The Scottish Government

Circular 38/1992

DISPOSAL OF SURPLUS GOVERNMENT LAND - THE CRICHEL DOWN RULES

The Chief Executive
Regional and Islands Councils

This circular amends circular 21/1984 (see paragraph 27)

The Chief Executive
District Councils
(except in Highlands, Borders and Dumfries and Galloway Regions)

Our Ref: PGB/2/4

30 October 1992

planning series:

National Planning Policy Guidelines (NPPGs) provide statements of Government policy on nationally important land use and other planning matters, supported where appropriate by a locational framework.

Circulars, which also provide statements of Government policy, contain guidance on policy implementation through legislative or procedural change.

Planning Advice Notes (PANs) provide advice on good practice and other relevant information.

Statements of Government policy contained in NPPGs and Circulars may, so far as relevant, be material considerations to be taken into account in development plan preparation and development control.

contents

Disposal of Surplus Government Land - The Crichel Down Rules

introduction

1. This document sets out the revised non-statutory arrangements ("Crichel Down rules") under which surplus Government land which was acquired by, or under a threat of, compulsion should be offered back to former owners, their successors, or to sitting tenants (see paragraphs 12, 13, 15 and 16 below. For the sake of brevity, all bodies to whom any one or more of the rules apply are referred to as "departments", whether they are Government Departments, including Executive Agencies (and/or other non-departmental public bodies ("NDPBs")). See paragraphs 3 and 4 below.

2. Detailed guidance on general procedures to be followed when disposing of surplus land are set out in the Treasury's Dear Accounting Officer letter (DAO(GEN) 13/92) dated 23 July 1992. Disposing departments should, where appropriate, also have regard to the advice contained in the internal Scottish Office guidance on the disposal of surplus Government land.

3. So far as local authorities and statutory bodies are concerned, the general principles underlying these rules and procedures are commended for application, where appropriate. Their approach when disposing of surplus land must, however, depend on their particular functions and circumstances. For instance, exception (5) under paragraph 14 below would, in the Government's view, apply to disposals by statutory bodies with specific primary rather than incidental functions to develop or redevelop land, and to disposals by their successor bodies. In such cases, land would only be subject to the rules where it was without development potential and, therefore, genuinely surplus in relation to the purpose for which it was originally acquired.

4. The rules are also commended to bodies in the private sector to which public sector land holdings have been transferred eg on privatisation. The departments concerned will pursue with these bodies how the rules might be applied. The rules, however, are not relevant to land in England and Wales transferred to the National Rivers Authority or to the water and sewerage service companies in consequence of the Water Act 1989 or subsequently acquired by them compulsorily. Such land is governed by a special set of statutory restrictions on disposal under section 157 of the Water Resources Act 1991 and section 156 of the Water Industry Act 1991 and the consents or authorisations given by the relevant Secretary of State under those provisions.

the land to which the rules apply

5. The rules apply to all land if it was acquired by or under threat of compulsion. A threat of compulsion will be assumed in the case of a voluntary sale if power to acquire the land compulsorily existed at the time unless the land was publicly or privately offered for sale immediately before the negotiations for acquisition.

6. The rules also apply to land acquired under the blight provisions: in England and Wales, Chapter II in Part VI of, and Schedule 13 to, the Town and Country Planning Act 1990; and, in Scotland, section 182 of the Town and Country Planning (Scotland) Act 1972, as amended by Part V of the Land Compensation (Scotland) Act 1973. The rules do not apply to land acquired by agreement in advance of any liability under these provisions.

7. The rules apply to all freehold disposals (in Scotland, outright sales).

8. Disposal of land acquired under the Small Landholders (Scotland) Acts 1886 to 1931 for land settlement purposes is regulated by statutory provisions. If land is not required for sale to sitting tenants it has to be offered back to the original owner, or his or her successor in title, at a price to be determined, failing agreement, by the Scottish Land Court. Arrangements for such disposals must comply with the statutory provisions which are, generally, more onerous than these rules.

the general rules

9. Where a department wishes to dispose of land to which the rules apply, former owners will, as a general rule, be given a first opportunity to repurchase the land previously in their ownership, provided that it has not been materially changed in character since acquisition. The character of land may be considered to have "materially changed" where, for example, houses have been erected on agricultural land; mainly open land has been afforested; offices have been built on an urban site; or where substantial works to an existing building have effectively altered its character. The erection of temporary buildings on land, however, is not necessarily a material change. When deciding whether any works have materially altered the character of land, the disposing department should consider the likely cost of restoring the land to its original use.

