Introduction

The tail-end of the Housing and Planning Bill is dedicated to proposed reforms of the compulsory purchase (CPO) regime and picks up on many of the issues highlighted in the consultation documents issued by the government in the spring and the recent Government response to the consultation. Set out below is a clause by clause analysis of the proposals in the Bill.

Right to enter and survey land

Clause 111 introduces a general power for acquiring authorities to enter and survey land when they are contemplating pursuing a CPO. This addresses a clear anomaly in the current system as there is no reason for different authorities having different survey powers.

Clause 112 provides for a warrant to authorise the use of force where entry for survey purposes is prevented (or likely to be prevented). A minimum of 14 days’ notice must  be given and information on the availability of compensation if damage is done must be given to the owner/occupier.

When it comes to the power to survey land, this is circumscribed in the case of statutory undertakers. Where a survey is to be carried out on land held by a statutory undertaker and the undertaker objects because the survey would seriously interfere with the carrying on of its undertaking, Ministerial authority will be required before the acquiring authority can enter the land.

Clause 116 introduces offences in connection with powers to enter land. These can be committed by persons obstructing the acquiring authority in the exercise of the powers without reasonable excuse and also the person exercising the power of entry if they obtain and disclose confidential information other than for the purposes for which the person was exercising the power.

Clause 117 deals specifically with the right to enter and survey Crown land. It provides that  clauses 111 – 116 will apply in relation to Crown land if the authorised person has the permission of the appropriate authority.

Confirmation and Time Limits

Clause 118 requires the Secretary of State to publish a timetable setting out the steps to be taken by confirming authorities and provide an annual report to Parliament identifying which confirming authorities have complied with any applicable timetable. This will have the benefit of ensuring greater certainty for acquiring authorities and scheme promoters when it comes to scheme delivery. A concern remains however that the quality of decision making may suffer if there is an over-emphasis on speed. Poor decisions are (quite rightly) susceptible to challenge in the High Court so this measure may not always result in a quicker outcome for scheme promoters.  

Clause 119 provides for inspectors to be appointed to act in place of the confirming authority (more often than not the relevant Minister). This is a controversial provision as the exercise of CPO powers is a particularly draconian measure and accordingly the delegation of powers to inspectors should be used sparingly. In its response to consultation the Government has recognised the sensitivity around this proposal and will consider further the criteria for delegation.  

Clause 120 seeks to clarify the time limits for the implementation of  CPOs. It provides that notices to treat and general vesting declarations (GVDs) cannot be served more than 3 years following the confirmation of  a CPO. This is a helpful clarification of the existing position.

Vesting Declarations - Procedure

Clause 121 introduces Schedule 7 of the Bill which changes the notice requirements for GVDs. In essence, the preliminary notice of intention to vest is dispensed with. Instead, a prescribed statement about the effect of Parts 2 and 3 of the Compulsory Purchase (Vesting Declarations) Act 1981 must be included in the confirmation notice. This must also include an invitation to those that are eligible to claim compensation to provide their details to the acquiring authority. It is very common practice for authorities to publish the notice of intention at the same time as the notice of confirmation anyway so in practice this does not represent much of a change.

Clause 122 extends the current minimum time period between the notice period and vesting from 28 days to 3 months. However, the overall combination of time limits in the draft legislation means that the process is not significantly expedited. Currently,  with a 2 month preliminary notice and 28 day vesting period, an acquiring authority wishing to vest at the earliest possible time has  to wait approximately  3 months before being able to get on site. The proposals are now to incorporate the preliminary notice provisions into the notice of confirmation. Whilst there is no longer a minimum 2 month lead in period before making a GVD, the overall process is still approximately  3 months because of the extended vesting period. That all assumes that the acquiring authority wishes to proceed with a GVD promptly following confirmation, in which case the time periods are essentially equivalent. An acquiring authority is otherwise prevented from acting swiftly by the extended 3 month vesting date if it wants to make a GVD later in the process. This is compounded by the extension to entry periods under the notice to treat process – (see below). The practical effect of this change is that developers and authorities may need to plan their programmes further in advance

Possession  Following Notice to Treat etc.

