At the same time as giving the planning system something of a “spring clean” prior to Parliament being dissolved at the end of March, the Government also published a consultation document on its proposed reforms to the compulsory purchase process.
The consultation paper presents a package of proposals for improvements to the compulsory purchase process and also, long overdue, changes to Government guidance that are aimed at making the process “clearer, faster and fairer” for all parties involved and with a view to bringing forward more brownfield land for development.
The main proposals for change are set out below.
A CLEARER system…..
- Improved guidance – guidance on compulsory purchase is to be updated and provided as a web-based resource, similar to that already adopted for planning guidance.
- Updated guidance – whilst many of the key concepts contained within Circular 06/2004 “Compulsory Purchase and the Crichel Down Rules” will be retained, this ten year old Government guidance, together with an additional 13 other circulars and guidance documents, are to be cancelled once the new guidance is issued.
- Encouraging public authorities to offer good levels of compensation – guidance is proposed to be introduced with the aim of encouraging Acquiring Authorities to offer more reasonable initial offers of compensation, with the aim of avoiding the need for compulsory purchase and its associated costs.
A FAIRER system……
- Extending and harmonising the period of notice before entry – proposals are included that will ensure that a longer minimum period of notice of three months is given to land owners/occupiers before entry and taking possession. At present, occupiers may only have 14 days to relocate on service of Notice of Entry following a Notice to Treat.
- Improved system of advance payments of compensation – it is proposed that a claim for an advance payment of compensation will be capable of being made at any time following the date of confirmation of a CPO and that a claim must be paid within two months of the date of Notice to Treat or execution of a GVD. A “fast-track” decision making process to determine disputes over the amount of an advance payment is also proposed.
- Improved interest rates on outstanding compensation – the amount of interest on outstanding compensation is proposed to be increased from 0.5% below base rate to 1% above it. The setting of a 1% interest floor is also being mooted.
- Transferring mortgages to avoid negative equity – to avoid a position of negative equity crystallising the Government is proposing to work with lenders and the Financial Conduct Authority to secure a voluntary agreement on porting mortgages between properties following compulsory acquisition.
- Harmonising powers of entry – Acquiring Authority powers of entry for surveys are to be aligned across all Acquiring Authorities so that entry can be gained at an earlier stage in the compulsory purchase process.
- Extending powers to override easements and restrictive covenants – the Government recognises that there is an inconsistency between the powers of Acquiring Authorities to override easements and restrictive covenants. The proposal is to extend existing powers to all Acquiring Authorities, including statutory undertakers, which do not already have these powers.
A FASTER system……
- Strict timescales to apply to the CPO process – the introduction of strict time limits is proposed that will apply once the starting date letter has been issued including for the holding of any site visit; the completion of the Inspector’s Report; and, ultimately, the issuing of the Secretary of State’s decision letter.
- Delegated decisions – a proposal is included that would enable decisions on compulsory purchase orders that “do not raise issues of more than local importance” to be delegated to Inspectors rather than such Orders being determined by the Secretary of State.
- Reforming the High Court challenge process – proposals include the introduction of new powers for the courts when faced with a legally flawed decision of the Secretary of State confirming an Order. New powers will enable the court to quash that decision alone rather than the whole of the Order. This will avoid the need for an Acquiring Authority to have to restart the whole of the CPO process and allow the Secretary of State’s decision to be retaken leaving the Order unaffected.
The consultation document can be found online and the deadline for responses is 9 June 2015.