Part 9: Compulsory Purchase Compensation Section 190: Power to require prospects of planning permission to be ignored Effect
Subsection (1) of section 190 amends the 1981 Act. Subsection (1)(a) amends section 7(3) of the 1981 Act to provide that any regulations made under new section 15A(11) of that Act to provide a definition of affordable housing will be subject to the negative procedure. Subsection (1)(b) makes a consequential amendment to section 14A of the 1981 Act arising from the ability for the Secretary of State, or the Welsh Ministers, to confirm (under new section 15A of the 1981 Act) a CPO with a direction that the prospects of planning permission are to be ignored when the assessment of compulsory purchase compensation for the value of land is undertaken. The effect of this consequential amendment is acquiring authorities are unable to use the power under section 14A of the 1981 Act to confirm their own CPOs which contain directions, regardless of whether there are objections to the CPOs or not.
	Subsection (1)(c) inserts new section 15A into the 1981 Act which makes the following provisions:
New subsection 15A(1) sets out that an acquiring authority may include in a CPO a direction that the prospects of planning permission are to be ignored when compulsory purchase compensation is assessed providing the power which is enabling the CPO to be made is listed in new Schedule 2A to the 1981 Act. New subsection 15A(2) provides that if a direction is included in a CPO, compensation is to be assessed in accordance with new section 14A of the 1961 Act.
New subsection 15A(3) explains an acquiring authority must submit a statement of commitments with a CPO which includes a direction that compensation is to be assessed in accordance with section 14A of the 1961 Act. New subsection 15A(4) sets out that a ‘statement of commitments’ is a statement of the acquiring authority’s intentions as to what it will do with the land included in the CPO should the CPO proceed. It is these intentions which the acquiring authority will rely on to justify that the direction is in the public interest.
New subsection 15A(5) provides if the power enabling the CPO to be made is listed in paragraphs 1 to 6 of new Schedule 2A to the 1981 Act and authorises the acquisition for a purpose which includes housing, the acquiring authority’s statement of commitments must demonstrate provision of affordable housing will be provided.
New subsection 15A(6) provides the notice required to be served under section 12(1)(a) of the 1981 Act must:
include a statement of the effect of the direction i.e. that the assessment of compulsory purchase compensation cannot take account of the prospects of planning permission being granted on the land which means the assessment may not take account of either:
of the prospect of appropriate alternative development being established, or
the prospect of planning permission being granted for other development on or after the relevant valuation date;
name a place within the locality where a copy of the statement of commitments may be viewed; and
specify a website on which a copy of the statement of commitments may be viewed.
New subsections 15A(7) – (8) explain the Secretary of State, or the Welsh Ministers, may allow an acquiring authority to amend its statement of commitments before a CPO with a direction is confirmed but only if:
the amendment would not be unfair to any person who made or could have made an objection to the CPO, and
where the power enabling the CPO to be made authorises an acquisition for a purpose which includes housing, only if the acquiring authority’s intentions continue to include the provision of affordable housing.
New subsection 15A(9) provides the Secretary of State, or the Welsh Ministers, may only confirm a CPO which includes a direction that compensation is to be assessed in accordance with section 14A of 1961 Act if they are satisfied the direction is justified in the public interest. If the Secretary of State, or the Welsh Ministers, is not satisfied the direction is justified in the public interest, they may decide not to confirm the CPO or, if they do decide to confirm the CPO, they must modify the CPO to remove the direction.
New subsection 15A(10) specifies where the Secretary of State, or the Welsh Ministers, have confirmed a CPO which includes a direction that compensation is to be assessed in accordance with section 14A of the 1961 Act, the confirmation notice required to be served under section 15 of the 1981 Act must provide the following information:
a statement on the effect of the direction;
explain how the acquiring authority’s statement of commitments may be viewed; and
explain additional compensation may be payable if the acquiring authority does not fulfil its statement of commitments.
New subsection 15A(11) provides definitions for terms in new section 15A of the 1981 Act.
	Subsection (1)(d) inserts new Schedule 2A in the 1981 Act. New Schedule 2A provides a list of CPO-making powers which directions may be sought on. The list of CPO-making powers contains three types:
acquisitions for purposes which include housing;
acquisitions for purposes of the National Health Service; and
acquisitions for educational purposes.
	Subsection (2) of section 190 amends the 1961 Act. Subsection (2)(a) inserts new section 14A into the 1961 Act which makes the following provisions:
New subsection 14A(1) makes clear the provisions under section 14A of the 1961 Act are to apply where a CPO has been confirmed and includes a direction that compensation is to be assessed in accordance with section 14A of the Land Compensation Act 1961.
New subsection 14A(2) disapplies section 14 of the 1961 Act. The effect of which means that section 14 cannot be taken into account when the value of the land is assessed for compensation purposes where a CPO includes a direction.
