Waverley Borough Council Home Page Waverley Borough Council Home Page


Waverley Borough Council Committee System - Committee Document

Meeting of the Environment Overview and Scrutiny Committee held on 19/02/2002
COMPULSORY PURCHASE AND COMPENSATION: THE GOVERNMENT’S PROPOSALS FOR CHANGE



The Department for Transport, Local Government and the Regions (DTLR) has issued a consultation paper outlining proposed changes to the system of compulsory purchase.

The aim of the proposed reforms is to make the system of compulsory purchase a more efficient and effective means of achieving land assembly, by making the procedures and compensation arrangements simpler, fairer and quicker.

The purpose of this report is to summarise the issues raised in the consultation paper and to recommend to the Executive suggested comments to be forwarded to the DTLR.

There are no "Opportunities for All" or community safety implications arising from this report. The resource, environmental and Human Rights implications are set out in the report.
APPENDIX E

WAVERLEY BOROUGH COUNCIL

ENVIRONMENT OVERVIEW AND SCRUTINY COMMITTEE – 19TH FEBRUARY 2002

________________________________________________________________________

Title:
COMPULSORY PURCHASE AND COMPENSATION: THE GOVERNMENT’S PROPOSALS FOR CHANGE

[Wards Affected: All]
________________________________________________________________________

Summary and Purpose

The Department for Transport, Local Government and the Regions (DTLR) has issued a consultation paper outlining proposed changes to the system of compulsory purchase.

The aim of the proposed reforms is to make the system of compulsory purchase a more efficient and effective means of achieving land assembly, by making the procedures and compensation arrangements simpler, fairer and quicker.

The purpose of this report is to summarise the issues raised in the consultation paper and to recommend to the Executive suggested comments to be forwarded to the DTLR.

There are no "Opportunities for All" or community safety implications arising from this report. The resource, environmental and Human Rights implications are set out in the report.
________________________________________________________________________

Introduction

1. The consultation paper on compulsory purchase orders (CPO’s) is one of the ‘daughter documents’ to the Planning Green Paper. The paper notes that most development is carried out as a result of proposals brought forward by private sector developers. However, sometimes it is necessary for local authorities and other bodies such as transport undertakers and utility companies to take a pro-active lead in assembling land for development. The Government believes that compulsory purchase is vital to the achievement of many of its planning objectives. Examples cited in the paper include the reuse of brownfield sites, the regeneration of city centres or run down areas, and the implementation of major infrastructure projects.

2. However, the paper notes that there is a widespread view that the compulsory purchase system as currently practised is not achieving its intended purpose of providing an effective means of assembling land. The following problems are identified:-

the piece-meal way in which the current system has evolved. The existing legislation is complex and
difficult to understand. Much of the law rests on past decisions by the courts;

there is uncertainty as to whether the powers available to local authorities, in particular, are adequate
for the functions they are now expected to perform. Consequently, local authorities are discouraged
from making use of their powers with the result that, when it becomes inescapable, they have little
expertise;

the concerns of those whose land is to be taken becomes outright opposition because they are worried about the inordinate length of time which the compulsory purchase process can take and whether they
will be adequately compensated; and

those wishing to invest in the development of land to be acquired are also deterred by the length of time the process can take, and so are reluctant to make the sort of commitment which acquiring authorities
feel they need in order to be able to justify using their compulsory purchase powers.

3. The Government considers the compulsory purchase system has to strike a balance between the needs of acquiring authorities and the interests of those whose land is being acquired. The paper states that “it is essential for the latter to be properly protected, but that should not mean that the acquisition of private property, with appropriate compensation, can never be justified”. 4. Some of the proposals will have to await the opportunity to introduce new legislation, but others can be implemented more quickly through advice and guidance. Legal issues are being worked on in parallel by the Law Commission, with the aims of improving speed, simplicity and fairness. In the interim, the DTLR has recently published five public information booklets on the compulsory purchase and compensation system, together with a Compulsory Purchase Procedures Manual setting out a comprehensive guide to existing procedures and best practice. A new Circular will be issued early in 2002 providing updated advice on operating the existing system to best effect.

