The Government has launched a further consultation exercise aimed at reforming the compulsory purchase regime. The deadline for responses is 11:45am on 15 May 2016 and a link to the consultation is provided below.

We would comment as follows on the suggested changes:-

  • The bringing into line of provisions relating to the no scheme world and planning assumptions with those that are in Land Compensation Act 1961 post the Localism Act 2011 is a welcome move.
  • Also to be welcomed is the confirmation that public investment in infrastructure schemes should still be capable of being disregarded. Having said this, it does seem overly prescriptive to identify a prescribed list of infrastructure schemes to be disregarded. This disregard should also not be limited to publicly funded schemes, as many regeneration schemes require major up front private investment in infrastructure, which should also be capable of being disregarded in certain circumstances.
  • Those championing mayoral devolution will welcome the confirmation that mayoral development corporations’ activities should all be capable of being disregarded when it comes to assessing compensation – thereby maximising the prospect of the public benefitting from increases in land value associated with public investment. There is an argument that this principle could be applied more widely to other long term and large scale comprehensive regeneration schemes, requiring phased CPOs, so that the costs of acquisition in the later phases are not increased as a result of investment in the earlier phases.
  • The adjustment in the distribution of loss payments in favour of occupiers rather than investment owners seems reasonable, as these payments are intended to reflect the disruption and inconvenience of being compulsorily acquired.
  • The review of the Bishopsgate principle for section 20 claims which provides that the acquiring authority should assume that landlords will terminate a tenant’s interest at the earliest opportunity following service of a notice to treat will be welcomed by claimants.
  • The introduction of a punitive rate of interest of 8% above Bank of England base rate for late advance payments provides a major incentive to acquiring authorities to comply with the new timescales proposed in the Housing and Planning Bill, as the sums could soon mount up on significant claims or where multiple interests are being acquired.
  • The suggestion of a higher rateable value threshold for blight notices in London seems sensible, subject to seeing how this is set and ensuring that it does not unduly impact on important infrastructure schemes such as Crossrail 2.
  • A less predictable suggestion is the repeal of section 23 Land Compensation Act 1961 claims, which, it is claimed, is little used. This is likely to be welcomed by acquiring authorities though as it provides greater budget certainty that a settlement is genuinely full and final.
  • The proposals for greater flexibility for joint promotion of orders – such as by TfL and GLA for transport and regeneration schemes – is a welcome announcement.
  • A 6 week period to publish notice of confirmation of a CPO and so bring the order into operation seems appropriate and will provide certainty to all affected.
  • Also welcome news is the proposal to extend powers of temporary possession to other acquiring authorities, as this will provide increased flexibility over the use of powers, and improve proportionality of land take. Whilst there is a need to provide greater clarity over the application of CPO Compensation Code principles to temporary possession powers, the devil will be in the detail here. The proposal to apply the advance payment regime to temporary possession powers has potential disadvantages as it risks delaying the ability to take possession and start work and has potential cost implications which will need to be factored into the budget.

CPO consultation: https://www.gov.uk/government/consultations/further-reform-of-the-compulsory-purchase-system