10. Where only part of the land for disposal has been materially changed in character, the general obligation to offer back will apply only to the part that has not been changed.

interests qualifying for offer-back

11. Land will normally be offered back to the former freeholder. If the land was subject to a long lease and there remains a significant unexpired term (say 21 years, or more), departments may, at their discretion, offer the freehold to the former leaseholder. In Scotland, however, land will always be offered back to the former owner.

12. In these rules "former owner" may, according to the circumstances, mean former freeholder or former long leaseholder, and his or her successor. "Successor" means the person on whom the property, had it not been acquired, would clearly have devolved under the former owner's will or intestacy; and may include any person who has succeeded, otherwise than by purchase, to adjoining land from which the land was severed by that acquisition.

time horizon for obligation to offer-back

13. The general obligation to offer back will not apply to the following types of land:

i. agricultural land acquired before 1 January 1935;

ii. agricultural land acquired after 30 October 1992 which becomes surplus, and available for disposal more than 25 years after the date of acquisition;

iii. non-agricultural land which becomes surplus, and available for disposal more than 25 years after the date of acquisition.

The date of acquisition is the date of the conveyance, or transfer.

exceptions from the obligation to offer-back

14. The following are exceptions to the general obligation to offer back:-

1. Where it is decided on specific Ministerial authority that the land is needed by another department ie that it is not, in a wider sense, surplus to Government requirements.

2. Where, in very exceptional cases, it is decided on specific Ministerial authority that for strong and urgent reasons of public interest the land should be disposed of as soon as practicable to a local authority or other body with compulsory purchase powers.

3. Where small areas of agricultural land would have no satisfactory agricultural use, even when used in conjunction with other agricultural land already in possession of the former owner.

4. Where it would be mutually advantageous to the department and an adjoining owner to effect minor adjustments in boundaries through an exchange of land.

5. Where it would be inconsistent with the purpose of the original acquisition to offer the land back; as, for example, in the case of -

i. land acquired under sections 16, 84 or 85 of the Agricultural Act 1947; or under sections 31 or 57 of the Agricultural (Scotland) Act 1948;

ii. land which was acquired under the Distribution of Industry Acts or the Local Employment Acts, or under any legislation amending or replacing those Acts, and which is resold for private industrial use.

6. Where the disposal is in execution of Government policies for the transfer to the private sector of the functions of providing particular services.

7. Where a disposal is in respect of either -

i. a site for development or redevelopment which comprises 2 or more previous land holdings; or

ii. a site which consists partly of land which has been materially changed in character and part which has not

and there is a risk of a fragmented sale of such a site realising substantially less than the best price that can reasonably be obtained for the site as a whole ie its market value. In such cases, however, any former owner who has remained in continuous occupation of the whole or part of his or her former property (by virtue of tenancy or licence) will be given a right of first refusal of that property or part of property, as the case may be. In the case of land to which i. above applies, special consideration will be given where a consortium of former owners has indicated a wish to purchase the land collectively.

8. Where the market value of land is so uncertain that clawback provisions would be insufficient to safeguard the public purse and where competitive sale is advised by the department's professionally qualified appointed valuer and specifically agreed by the responsible Minister.

15. In the case of a tenanted house, any pre-emptive right of the former owner is subject to the prior right of the tenant. See paragraph 16 below.

house tenancies

16. Where a house, whether acquired compulsorily or under statutory blight provisions, has a sitting tenant at the time of the proposed disposal, the freehold should first be offered to the tenant. If the tenant declines to purchase the freehold, it should then be offered to the former owner, although this may be subject to the tenant's continued occupation. This paragraph does not apply where a house with associated land is being sold as an agricultural unit; or where a house was acquired with associated agricultural land but is being sold in advance of that land.

procedures for disposal

17. Where it is decided that property to be disposed of is, by virtue of these rules, subject to the obligation to offer back, departments should follow the appropriate procedures described in paragraphs 18-23 below.

Where former owner's address is known

18. Where the address of a former owner is known, a recorded delivery letter will be sent by or on behalf of the disposing department, inviting the former owner to buy the property at the valuation made by the department's professionally qualified, appointed valuer. The former owner will be given 2 months from the date of that letter to indicate an intention to purchase. Where there is no response or the former owner does not wish to purchase the property, it will be sold on the open market and the former owner will be informed that this step is being taken. If the former owner wishes to purchase the land there will be a further period of 2 months to agree terms, other than value, from the date of an invitation made by or on behalf of the disposing department. After these terms are agreed, there will be 6 weeks to negotiate the price. If the price or other terms cannot be agreed within these periods, or within such extended periods as may reasonably be allowed (eg to negotiate appropriate clawback provisions), the property will be disposed of on the open market.