Background

5. CPO's are rarely issued because of the widespread view that the process is cumbersome, expensive and should only be used a last resort. The current system provides no incentive for landowners to settle with the purchasing authority before the compulsory purchase procedure nears its end. As a result, many landowners hold out until late in the process in the hope that they can increase the value of their compensation. Local authorities often spend a large amount of time and money taking the process towards a public inquiry, only for the landowner to relent at the last minute and sell up.

6. The proposals in this consultation paper have been widely welcomed by organisations involved in regeneration and by professionals across the spectrum of the planning, surveying and property development industries. Having regard to this Council's lack of experience in compulsory purchase action, officers do not feel it is appropriate to make a detailed response to the procedural changes outlined in the consultation paper. However, officers consider that the opportunity should be taken to highlight the potential role of CPO's, as a last resort, in the protection of key services and facilities which serve local communities.

The Government's Proposals

7. The consultation paper was published in December 2001 and comments are invited by 27th March 2002. It is divided into three main sections. These relate to the law and powers of compulsory purchase, the process of making and confirming an order and compensation arrangements. The main proposals in each section are summarised below, together with the suggested comments from the Council which are set out in bold italics.

Laws and Powers

8. Powers for the compulsory purchase of land are set out in hundreds of public or private Acts of Parliament relating to a wide range of bodies. The Law Commission will be producing a consultative report in Spring 2002, setting out proposals to codify and consolidate the existing legislation.

9. The consultation paper acknowledges that particular concerns have been expressed about the adequacy of the powers available to local authorities in the Town and Country Planning Act 1990. The Government proposes to introduce new legislation which would:-

a. define a full range of planning and regeneration purposes, including halting the physical,
economic and/or social deterioration of an area, for which compulsory purchase powers can be used; and

b. clarify and amend the law with regard to the justification required for the exercise of compulsory purchase powers for planning purposes.

10. The Government believes that improving the clarity of the statutory compulsory purchase powers available to local planning authorities would increase the predictability of outcome. This would, in turn, help both to speed up the decision-making process and to encourage more authorities to make use of compulsory purchase powers.

11. In order to justify the acquisition of private property, it will continue to be necessary to show that there is a public interest need which outweighs private rights. The acquiring authority will need to be able to demonstrate why it needs the land, in broad terms the purpose for which it will be used and that there are no other barriers to implementation. The paper indicates that justification could include reference to the core policies in the authority’s Local Development Framework or those in the Community Strategy. Alternatively, the designation of sites in action plans adopted as part of the Local Development Framework could provide a means of establishing a clear rationale for the compulsory purchase. Some indication would be needed that a scheme has a reasonable chance of attracting sufficient financial support to enable implementation to go ahead if the CPO is confirmed.

Draft response: The proposal to define the full range of planning and regeneration purposes for which CPO’s can be used is also particularly welcomed. Whilst CPO’s under the Town and Country Planning Act are normally used to facilitate urban regeneration initiatives or major infrastructure projects, there is another potential role for CPO’s which this Council would like to highlight.

The Planning Green Paper emphasises the importance of community engagement in the planning process and stresses the role of Local Development Frameworks (LDF’s) in delivering the long-term vision set out in each authority’s Community Strategy. An issue which is currently of major concern to many communities, particularly in rural areas, is the loss of key services and facilities such as shops, post offices and public houses. Local authorities have no powers to prevent the loss of such services, other than through their role in determining planning applications for subsequent re-development/re-use of the premises.

Where an authority identifies the need to protect key services as an important objective in its Community Strategy and/or LDF, and where such services are closed even in the absence of planning consent for an alternative use, there could be a case for pro-active action by the authority in using its compulsory purchase powers to acquire the premises in the interests of the wider community. Such action would clearly be a last resort and would have to be supported by the local community. It would also need to be justified by evidence that another person or organisation willing to operate the service could be found. In such circumstances, this Council believes that the proposed new legislation should make provision for the use of compulsory purchase powers.