New subsection 14A(3) provides that when the value of the land is assessed for compensation purposes where a CPO includes a direction, it is to be assumed that no planning permission would be granted on the relevant valuation date or on a date in the future for development on the land (whether on that land alone or together with other land) except for those types of development provided under new subsections 14(A)(4) – (5) of the 1961 Act. This means value attributable to the following type of development cannot be claimed in compensation:
the prospect of planning permission being granted on the land for appropriate alternative development; or
the prospect of planning permission being granted on the land for any other use which has a higher value than the existing use.
New subsections 14A(4) – (5) provide that when the value of the land is assessed for compensation purposes where a CPO includes a direction, the following may be taken into account:
an existing planning permission on the land i.e. a permission that has been granted and is in force on the relevant valuation date; or
the prosect of planning permission being granted on or after the relevant valuation date for the conversion of a single dwelling into a two or more separate dwellings on the land included in the CPO.
New subsection 14A(6) introduces new Schedule 2A to the 1961 Act which allows for the payment of additional compensation in certain circumstances to persons whose interest in land was acquired via a CPO which included a direction that compensation was to be assessed in accordance with section 14A of the 1961 Act.
	Subsection 2(b) of section 190 inserts new subsection (3) in section 32 of the 1961 Act. The effect of this is to disapply the section 32 of the 1961 Act provision which provides for the applicable rate of interest on compensation where entry on land has been made before compensation has been paid to a person. Instead, regulations made under paragraph 7 of new Schedule 2A to the 1961 Act may set out how interest is to be applied when additional compensation is to be paid.
	Subsection 2(c) of section 190 inserts new Schedule 2A into the 1961 Act which makes the following provisions:
Paragraph 1(1) of new Schedule 2A provides that paragraph 1 applies where land has been compulsorily acquired further to a CPO which includes a direction that compensation is to be assessed in accordance with section 14A of the 1961 Act.
Paragraph 1(2) provides the Secretary of State, or the Welsh Ministers, are required to make a direction for the payment of additional compensation by the acquiring authority who made the CPO which included a direction that compensation was to be assessed in accordance with section 14A of the 1961 Act where it appears to the Secretary of State, or the Welsh Ministers, that:
the conditions in sub-paragraph 1(3) have been met, and
an application for a direction for the payment of additional compensation has been made by a person whose interest in land was acquired via a CPO which included a direction that compensation was to be assessed in accordance with section 14A of the 1961 Act.
Paragraph 1(3) of new Schedule 2A outlines the conditions which must be satisfied before the Secretary of State, or the Welsh Ministers, can make a direction for the payment of additional compensation. The conditions are:
the use of the land by the acquiring authority following its acquisition is not materially in accordance with the authority’s statement of commitments;
either-
10 years have passed since the CPO which included the direction that compensation was to be assessed in accordance with section 14A of the 1961 Act became operative i.e. the date on which notice of the confirmation of the CPO was first published, or
there is no realistic prospect of the acquiring authority’s statement of commitments being fulfilled within that period of time; and
the Secretary of State, or the Welsh Ministers, would not have confirmed the CPO with the inclusion of the direction that compensation was to be assessed in accordance with section 14A of the 1961 Act on the basis of the use of the land by the acquiring authority following its acquisition.
Paragraph 1(4) of new Schedule 2A provides definitions for terms in paragraph 1(3) of new Schedule 2A.
Paragraph 1(5) of new Schedule 2A sets out the effect of a direction for additional compensation. That being where the Secretary of State, or the Welsh Ministers, make a direction for the payment of additional compensation, those eligible ("eligible persons") may make a claim to the acquiring authority for additional compensation relating to the original value of their interest.
Paragraph 1(6) of new Schedule 2A provides a definition of "eligible persons" for Schedule 2A and references paragraph 4(1) of new Schedule 2A which provides for eligibility where the land was subject to a mortgage.
Paragraph 2(1) of new Schedule 2A sets out additional compensation is only payable to an eligible person if, in respect of the acquisition of their interest in land, the amount of compensation that would have been assessed had section 14 of the 1961 Act applied ("the alternative amount") is greater than the amount of compensation which was awarded or agreed as a result of the direction which applied section 14A of the 1961 Act ("the original amount").
Paragraph 2(2) of new Schedule 2A provides where the alternative amount of compensation is greater than the original amount of compensation, additional compensation is payable and the amount payable will be the difference between the two amounts.
Paragraph 2(3) of new Schedule 2A provides a definition of the "original amount".
Paragraph 2(4) of new Schedule 2A provides a definition of the "alternative amount". The effect of which means the alternative amount may be assessed by taking account of the value associated with:
the planning certainty of appropriate alternative development being established on the land through the granting of a Certificate of Appropriate Alternative Development (CAAD) under section 17 or 18 of the 1961 Act, or
the prospect of planning permission being granted for other development on the land on or after the relevant valuation date under section 14(2)(b) of the 1961 Act.