Where address is unknown

19. Where the former owner is not readily traceable the disposing department will contact the solicitor or agent who acted for him or her in the original transaction. If a present address is then ascertained the procedure described in paragraph 18 above should be followed. If the address is not ascertained, however, the department will attempt to contact the former owner by advertisement, as set out in paragraph 20 below, informing the solicitor or agent that this has been done.

20. Advertisements inviting the former owner to contact the disposing department will be placed as follows:

a. for all land (including houses), in not less than 2 issues of at least one local newspaper;
b. for all land, other than houses, in the London or Edinburgh Gazette and in the Estates Gazette;
c. for agricultural land -
in the Farmer's Weekly (England and Wales);
in the Scottish Farmer (Scotland).

Responses to invitation to purchase where address unknown

21. Where no intention to purchase is indicated by or on behalf of a former owner within 2 months of the date of the latest advertisement which is published as described in paragraph 20 above, the land will be disposed of on the open market.

22. Where an intention to purchase is expressed by or on behalf of a former owner within 2 months of the date of the latest advertisement, he or she will be invited to negotiate terms and agree and price within the further periods, as may reasonably be extended, which are described in paragraph 18 above. If there is no agreement, the property will be disposed of on the open market.

Special procedure where boundaries of agricultural land have been obliterated

23. The procedures described in the Annex to these rules should be followed where changes, such as the obliteration of boundaries, prevent land which is still predominantly agricultural in character from being sold back as agricultural land in its original parcels.

terms of resale

24. Disposals to former owners under these arrangements will be at current market value, as determined by the disposing department's professionally qualified, appointed valuer. There can be no common practice in relation to sales to sitting tenants because of the diversity of interests for which housing is held. Departments will, nonetheless, have regard to the terms set out in the Housing Act 1985 and the Housing (Scotland) Act 1987, as amended, under which local authorities are obliged to sell houses to tenants with the right to buy.

25. As a general rule, departments should obtain planning consent before disposing of properties which have potential for development. But where it would not be practicable or appropriate for departments to take action to establish the planning position at the time of disposal; or where it seems that the likelihood of obtaining planning permission (including a more valuable permission) is not adequately reflected in the current market value, the terms of sale should include clawback provisions in order to fulfil the Government's obligation to the taxpayer to obtain the best price. The precise terms of clawback will be a matter for negotiation in each case.

financial and manpower implications for local authorities

26. Local authority disposals are carried out under a number of different statutory powers, some of which require authorities to obtain consent for a particular type of transaction; for example, a disposal under section 123 of the Local Government Act 1972 or section 74 of the Local Government (Scotland) Act 1973 for less than the best consideration that can reasonably be obtained. Where local land values for the type of property in question are reasonably stable, it should not be difficult for authorities to offer land back at its current market value, as described in these rules, and comply with the statutory requirement to dispose of land for the best consideration that can reasonably be obtained. They may, of course, seek consent to dispose for less.

1984 rules

27. Paragraph 3 of, and Part Ill of the memorandum accompanying, Circular 21/84 are superseded by the rules set out in this circular.

further information

28. Enquiries about the contents of this circular should be addressed to Mr Keith Main (031-244 4209). Further copies and a list of current planning circulars may be obtained from Room 6/84, New St Andrew's House, Edinburgh, EH1 3SZ.

Annex (see paragraph 23)

Special procedures where boundaries of agricultural land have been obliterated

a. Each former owner will be asked whether he or she wishes to acquire any land.

b. Where former owners express interest in doing so, disposing departments will, subject to what is stated in c. to e. below, make every effort to offer them parcels which correspond, as nearly as is reasonably practicable, in size and situation to their former land.

c. In large and complex cases, or where there is little or no room for choice between different methods of dividing the land into lots, it may be necessary to show former owners a plan indicating definite lots. This might be appropriate where, for example, the character of the land has altered; where there are existing tenancies; or where departments might otherwise be left with unsaleable lots.

d. Where more than one former owner is interested in the same parcel of land it may be necessary to give priority to the person who owned most of the parcel; or, in the case of near equality, to ask for tenders from interested former owners. Departments should, however, make every effort to offer each interested former owner at least one lot.

e. If attempts to come to a satisfactory solution by dealing with former owners end in complete deadlock, departments will sell the land by public auction in the most convenient parcels and will inform the former owners of the date of the auction sale.