An update on governments proposals for compulsory purchase and compensation

On 10th October the Neighbourhood Planning Bill
received an unopposed Second Reading in the House
of Commons, proposing a modest series of changes to
planning, compulsory purchase and compensation.

Various of the proposals in the government’s February
2016 Consultation on further reform of the compulsory
purchase system are included in the Bill. The most
important is to codify the assessment of compensation
in the ‘no scheme world’. When land is compulsorily
acquired, the scheme underlying the acquisition is
disregarded when assessing the value of the land taken.
The compensation received is not reduced because the
land has been blighted by the scheme but conversely
the landowner does not receive a bonus because of
the higher value caused by a project which relied on
compulsory purchase powers. This approach, known in
caselaw as the Pointe Gourde principle is easy to state
but often very difficult to apply in practice. As Sajid Javid
rightly said the ‘no scheme world is a mixture of obscurely
worded statute and over 100 years of sometimes
conflicting case law’. An attempt to supplement it in
sections 6 to 9 of the Land Compensation Act 1961 has
proved to be entirely useless.
Drawing on work by the Law Commission, the common
law and statutory rules on the ‘no scheme world’ are to
be replaced by the Bill.
The other major change is to introduce a power to
compulsorily occupy land on a temporary basis.
Temporary occupation is often required for big
schemes, either as working areas or compounds, or for
accommodation works. No power to compulsorily take
possession on a temporary basis is presently available
for compulsory purchase orders. Temporary powers are
regularly included in hybrid Bills, such as High Speed 2,
and sought in development consent orders for nationally
significant infrastructure projects. Part 2 of the Bill
includes a new regime for compulsory purchase orders
to set out land which can be temporarily occupied for
the project.
Other changes include improving compensation for
businesses with short tenancies, interest being paid if
advance (i.e. interim) payments of compensation are
delayed and allowing the Greater London Authority and
Transport for London to acquire land for joint purposes.
The compulsory purchase and compensation changes
are a further stage in seeking to modernise the system.
However they will reinforce the need to codify and
consolidate the legislation, which will now be spread
over more Acts, and to update the language which dates
back to Sir Robert Peel’s government.

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