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Compulsory purchase - overview
Public bodies, such as local planning authorities, highway authorities, utilities companies and regeneration agencies, have compulsory purchase powers to enable them to carry out their statutory functions. The most common powers used to facilitate development are those of local planning authorities. They are conferred by the Town and Country Planning Act 1990, s 226 as amended by the Planning and Compulsory Purchase Act 2004. Compulsory purchase powers should be used only where there is no prospect of acquiring land by agreement, and must not be used unless the acquiring authority can show that development will promote or improve the economic, social or environmental well-being of the area.
The acquiring authority must ensure that it is fully prepared before it exercises its compulsory purchase powers. It has to show a compelling case in the public interest to justify their use and must:
have all necessary authority from relevant committees
be able to show that the development can be delivered (often in partnership with a private sector developer)
The acquiring authority must also be sure, before it commences the compulsory purchase order (CPO) process, that it would be unable to acquire the land by agreement. It should also consider whether the land could be acquired under other provisions, such as landlord and tenant powers, although Government guidance acknowledges that the two processes may be run in parallel.
The acquiring authority must identify all the interests in the land subject to the CPO. It may use its powers under either the Acquisition of Land Act 1981 or the Local Government (Miscellaneous Provisions) Act 1976 to require people to provide information on their property interests. This information is used to prepare the CPO, the CPO plan and the schedule (which identifies all those affected by the CPO) in line with the statutory requirements set out in the Compulsory Purchase of Land (Prescribed Forms) (Ministers) Regulations 2004 and the guidance contained in appendix U of ODPM Circular 06/2004.
This process identifies any types of land that cannot be compulsorily purchased or will require a special procedure for acquisition. A statement of reasons also needs to be prepared at this stage. This sets out the policy and reasoning that support the use of compulsory purchase powers. The acquiring authority must then:
serve notices on those affected by the CPO
post site notices and place advertisements advising of the CPO in a local newspaper for two weeks
The CPO and accompanying documents are then sent to the relevant secretary of state (SoS). For planning-based CPOs, this is the SoS for communities and local government.
Those affected by a CPO have the right to lodge an objection with the SoS within a specified time. If objections are made and cannot be resolved, the SoS will order a public inquiry with an independent inspector appointed by the Planning Inspectorate. The acquiring authority must prepare a statement of case setting out the reasons for confirming the CPO and addressing the objectors' concerns. It is also expected to negotiate with objectors before the inquiry date in an attempt to resolve their concerns. Following the public inquiry, the inspector will report to the SoS, setting out the arguments made and making a recommendation:
to confirm the CPO
to confirm it in part, or
to reject it
If the CPO is confirmed, the acquiring authority must serve notice on all those affected by it. This includes further site notices and newspaper advertisements. Service begins a six-week period during which the confirmation can be legally challenged on limited grounds.
The acquiring authority can either use a general vesting declaration (GVD) or the notice to treat (NTT) procedure. The decision will depend on a number of factors, including:
the types of interests to be acquired
the requirement for immediate ownership of the land
Following a GVD or NTT, the acquiring authority can take possession of the land described in the confirmed CPO. On the designated day the owners and occupiers of the property must vacate and hand it over to the acquiring authority.
Those whose property interests are affected by the CPO have a right to compensation. Compensation will include:
the market value of the property interest
compensation for a reduction in value of any retained land
reimbursement for the costs of moving from the land
various statutory loss payments
any other losses, including reasonable professional fees in respect of the negotiation and settlement of compensation
The acquiring authority is obliged to make advance payments of compensation if it enters onto the land before compensation has been agreed. If the amount of compensation cannot be agreed, the issue may be referred to the Lands Tribunal for determination. There is also increasing use of alternative dispute resolution processes, such as arbitration and, where appropriate, expert determination.
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