Paragraph 2(5) of new Schedule 2A provides for what the relevant valuation date should be, for the purposes of assessing the alternative amount, where the original amount of compensation was agreed: the date on which the original agreement was concluded.
Paragraph 2(6) of new Schedule 2A sets out that when determining the amount of additional compensation under Schedule 2A, the reference in section 17(2)(b) of the 1961 Act to the amount of compensation is to apply as if that reference were to the amount of additional compensation. The effect of this is when determining additional compensation, no application for a CAAD may be made if a reference has been made to the Upper Tribunal to determine the amount of additional compensation, except with the consent of the Upper Tribunal.
Paragraph 2(7) of new Schedule 2A provides that where a CAAD is granted after the original amount of compensation has been awarded or agreed, for the purposes of assessing the alternative amount of compensation, the granting of the CAAD is to have effect as if this decision had taken place before the assessment of the alternative amount. The practical effect of this is to ensure a CAAD may be applied for after the original amount of compensation has been agreed or awarded following a reference to the Upper Tribunal so it may be taken into account in the assessment of the alternative amount of compensation.
Paragraph 2(8) of new Schedule 2A provides compensation attributable to disturbance, severance or injurious affection heads of claim may not to be taken into account when calculating the original and alternative amounts of compensation.
Paragraph 3 of new Schedule 2A provides a time limit for the making of an application for a direction for additional compensation. The effect of which is an application for a direction for additional compensation may not be made 13 years after the date on which the CPO which included the direction that compensation was to be assessed in accordance with section 14A of the 1961 Act became operative i.e. the date on which notice of the confirmation of the CPO was first published. See section 26 of the 1981 Act for provisions as to operative dates for CPOs governed by that Act.
Paragraph 4, sub-paragraphs (1) – (6) of new Schedule 2A relate to mortgages. Sub-paragraph (1) provides a person who had an interest in land compulsory acquired via a CPO which included a direction that compensation was to be assessed in accordance with section 14A of the 1961 Act but was subject to a mortgage is entitled to make an application for a direction for the payment of additional compensation.
Paragraph 4(2) of new Schedule 2A provides that the existence of a mortgage is to be taken into account for the purpose of determining both the original and additional compensation amounts. So where an amount was paid to a mortgage provider under section 15 or 16 of the Compulsory Purchase Act 1965 (which provided for where the mortgage debt exceeded the value of the mortgage land) as a result of a CPO which included a direction that compensation was to be assessed in accordance with section 14A of the 1961 Act, for the purposes of the payment of additional compensation, this amount is to be considered as forming part of the original amount of compensation.
Paragraph 4(3) of new Schedule 2A further sets out that the reference in sub- paragraph (2) to an amount paid under section 15 or 16 of the Compulsory Purchase Act 1965 also includes any advance payment of compensation to a mortgage provider made under sections 52ZA or 52ZB of the Land Compensation Act 1973.
Paragraph 4(4) of new Schedule 2A provides where additional compensation is payable to a mortgage provider, it must be put towards discharging any outstanding loans secured by the mortgage on the relevant land or property. Paragraph 4(5) of new Schedule 2A sets out that if there is no outstanding loan secured by the mortgage, the additional compensation is payable to the mortgagor (the person who held the mortgaged land). Paragraph 4(6) of new Schedule 2A explains if the additional compensation payable to a mortgage provider exceeds the outstanding loans secured by the mortgage, the excess amount is payable to the mortgagor (the person who held the mortgaged land).
Paragraph 5, sub-paragraphs(1) – (6) of new Schedule 2A allow a successor-in-title of a person who had an interest in land compulsory acquired via a CPO which included a direction that compensation was to be assessed in accordance with section 14A of the 1961 Act to make an application for a direction for additional compensation under Schedule 2A.
Paragraph 6(1) of new Schedule 2A enables the Secretary of State, or the Welsh Ministers, to make regulations to allow the payment of additional compensation for consequential, qualifying losses. Sub-paragraph (2) provides a definition of "qualifying losses". Sub-paragraph (3) applies that definition to compensation which was payable to mortgage providers. Sub-paragraph (4) explains the scope of regulations which may be made under sub-paragraph 6 of new Schedule 2A.
Paragraph 7(1) of new Schedule 2A explains regulations may be made to set out procedures for:
how an application for a direction for additional compensation under new Schedule 2A to the 1961 Act may be made;
how claims for additional compensation may be submitted;
the publicity requirements for giving notice of the making of a direction for additional compensation;
the payment of interest on additional compensation; and
procedures for how and when additional compensation (and interest) should be paid.