Clause 123 extends the minimum notice period after an acquiring authority may take possession under the notice to treat/notice of entry procedure from 14 days to 3 months. It also provides that a notice of entry ceases to have effect if, before entering on and taking possession of the land, the acquiring authority become aware of an owner, lessee or occupier to whom they have not given a notice to treat. If the acquiring authority serve a notice to treat on the recently discovered owner, lessee or occupier, the acquiring authority may serve a new notice of entry on all the owners, lessees and occupiers of the land. The Bill envisages a shorter notice period for these new or changed interests (a minimum of 14 days) with the exception of occupiers. The new 3 month time period is unlikely to prove popular with acquiring authorities as it reduces flexibility. It may have been more palatable had a temporary possession power been introduced as are often provided for in development consent orders and hybrid bills. The practical effect of this amendment is significant as it could severely impede the ability of scheme promoters to get onto land quickly following confirmation of a CPO.

Clause 124 enables a person in possession of land to serve a counter-notice requiring the acquiring authority to take possession of land by no later than a date specified. This   date must be not less than 28 days after the day on which the counter-notice is served and must not be before the end of the period specified on the notice of entry – or any extended period that the person has agreed with the acquiring authority. Whilst this may help a claimant who has a particular need for entry and the valuation date to be on a particular day, there does not appear to be any specific sanction in the event that the acquiring authority is in default.

Clause 125 makes it clear that an acquiring authority may agree to extend the period specified in the notice of entry.

Clause 126 provides that the changes set out in clauses 123-125 apply to the New Towns Act 1981.

Clause 127 introduces Schedule 8 to the Bill which abolishes an alternative (and now moribund) procedure for taking possession of land under section 11(2) of, and Schedule 3 to, the Compulsory Purchase Act 1965.

Clause 128 extends the minimum notice period for taking possession from 14 days to 3 months. This is essentially a consequential amendment to bring the entry period in line with the extended 3 month notice of entry process

Compensation

Clause 129 provides a power to the Secretary of State to make regulations to impose further requirements concerning the notice claimants must give the acquiring authority detailing the compensation sought by them.

Clause 130 clarifies what information must be included in a request for advance payment. Within 28 days of receiving a request, the acquiring authority are able to request further information from the claimant in order to estimate the amount of compensation. The clause also empowers the Secretary of State to make regulations to govern the form and content of the claimant’s request for an advance payment. Given the potential sanctions referred to below for late payment of advance payments, the ability to require information to assess the request is essential

Clause 131 provides that an acquiring authority are able to  make an advance payment at any time after a request has been submitted and the compulsory acquisition has been authorised. An acquiring authority is obliged to make an advance payment if the authority have given notice to treat in respect of the land to which the request relates, or made a GVD in respect of that land. The advance payment must be made within two months of a number of alternative trigger points. This is another provision that is unlikely to prove popular with acquiring authorities. The period for making a payment has been reduced from 3 to 2 months, and there is no requirement for entry to have been taken before an advanced payment must be made. The provisions therefore require payments to be made, regardless of whether or not the liability to pay compensation has arisen. This could have significant cash flow and budget implications for promoters of schemes. There also appears to  be scope for disputes over whether and when the claimant has furnished sufficient information to assess the claim. This has a particular importance given the interest sanction for late payment.

Clause 132 requires an acquiring authority to pay interest if it fails to make an advance payment when it is due. The Treasury is to make regulations to specify the rate of interest that will be payable. It will be interesting to see how high and ‘punitive’ these rates are.

Clause 133 provides for repayment of any advance compensation where the acquiring authority does not end up taking possession of the land. In practice, it can be difficult to enforce repayment, and there is the risk that the acquiring authority can end up out of pocket. For notices to treat  it will be essential that advanced payments are registered as land charges. This does not however help an acquiring authority recover money when the land was acquired pursuant to a GVD.

Acquiring Part of the Claimant’s Land – Material Detriment

Clause 134 introduces Schedules 9 and 10 to the Bill. According to the Explanatory Notes to the Bill the intention of these provisions is to harmonise the approach to the treatment of material detriment under the vesting declaration and notice to treat procedures and to allow the acquiring authority to enter and take possession of the land they are authorised to take, before any dispute about material detriment has been determined by the Upper Tribunal. To recap, material detriment arises when an acquiring authority only needs to acquire part of a plot of land with the result that the remaining or retained land is less useful or less valuable to a significant degree.

