Consultations on compulsory purchase in England and Wales

Two consultations were published just before Christmas on compulsory purchase. One was from the Ministry of Housing, Communities and Local Government (MHCLG) entitled “Compulsory Purchase Process and Compensation Reforms”, and closes on 13 February 2025. The second, from the Law Commission, is entitled simply “Compulsory Purchase”, and has a response deadline of 31 March.

This is a summary of the important parts of the MHCLG consultation as this is the most pressing, together with our initial observations. A later blog will focus on the Law Commission consultation.

Please send any comments you have to cpo@cla.org.uk by 31 January.

Under the previous government, the Levelling Up and Regeneration Act 2023 brought in changes to the compensation regime for land that is acquired compulsorily. This act allows those compulsorily acquiring land to ignore hope value (the value attributable to future development potential) where that land is to be used for new hospitals, new schools or development including affordable housing. This power is balanced by a public interest test and the need, if hope value is to be removed, for a direction from the minister.

The CLA objected strongly to this at the time, but it is now in law. The new MHCLG consultation looks at the detail of implementation.

Neither this government nor the last has explained why they believe it is lawful for the state to take land off an individual and pay an undervalue even if they believe that it is in the public interest. Nor have they carried out any impact assessments detailing assumptions about how often this power will be used, the benefit to the state and the impact on the landowner. We will continue to challenge the government on this.

The government maintains that those affected by compulsory purchase should be entitled to “fair compensation”. No one that I have met feels that they have come through compulsory purchase under the current regime having felt that they have had fair compensation. The government must therefore define what exactly “fair” is.

The CLA will continue to argue that hope value is part of the market value of any property. It is only visible in compulsory purchase because it is artificially split out in the valuation for compulsory purchase compensation claims.

Landowners are keen to bring land forward for development. The real blocker is often nothing to do with land values but with planning policy, development control and legal departments within local planning authorities. Even the recent revisions to the National Planning Policy Framework (NPPF) offer little to help development for rural settlements.

This consultation asks whether:

• Directions on behalf of town and community councils should be allowed to apply for directions to remove hope value. The CLA does not believe that this power should be available to town and community councils. If the power to remove hope value in this way is allowed then it will move compulsory purchase to a first choice, rather than a measure of last resort.
• Should Planning Inspectors be able to make decisions on the removal of hope value? The question here is whether a politician or a civil servant is best placed to make the decision on the removal of hope value and who would be most objective in reaching that decision. Please let us know your thoughts.
• The government is also looking at introducing a general power that would enable compulsory acquisition with no hope value on brownfield land in built up areas, even where there is no planning consent, and land allocated for residential development in an adopted Local Plan but which has not come forward for development. The CLA would object to any automatic right to remove hope value. It must be an individual application for a direction on each site, as compensating at an undervalue (which the removal of hope value is) has to be taken on each site.

These loss payments are paid to landowners and occupiers when they have land acquired. Currently the loss payment is 10% of the land value with a ceiling of £75,000. This is split between the basic loss payment of 7.5% of the person’s interest in the land and 2.5% to the occupier. An owner-occupier gets both the basic and the occupiers payment. The paper proposes that this is reversed so that the occupier gets 7.5% and those with an interest get 2.5%.

The CLA believes that this proposal fails to offer adequate compensation those who lose their title to land. To start with, The ceiling of £75,000 is outdated and the total of 10% loss payment is inadequate. We would welcome your thoughts and experiences on this.

This would allow a greater use of temporary possession rather than permanent acquisition.

We are cautious about temporary possession as we have seen how badly it has been used by HS2. It has been used to delay payment of compensation for permanent land take which was confirmed at a later date. HS2 took land on a temporary basis and undertook permanent works upon it including demolition, building, landscaping and planting.

In addition, one of the valid reasons to object to compulsory acquisition is that the developers do not need the land permanently, so should not be able to take it permanently. This measure would remove the ability to negotiate on temporary occupation. If land is taken temporarily then compensation should be paid in advance. Again, please let us know of your experiences of HS2 or other schemes.

The government wants to allow the service of notices by electronic means, where it is agreed between the parties.

Whilst there are advantages to serving notices electronically as they can be forwarded to your professional advisers easily, these are important time-sensitive documents. Should they always be sent by recorded delivery mail?

This proposal is to identify the location of land that is to be required, rather than a precise schedule of every area of land to be acquired, as this will be available in the compulsory purchase documentation available either online or at a local location.

This would seem a sensible suggestion, but would you rely on public adverts in the local newspaper to inform you?

This proposal would allow small corrections to the orders, mainly to account for errors. This would seem a simple solution for small and minor issues.

Has the inability to get an order corrected been a problem for you in the past? Or might this new power to change an order be a problem for you in the future?

This proposal would allow the Secretary of State to devolve the confirmation of the compulsory purchase order to an Inspector, rather than making the decision themselves.

The CLA believes that decisions to acquire land by compulsion should be taken at the highest level, but again we are interested in your views on who would be most objective in this instance, a politician or a civil servant?

The CLA will campaign on your behalf, but your experiences and views are vital to inform our policy going forward.

Please send your observations, views and comments to cpo@cla.org.uk by 31 January, so we can work them (in anonymised form) into our response.