Vicarage Field CPO – Part 3

In this final post on an Inspector’s decision not to confirm Barking and Dagenham’s Vicarage Field CPO, I look at how the Inspector treated alternative proposals for redevelopment made by two of the objectors and speculate as to whether there might have been a different outcome had the reforms in the Levelling UP and Regeneration Bill (“LURB”) been in place.

If you haven’t already read them, part 1 of the series looked at viability/funding issues for the CPO and part 2 at stakeholder engagement.

Activation schemes

In pre-Amazon days, when the retail property market was still booming, battles between rival developers would often spill over into the CPO world. In part 1 of this series, we looked at the contest between Arrowcroft and Stanhope/Schroder (through their joint venture CGLP) to redevelop the Croydon Gateway site. The Secretary of State, on the recommendation of the Inspector, decided not to confirm the CPO partly on the grounds of viability but also because (as the Inspector said):

“It may not fit with the Council’s longstanding wish for an arena or ambitions for the site, but the CGLP proposed development has the benefit of planning permission and high plaudits accorded to it in the process. Many of the conditions for implementing the scheme are in place; it can proceed without delay. Should the CPO not be confirmed, there is a strong likelihood that the land would be developed in a manner that would deliver the well-being virtues intended by the CPO…In effect the underlying purpose of the CPO could be achieved through an alternative scheme.”

Turning back to Vicarage Field, the Inspector considered three alternative schemes for a part of the site (24-34 Station Parade) which were put forward by the owners of those properties referred to as the Station Parade properties (“SPP”). Only the third scheme, proposing an 8 storey 155 bedroom hotel with ground floor retail, was arguably “integrated” with the remainder of the CPO scheme. In any event, the Inspector was not persuaded that SPP had the funds to deliver the alternative scheme; that they could definitely secure vacant possession of the land; or that it would deliver the comprehensive benefits that the CPO scheme would.

Similarly, the Inspector concluded that the alternative proposals presented by NHS Property Services for the former Vicarage Field Health Centre would not have achieved the comprehensive benefits to be delivered by the CPO scheme. The Inspector also doubted whether the NHS would in fact have implemented any alternative scheme since it entered into negotiations with the Council as a willing seller.

An unusual feature of the inquiry was the suggestion that these alternative proposed schemes could be tested through an application for a certificate of appropriate alternative development (“CAAD”). Although the Inspector considered that it would have been an “entirely appropriate approach”, it’s not obvious that it would have helped in the decision-making process. The CAAD regime is in place to assist in the assessment of compensation on the assumption that the underlying CPO scheme is cancelled. The grant of a CAAD would not demonstrate that any alternative scheme would deliver public benefits or that it would viable. A CAAD is not a permission so any alternative scheme that could be integrated with the CPO scheme would be completely out of kilter with the timeframes (and presumably conditions) relating to the CPO scheme.

In any event, as Christopher Young KC said in closing for NHS PS, an objector would be understandably dubious that the planning authority promoting the CPO would be able to consider a CAAD application neutrally. While it is possible to appeal to the Tribunal, that would take considerable time and (irrecoverable) costs.

LURB to the rescue?

There are two potential reforms in the Levelling-Up and Regeneration Bill which may have had an effect on the consideration of the Vicarage Field CPO.

Firstly, the proposed removal in clause 144 of the Bill (to be fleshed out in secondary legislation) of the automatic right of a remaining objector to an inquiry into the CPO with a (more informal) “representations procedure” likely to consist of a hearing being held instead. I would very much hope that a CPO of this size and significance with significant opposition would be subject to an inquiry. I have significant doubts whether a hearing without the opportunity for objectors to cross-examine the AA’s witnesses (and vice versa) would have provided a rigorous testing of the evidence and therefore a fair hearing to the objectors.

Secondly, assuming (and it’s a big assumption) that the Inspector could have satisfied herself as to the level of engagement with landowners, the CPO (under proposals in clause 145 of the LURB) could have been conditionally confirmed subject to viability being demonstrated and/or funding secured. The skeletal details provided in the LURB for the conditional confirmation concept (also to be fleshed out in secondary legislation) allows an inspector to specify that a conditionally confirmed CPO cannot be implemented until the specified condition(s) have been satisfied within a stated timeframe. If a discharge application has not been made within that timeframe, the CPO expires. If an application is made, any outstanding objectors have the right to make relevant representations (presumably written rather than oral representations).

In the second edition of Compulsory Reading, Paul Arnett and I debated the pros and cons of conditional confirmation. To quote myself:

“What if a CPO could be made conditional on the AA satisfactorily demonstrating within (say) 12 months that the scheme is fully funded or even that a construction contract has been signed? With the principle of the CPO (conditionally) established, funding should be easier to secure. With funding in place, landowners can then be reasonably confident that the CPO will be implemented. On the other hand, if funding can’t be secured and demonstrated to the confirming authority within the specified period then the condition will not be discharged and the CPO will expire enabling the shadow of the scheme to be lifted much earlier than otherwise would be the case.”

To which Paul responded:

“It seems to me that the new conditional confirmation route could potentially enable quite significant impediments to a scheme (e.g. planning and financial) which go to the heart of the justification for the CPO powers sought to now be hived off to conditions after the principle of the CPO has been established. While objectors will have the right to make written reps on the discharge application, there’s no provision for an in-person inquiry or hearing to be held to determine the discharge of condition applications. By this point in the process the principle of the CPO has already been set in stone meaning, in practice, it is likely to be an even more uphill struggle to stop the CPO juggernaut in its tracks.”

One-nil to Paul, I think. It’s clear that at least in this case, the right to a fair hearing could not have been satisfied by a written representations procedure to address the key viability issues. The objectors were able to instruct Counsel and call witnesses to test the robustness of the promoter’s position on viability. The objection and inquiry process itself meant that information taken into account by the Inspector was disclosed when it would not necessarily need to be on a discharge application. Funding might conceivably be a different matter – a CPO that was confirmed on condition that the promoter secured £Xmillion by [date] could more reasonably be dealt with by straightforward factual evidence being produced of the funding streams provided that full disclosure and transparency is required.

What’s next?

I hear on good authority that a legal challenge to the decision is likely to be forthcoming. As I said in the first of this series of articles the setting of legal guidelines on stakeholder engagement will be helpful to future promoters and objectors alike. Unfortunately, the CPO Guidance is far too vague on the tests required to secure the necessary authorisation to obtain compulsory acquisition powers and there simply aren’t enough legal decisions on CPO to plug the gaps.

When DLUHC next updates its guidance, I hope it will be clearer on those tests. For example, saying that acquiring authorities should “consider” (for example) “offering advice and assistance to affected occupiers in respect of their relocation” is not helpful. Is that a pass/fail test or simply good practice? Similarly, the guidance on funding and viability could be interpreted in any number of ways.

The Government rightly wants public bodies to use their compulsory purchase powers more proactively to deliver housing and regeneration and putting clearer parameters around the appropriate use of these powers in the CPO Guidance would help facilitate this imperative. The reputational risks of non-confirmation will deter many public bodies from navigating the process unless they know exactly what their obligations are and how they can ensure that they have fulfilled them.