Where claimants wish to challenge the taking of part only of their land, because of material detriment that will be suffered to their retained land, they can serve a counter‐notice on the acquiring authority requesting that they purchase the entire property. The acquiring authority have the choice to either withdraw, take all the land, or refer the matter to the Upper Tribunal (Lands Chamber) for determination.

Currently, where a GVD is in place the procedure for serving a counter‐notice is set out in Schedule 1 to the Compulsory Purchase (Vesting Declarations) Act 1981, and a  reference to the Upper Tribunal will prevent entry onto land being taken until the issue of material detriment is resolved. Where a notice to treat has been served there is no statutory process for serving a counter-notice – case law governs their service.  

Where material detriment arises following the service of a  notice to treat, the Bill provides for a  new detailed process. Where possession has not been taken, the acquiring authority would be barred from taking entry if a counter-notice is served.

Where material detriment arises following the service of a GVD and a counter notice has been served before the vesting date, the Bill proposes that vesting date is delayed until such date as shall be determined to be the vesting date pursuant to the relevant legislation.  This means that the transfer of title and the right to take possession are both delayed. A counter notice might be served after the vesting date if the owner had not been notified of the making of the GVD. Paragraph 12 of the new schedule 10 allows the acquiring authority to specify a new vesting date where the counter notice has been referred to the Tribunal. The Tribunal, when it determines the issue, must then order a new vesting date for the additional land, and, if no new vesting date has been specified under paragraph 12, for the original land that was proposed to be acquired.

As indicated above, according to the Explanatory Notes, one of the aims of these particular reforms is to facilitate entry for the acquiring authority in advance of the determination of any dispute about material detriment by the Upper Tribunal. However, there is a process which must be followed before entry can be achieved so careful consideration of the provisions will be required to determine their efficacy in permitting entry prior to any determination by the Upper Tribunal.

Finally, clause 134 also incorporates the ability for subsoil acquisition to be exempt from material detriment notices – a reform which is likely to be welcomed by acquiring authorities.

High Court challenges

Clause 135 concerns  challenges to the validity of CPOs in the high Court. The clause makes it clear that the court has the power to quash the decision to confirm the compulsory purchase order as well as the power to quash any provision of the order itself. Where the compulsory purchase order itself is found to be sound but there is an error in the decision to confirm the order, the court may decide to quash the decision alone. This means that the order will go back to the confirming Minister for reconsideration. This be welcomed by acquiring authorities as an error in the confirmation process will not mean that the CPO process must always be commenced again from scratch.

Clause 136 includes new provisions extending the time period to implement a compulsory purchase order where a CPO has been challenged in the courts. [worth explaining that the extension is 1 year or until the challenge is finally determined, whichever is the earlier?] This is another change which will be welcomed by acquiring authorities. It could, however,  cause difficulties for  claimants who may have been unaware of when a challenge was finally determined – or even whether one had been initiated - and therefore thought the 3 years had expired. As a matter of good practice, acquiring authorities may wish to consider keeping those affected informed of the progress of any challenges.

Power to Override Rights

Clause 137 extends existing powers to override easements and other rights under the Town and Country Planning Act 1990 and other legislation to acquiring authorities, such as statutory undertakers, which do not already have those powers. Adopting a consistent approach to this issue is a welcome development.

Clause 138 provides for payment of compensation where rights are overridden.

Clause 139 introduces Schedule 11 to the Bill which makes amendments that are consequential on clauses 137 and 138 and repeals existing powers to override easements and other rights which will be replaced by the new power in clause 137. In particular it is worth noting that section 237 of the Town and Country Planning Act 1990, - perhaps the most familiar and well used of the existing powers to override, is to be repealed and replaced following the enactment of clause 137.

Timing Issues

The CPO provisions in the Bill are not amongst those that are due to take effect on enactment of the legislation, so commencement orders will be required before they become operative.

Final Comments

Whilst the proposed reforms have yet to complete their journey through the parliamentary process, the Government has decided not to delay publication of new guidance on CPOs (see link below). As the intention is to convert this to a web-based resource, in the unlikely event that there are extensive revisions to the CPO provisions in the Bill it will be relatively easy to amend the guidance to reflect any such changes.