land will be acquired.
2. An acquiring authority must give a landowner at least three months' prior notice of the date on which ownership of the relevant land will pass to the authority and, once set, this date can’t be changed.  However, the Bill will allow this date to be postponed by agreement in writing between the parties.  This will be especially helpful if there is a change in circumstances, for example, if a displaced owner’s relocation to another property is delayed. 

Electronic accessibility

In addition to the availability of hard copies, acquiring authorities will be required to publish online notices of the making and confirming of a CPO, and copies of the CPO and map (but not other statutory documents).  Some acquiring authorities already do this, but this requirement will help increase awareness of, and engagement in, the CPO process.

Further CPO reform

The open market value (in a non-CPO scheme world) of the land to be compulsorily acquired forms the basis of any compensation claim, and this includes any value attributed to obtaining prospective planning permission for development of the land were the CPO to be cancelled –  the “hope value”.  A certificate of alternative appropriate development (CAAD) can be obtained from the local planning authority, identifying the development (if any) it can be assumed planning permission would be granted for.  The government has indicated that, during the passage of the Bill through Parliament, it will reform the statutory mechanism governing this process, so that “valuation of land in this context will be more akin to a normal market transaction”.  It isn’t yet clear what this will entail.  Could CAADs be determined in the first instance by the Planning Inspectorate instead of the local planning authorities? Will the burden of identifying all possible appropriate alternative developments in a CAAD shift from the local planning authority to an applicant? We will have to wait to find out.

Finally, the government has said that, alongside the Bill, it will explore “a review of compulsory purchase law with the Law Commission”.  After years of piecemeal evolution and repeated promises of major reform, a comprehensive update would be welcome, and is likely to aid public understanding and transparency. For example, across the industry we misleadingly refer to the “compensation code”, but the relevant law is spread over numerous Acts and case law.  This means that not only is the code far from codified, but is often inaccessible to those most affected by a CPO scheme – the public.  Hopefully this review means that the CPO regime will finally be given the full attention that it deserves, resulting in a more cohesive regime. 

The best of the rest

In amongst the many topics we’ve covered in this series there are several other themes that are noteworthy.

Digital planning

After its inclusion in the Planning White Paper, it’s good news that the digitalisation of the planning system is included in the Bill.  The planning system can still feel operationally cumbersome at times, and given the huge quantities of information involved, much of which needs to be accessible to the public, a shift to the digital world seems imperative.

Secondary legislation may contain powers requiring planning data to be provided in a particular form in line with approved data standards and publicly available.  Planning applications and associated documents may also be required to be provided by electronic means.  It is worth noting that separate regulations will be made for compulsory purchase data.

We will be stuck with the current system for a while, as the Bill isn’t likely to receive Royal Assent before 2024 and, once in place, the regulations governing digitalisation will still need to be made.  However, in the longer term, these changes should make it much easier to share and access information, and accelerate the decision-making process.

Climate change

Perhaps not surprisingly, another key theme which permeates the Bill is climate change. References to the importance of climate change are prolific, with it being a requirement to be addressed in neighbourhood plans and the Mayor of London’s spatial development strategy, and included within the type of infrastructure to be funded by the new Infrastructure Levy.  It is clear that the government wants climate change to be in the minds of plan makers and decision makers at all stages of the system. However, details about what this means in practice are missing, and there remains a risk that this transpires to be window dressing, without delivering meaningful change. 

A noteworthy gap

One area where it feels like an opportunity has been missed is the government’s failure to address the implications stemming from the case of Hillside Parks Limited v Snowdonia National Park Authority.  Legal debate remains around the implications this could pose for those wishing to implement overlapping planning permissions, but it is clear that at least some commentators believe there is a risk of rendering incompatible developments unlawful due to the requirement to complete a development once started.   Although the case is to be heard by the Supreme Court, given the uncertainty that the current Court of Appeal judgment brings to the development and investment sectors, one would have hoped that the government would have taken the opportunity to provide clarity on this in the Bill, as it has done with the issues raised by the Finney v Welsh Minister case.  

So now we wait…

After years of talk of planning reform, it is great to finally see significant planning legislation tracking through Parliament.  As seen in all five instalments of our review, the Bill has the potential to bring about positive improvements to the regime. However, as always, the devil is in the detail, and for the most part this simply has not yet appeared.  There is still much work to be done, both in the Parliamentary scrutiny of the Bill and subsequent legislation, before we are able to see whether what is delivered lives up to the hype.

Whatever happens, though, we will be monitoring the position as it evolves, and will continue to keep you updated on all the key details, once they emerge.

Authored by Caroline Stares.