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25.0 COMPULSORY PURCHASE AND COMPENSATION:
The Compulsory Purchase Policy Review Advisory Group (CPPRAG), in its report Fundamental Review of the Laws and Procedures Relating to Compulsory Purchase and Compensation: Final Report (DETR, 2000), concluded that the current compulsory purchase and compensation arrangements in England and Wales are basically sound, with adequate safeguards for human rights. However, the Group considered the legislative base to be 'convoluted and complex' and recommended simplification and codification in up-to-date language. The Group also made a number of detailed recommendations for reform of the law. A similar recommendation regarding simplification and codification was made by a Scottish study published around the same time ( Review of Compulsory Purchase and Land Compensation, I Murning, Dundas & Wilson and Montagu Evans, SECRU, 2001). Many of the detailed recommendations by CPPRAG were accepted by the Government and are currently the subject of consideration and consultation by the (English) Law Commission ( Towards a Compulsory Purchase Code: (1) Compensation, Consultation Paper No 165, 2002; and Towards a Compulsory Purchase Code: (2) Procedure, Consultation Paper No 169, 2002). It would seem to be premature to bring forward proposals in this area for consideration for detailed reform until the Law Commission have reported the outcome of their review and consultation exercise. Such proposals could be built in to the discussion on the content of a Bill once they are available.
In the meantime, the Government have decided to take forward immediately in England and Wales 2 of CPPRAG's recommendations and these have been included in the Planning and Compulsory Purchase Bill. These are considered in turn.
25.1 The acquisition of land for development
Proposal: The power to acquire land for purposes linked to regeneration should be made clear.
Source: CPPRAG, Interim Report, DETR, 1999; also Final Report, paras.29-39; Compulsory Purchase and Compensation: Delivering a Fundamental Change, DTLR, 2002, Appendix, paras.1.5-1.9; Planning and Compulsory Purchase Bill, Clause 73.
Present position: CPPRAG considered that s.226 of the English Planning Act (equivalent to s.189 of the 1997 Scottish Act) conferred wide ranging powers to acquire land compulsorily for 'development, redevelopment or improvement' and for 'the proper planning of their area' and that these powers had been used successfully by some authorities to promote urban regeneration. They went on to conclude, however, that "local authorities generally remain nervous or indifferent towards the use of their compulsory purchase powers for regeneration purposes" and that authorities would be unable to use the power in the absence of a specific and tangible purpose. In view of this, the DTLR proposed to make a "radical change" in new legislation by replacing the powers in s.226 by a new provision which would "define a full range of planning and regeneration purposes".
The proposal in more detail: In fact, the Bill does not replace s.226; it amends it by linking the exercise of the power explicitly to the promotion or improvement of the economic, social or environmental well-being of their area. It also removes the requirement to have regard in exercising the power to the provisions of the development plan, so far as material, and to any other material consideration.
Implementation: An amendment to s.189 of the 1997 Act would be required. This might be linked to the recommendation in the Scottish Study that Scottish Ministers should issue a clear policy statement on the use of compulsory purchase powers (a revision to SDD 42/76) (para.6.11).
Discussion:
- the doubts about the inadequacy of compulsory purchase powers to tackle regeneration, which Ministers requested CPPRAG to examine, have not been expressed in Scotland; but then the Scottish study found only limited use by local authorities of compulsory purchase powers generally. Clarification would probably be helpful but would not seem to be urgent.
25.2 Allowance for the compulsory nature of the acquisition
Proposal: All those who have had land compulsorily taken from them should receive an additional payment in recognition of that fact.
Source: CPPRAG, Final Report, paras.86-97; Compulsory Purchase and Compensation: Delivering a Fundamental Change, DTLR, 2002, paras.3.16-3.19, Planning and Compulsory Purchase Bill, Clauses 74-77.
Present position: Under ss.27-30 of the Land Compensation (Scotland) Act 1973 a home loss payment is made, in addition to market value compensation and disturbance, to owner-occupiers or tenants of residential property who are displaced from their homes as a result of compulsory acquisition. It is an arbitrary payment which is intended to reflect the uncompensated losses such as attachment to home, ties with the area, personal distress and upset and so on, which residential occupiers face on dispossession. For owner-occupiers it is based on 10% of the market value of the interest but with a maximum (at present) of 15,000 and a minimum of 1,500. For displaced tenants, the home loss payment is a flat rate of 1,500. Sections 31-33 provide also for a 'farm loss payment' to assist farmers to resettle on unfamiliar land following dispossession.
The proposal in more detail: Clauses 74-77 of the Planning and Compulsory Purchase Bill retain the home loss payment for residential occupants but add a similar arbitrary 'basic loss payment' for other owners and occupiers not presently entitled to a home loss payment (eg residential landlords and occupiers of business premises). For both owners and tenants it would be based on a percentage of market value (7.5%) with a stated maximum (75,000). In addition, an 'occupier's loss payment', assessed on 2.5% of the value of the interest or on a formula based on the area of property but in either case with a maximum of 25,000, would be paid to a person who has been in occupation of the premises for at least a year. Separate arrangements are made to replace the farm loss payment with an 'occupier's loss payment' for agricultural land.
Discussion:
- the proposal recognises what research has shown: that it is not just residential occupants who face uncompensated losses on dispossession. The inducement represented by the payment under this proposal is intended to encourage the co-operation of owners and occupiers in land assembly projects involving the potential use of compulsory purchase powers. It is probably for this reason that the CBI is supporting the proposal in England. Whether it will provide the necessary encouragement is a matter for conjecture. But it should provide a modest recognition of the unsettling effect of the exercise of compulsory powers and of the stress that it imposes on those who are displaced.
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