Latest statistics from MHCLG updated in October 2024 (Compulsory purchase orders: Register of decisions – GOV.UK) confirm that so far this calendar year there have been 38 decisions on compulsory purchase orders in England, 20 made under section 226 of the Town & Country Planning Act 1990 and 18 under section 17 of the Housing Act 1985. 20 of these decisions were referred back to acquiring authorities (“AAs”) to confirm with no outstanding objections. Of the remaining 14 – 11 were confirmed by inspectors with only three decisions made by the Secretary of State. Three Housing Act CPOs were withdrawn as their objectives were achieved in the face of a CPO and one 1990 Act CPO was withdrawn[1]. This compares to 38 decisions in 2023 of which 22 were referred back for confirmation with no objections, 12 confirmed by inspectors, three by the Secretary of State leaving one which was not confirmed by an inspector[2].
Also published in October 2024 by MHCLG is updated Guidance on the CPO Process (Compulsory purchase process: guidance – GOV.UK). Whilst the need to show a compelling case in the public interest remains there is a distinct change in some of the language. AAs must “understand the impact of the exercise of compulsory purchase powers… on those with an interest in the land. through direct engagement with those parties” and “attempt acquisition of all of the land and rights… by agreement”. The AA will need to consider what mitigation measures will be in place against any identified impacts. This may include relocation options or charters for residents or businesses. These processes can precede the CPO and/or run alongside or in parallel with commencement of the CPO processes. Logically consideration of impacts and mitigations will need to be considered early on as part of the planning process. There is much more specific guidance about what should be offered to achieve early acquisition.
In other respects, recognising the realities of promoting CPOs, the updated guidance is favourable to AAs. There is greater acceptance of uncertainty where there are impediments to delivery of a scheme and an acknowledgment that it will not always be possible for an AA to have detailed proposals for the land included in a CPO suggesting a reduced level of detail will be acceptable in some cases, for example.
At the same time the RICS has updated its Professional Standards for those surveyors advising in respect of compulsory purchase and statutory compensation with effect from 23 December 2024 (Surveyors advising in respect of compulsory purchase and statutory compensation, UK 2nd edition).
Against this background we also have the enactment of section 14A of the Land Compensation Act 1961[3] which makes provision for a direction to remove the prospects of planning permission from the assessment of compensation – the removal of hope value. This tool can be used for the compulsory purchase enabling powers listed in Schedule 2A to the Acquisition of Land Act 1981 but as you would expect it includes section 226 of the TCPA, section 17 of the Housing Act, section 10 of the New Towns Act, section 142 of the Local Government Planning and Land Act 1980, section 333ZA of the GLA Act 1999, section 9 of the Housing & Regeneration Act 2008 and various powers available to NHS Trusts & Foundation Trusts.
Who will use it first? It is not compulsory to do so. Any AA considering the use of these powers must first consider if the Subsidy Control Act 2022 (which replaces the previous European state aid regime) is engaged.
Instinctively one might imagine landowners fighting this additional provision tooth and nail. AAs proposing to rely on this –for housing schemes– must include some specified provision of affordable housing. Thus, the scheme underlying the CPO must include the provision of specified numbers of affordable housing. This commitment to affordable housing must be set out in a separate Statement of Commitments[4]. This is separate from the Statement of Reasons. The whole purpose of this power is to facilitate the provision of affordable housing but the guidance is clear[5] that it is less likely to accrue enough public benefit to warrant the imposition of the direction if the private sector has agreed to make financial contributions to or completely underwrite the delivery of the scheme underlying the section 14A direction. Potentially prior to confirmation of the CPO the AA can ask the confirming authority to amend the Statement of Commitments but only if it still includes affordable housing. Why should the use of this restriction on the availability of the compensation based on hope value be limited to securing additional affordable housing for public good? Does there have to be a direct correlation between the compensation not payable and the added public benefit or value of the additional affordable housing? How does planning policy affect the potential deployment of this power? If subsequently the Statement of Commitments are not fulfilled, then additional compensation may become payable.
Might the limitations of this power be widened in forthcoming Planning and Infrastructure Bill likely to come before Parliament in 2025?
[1] The London Borough of Southwark (Elephant & Castle Town Centre) Compulsory Purchase Order 2023 but a second CPO was made and a decision is awaited
[2] See The Royal Borough of Windsor & Maidenhead (Nicholson Shopping Centre & Surrounding Area at High Street, Queen Street and King Street, Maidenhead CPO 2022)
[3] Land Compensation Act 1961
[4] 314.1
[5] 321.2