Compulsory Purchase Process

12. The paper notes that the current system is off-putting because it is complex and authorities are afraid of getting things wrong. The Government therefore intends to simplify procedures wherever possible. The following measures are amongst those proposed to make the process simpler, quicker and fairer to those affected:-

providing, if practicable, a single, consistent and up-to-date definition of ‘statutory undertaker’ for as many of the statutory purposes related to compulsory acquisition of land as possible; encouraging the use of hearings and written representations, instead of public inquiries, to
speed up the decision-making process; providing for all those with an interest in the land (including tenants) to be treated as statutory
objectors; specifying that, where a notice is served on a person with a statutory right of objection, this
must include full details of his rights and duties with regard to the implementation of the CPO; introducing requirements to register the status of all CPO’s (from the time at which they are
made onwards) as local land charges; allowing for the amendment of a CPO once made to correct minor errors, to save having to
start the process over again; allowing for the confirmation of CPO’s in stages where this will facilitate quicker
implementation; and allowing acquiring authorities to confirm uncontested CPO’s themselves.

13. The consultation paper recommends that authorities should provide a specific case officer to co-ordinate the progress of each CPO. Authorities are also encouraged to maintain an informal dialogue with those whose properties are affected with a view to resolving their concerns wherever possible, using mediation and other negotiating techniques as appropriate.

Compensation

14. The current arrangements for the payment of compensation are considered by the Government to be convoluted, heavily dependent on case law and not always fair and consistent in their application. The consultation paper notes that “people whose property is directly affected by a compulsory purchase order often exercise their rights as statutory objectors in the misguided belief that they will thereby be able to influence the amount of compensation payable to them”. This unnecessarily delays matters at the pre-compensation stage and it can prolong the time taken before final compensation settlements are agreed and paid. It is a major reason why both acquiring authorities and those affected find the current process unacceptable.

15. The Government believes that there is a need for simpler compensation arrangements, based on clearly defined principles. The consultation paper proposes legislation to provide a single statutory Compensation Code, which will ensure that:-

the person from whom land is taken is restored, as far as possible, to the position they would
have been in if there had been no compulsory purchase;

in addition to the value of the land taken, all those affected should be entitled to compensation
for any and all of the actual losses which they can show that they have sustained as a result of
an acquiring authority’s actions; such an entitlement should apply irrespective of whether land is actually taken from the
claimant and even if the acquiring authority decides not to proceed after the CPO has been
confirmed; and

it is not appropriate for there to be any differentiation in entitlement solely as a result of the
powers under which a particular CPO has been made.

16. The consultation paper goes on to consider a number of detailed issues relating to the valuation of acquired land and the calculation of compensation payments.

The proposals to enhance existing compensation arrangements are supported as this may provide an incentive for landowners to move on and hence reduce delays. It is accepted that the value of the land is only one element of the compensation package, and that other costs such as professional fees and taxation liabilities should be reimbursed providing such claims are reasonable and supported by appropriate evidence. It is agreed that a time limit should be set for the submission of a formal compensation claim, and that this should be no more than two years from the date of possession.

Resource Implications

17. There are no direct resource implications unless and until such time as compulsory purchase action were to be proposed by Waverley. In general, the Government’s proposals are likely to result in increased compensation costs for local authorities that decide to instigate compulsory purchase proceedings. However, the consultation paper indicates that those costs should be offset, at least to some extent, by the savings associated with speed and the fact that a simpler, more clearly defined system should result in fewer professional fees.

Human Rights Implications

18. Again there are no direct Human Rights implications unless and until such time as compulsory purchase action were to be proposed by Waverley. The compulsory acquisition of land is clearly a complex issue where the rights of a property owner have to be weighed against the wider community interest. The Government believes that the proposed procedural changes and enhanced compensation provisions set out in this paper will protect the Human Rights of those affected by CPO’s.

Environmental Implications

19. If the proposals in this consultation paper result in significant improvements to the current system, then they can be expected to contribute towards the objectives of urban regeneration and better urban design by facilitating a more co-ordinated approach to development in areas where land ownership is fragmented.

Recommendation

That the report be referred to the Executive for consideration, together with any comments or amendments suggested by this Overview and Scrutiny Committee.

________________________________________________________________________

Background Papers (DoPD)

DTLR: Compulsory Purchase and Compensation; the Government’s Proposals for Change (December 2001)

________________________________________________________________________

CONTACT OFFICER:

Name: Adrian Roche Telephone: 01483 523472
E-mail: aroche@waverley.gov.uk