Making compulsory purchase fit for purpose--reports and reforms.
However, at a time when regeneration bodies are once more prepared to employ their powers of compulsory acquisition in earnest, there is a general recognition that the law of compulsory purchase--many of the principles of which date back to the Victorian era--is in need of an extensive overhaul.
According to the Law Commission, in its recently published Final Report on Compulsory Purchase Order (CPO) procedure, (1) the current law is 'difficult to locate, complicated to decipher and elusive to apply'. These are clearly not the attributes that should be associated with a process which often results in uncertainty, inconvenience, and anxiety for those whose property and homes are affected.
The Planning and Compulsory Purchase Act 2004 (the Act) contains an initial tranche of reforms to the law of compulsory acquisition which took effect on 31 October 2004.
Significantly, Part 8 of the Act amends the existing power of local authorities under section 226(1)(a) of the Town and Country Planning Act to acquire compulsorily land for planning purposes. A local planning authority is now able to acquire land by compulsory means if it thinks it will facilitate the carrying out of development, redevelopment, or improvement on or in relation to the land, on condition that such acquisition will be of economic, social, or environmental benefit to their area.
This reformulation of the section means that the scheme for which the land needs to be acquired does not necessarily have to take place on that land. It also means that the planning CPO power is now inextricably linked to the exercise of the authority's 'well-being' power contained in the Local Government Act 2000. This provides additional support for the use of planning CPOs to deliver regeneration projects which can have profound economic, social, and environmental effects, such as town centre redevelopments.
At the same time that the reforms were introduced, the Government issued new guidance on the use of CPO powers in Circular 06/04. This includes support for the use of the remodelled planning CPO power to deliver a wide variety of regeneration schemes where authorities may have previously relied on other, potentially less flexible powers.
A notable example is the encouragement given to authorities to use the planning power to achieve site assembly for housing market renewal schemes, an area where authorities may have previously been inclined to resort to housing CPO powers. The planning power will often be more appropriate in circumstances where regeneration schemes are being promoted that are housing led but encompass other elements necessary to ensure a sustainable future for a particular neighbourhood (for example community, retail, and employment facilities).
Turning to procedural changes to the CPO regime introduced by Part 8 of the Act, these are intended to speed the process up while at the same time providing enhanced rights to object. The reforms include the possibility of authorities confirming unopposed CPOs in certain circumstances; an extended category of persons entitled to be served with CPOs and to have their objections heard; the introduction of a written representations procedure in the event of outstanding objections; and the possibility of confirmation of orders in stages.
When it comes to CPO compensation, the Act establishes the date at which land compulsorily acquired is to be valued for compensation purposes. It also makes it clear that the valuation is to be based on market values prevailing at the valuation date, and based on the condition that the land is in at that date.
The Act introduces new loss payment provisions. The enhancement of the loss payment regime is intended to provide an additional incentive to encourage early voluntary negotiations between those who have an interest in land and the acquiring authority. The hope is that the payments will avoid the need to CPO land and therefore speed up the process.
The need for further reform
The Law Commission's Final Report was in two parts. The first dealt with CPO compensation and was published in December 2003; the second dealt with CPO procedure and was published a year later. The report on compensation envisages a new compensation code designed to retain the main features of the existing law, albeit within a simpler and more logical structure. The assessment of compensation should be made in accordance with the underlying principle of 'fair compensation', having regard to four heads of claim derived from existing principles: market value of the acquired land; injury to retained land; consequential loss; and (in exceptional circumstances) equivalent reinstatement.
Turning to procedural reforms, again the emphasis is on clarifying and rationalising the principles contained in existing statutory provisions. For example, while the report recommends the retention of the two-stage process of initiation by an 'acquiring authority' (for example a local authority or government department), followed by confirmation by a 'confirming authority' (often a Secretary of State), it advocates the introduction of a unitary procedure which should apply whether the order is being made by a government department or by some other body.
The challenge to authorities
There are two challenges faced by acquiring authorities arising from this reinvigoration of the CPO process. First of all there is a pressing need for the erosion of the CPO skills base that has occurred over the last two decades to be addressed. The fact that officers who have experience of what is a highly specialised field are now few and far between has undoubtedly contributed to the reluctance among authorities to resort to CPO. While the use of consultants can go some way to addressing this skills shortage, the benefits associated with the reformed CPO regime can only be properly exploited if authorities are able to recruit and retain staff with the capability to make it work.
Secondly, the broadening of the scope of planning CPO power and its link to 'well-being' means that increasing numbers of schemes which ultimately rely on CPO to deliver site assembly are going to be 'planning led' but will be dependant on joint working with other disciplines to present a robust case for the social, economic, and environmental benefits associated with the scheme.
(1) Towards a Compulsory Purchase Code: (1) Compensation. Final Report. Dec. 2003; and Towards a Compulsory Purchase Code: (2) Procedure. Report. Dec. 2004. Law Commission. Available online at http://www.lawcom.gov.uk/122.htm
Bob Pritchard is a Senior Associate specialising in planning law at Eversheds in the Manchester Office.