Paragraph 7(2) of new Schedule 2A disapplies section 4 of the 1961 Act (recovery of costs) in relation to additional compensation claims. It enables regulations under paragraph 7 to: modify or disapply section 29 of the Tribunals, Courts and Enforcement Act 2007 (costs and expenses) or the Tribunal Procedure Rules relating to costs; or apply (including with modifications) section 4 of the Land Compensation Act 1961 (costs proceedings).
Paragraph 8 of new Schedule 2A, sub-paragraphs (1) – (4) explain who may make regulations under new Schedule 2A, what the regulations may do, and the applicable procedure for regulations made by the Secretary of State or the Welsh Ministers.
Paragraph 9 of new Schedule 2A, sub-paragraphs (1) – (4) set out matters of interpretation and application in connection with new Schedule 2A and its interaction with provisions in related primary legislation.
	Subsection (3) of section 190 amends the New Towns Act 1981 to make similar provisions to those made to the 1981 Act by subsections (1)(c) and (d) as described above. Subsection (3)(a) inserts new paragraph 5A into Schedule 4 to the New Towns Act 1981 which makes the following provisions:
Paragraph 5A(1) allows a new town development corporation, when submitting a CPO for confirmation under Part 1 of Schedule 4 to the New Towns Act 1981, to include in the order a direction that compensation is to be assessed in accordance with section 14A of the 1961 Act.
Paragraph 5A(2) requires a new town development corporation to submit a statement of commitments with a CPO which includes a direction that compensation is to be assessed in accordance with section 14A of the 1961 Act. Paragraph 5A(3) defines a ‘statement of commitments’ as a statement of the new town development corporation’s intentions as to what it will do with the land included in the CPO should the CPO be confirmed. It is these intentions which the development corporation will rely on to justify that the direction is in the public interest. Paragraph 5A(4) makes it a condition that the development corporation’s intentions must include provision of affordable housing.
Paragraph 5A(5) provides the notice required under paragraph 2(1) in Schedule 4 to the New Towns Act 1981 must:
include a statement of the effect of the direction i.e. that the assessment of compulsory purchase compensation cannot take account of the prospects of planning permission being granted on the land which means the assessment may not take account of either:
the prospect of appropriate alternative development being established on the land, or
the prospect of planning permission being granted for other development on or after the relevant valuation date;
name a place within the locality where a copy of the statement of commitments may be viewed.
Paragraphs 5A(6) – (7) explain the Secretary of State, or the Welsh Ministers, may allow a new town development corporation to amend its statement of commitments before a CPO with a direction is confirmed only if:
the amendment would not be unfair to any person who made or could have made an objection to the CPO, and
the development corporation’s intentions continue to include the provision of affordable housing.
Paragraph 5A(8) provides the Secretary of State, or the Welsh Ministers, may only confirm a CPO which includes a direction that compensation is to be assessed in accordance with section 14A of the 1961 Act if they are satisfied the direction is justified in the public interest. If the Secretary of State, or the Welsh Ministers, is not satisfied the direction is justified in the public interest, they may decide not to confirm the CPO or, if they do decide to confirm the CPO, they must modify the CPO to remove the direction.
Paragraph 5A(9) specifies where the Secretary of State, or the Welsh Ministers, has confirmed a CPO which includes a direction that compensation is to be assessed in accordance with section 14A of the 1961 Act, the notice required to be served under paragraph 5 in Schedule 4 to the New Towns Act 1981 must provide the following information:
a statement on the effect of the direction;
an explanation of how the new town development corporation’s statement of commitments may be viewed; and
an explanation that additional compensation may become payable if the development corporation does not fulfil its statement of commitments.
Paragraph 5A(10) provides definitions for terms in new paragraph 5A in Schedule 4 to the New Towns Act 1981.
	Subsection (3)(b) of section 190 inserts new paragraph 5A in Schedule 5 to the New Towns Act 1981. This makes similar amendments to Schedule 5, which sets out the procedure for the compulsory acquisition of statutory undertakers’ land, as were made to Schedule 4 to the New Towns Act 1981by subsection 3(a) above. It makes the following provisions:
Paragraph 5A(1) allows a new town development corporation, when making an application under Part 1 of Schedule 5 to the New Towns Act 1981, to include in the application a request for a direction that compensation is to be assessed in accordance with section 14A of the 1961 Act. It also explains the provisions of new paragraph 5A will apply if the development corporation makes such an application.
Paragraph 5A(2) requires a new town development corporation to submit a statement of commitments with its application which includes a request for a direction that compensation is to be assessed in accordance with section 14A of the 1961 Act. Sub-paragraph 5A(3) defines a ‘statement of commitments’ as a statement of the new town development corporation’s intentions as to what it will do with the land should the acquisition proceed. It is these intentions which the development corporation will rely on to justify that the direction is in the public interest. Paragraph 5A(4) makes it a condition that the development corporation’s intentions must include provision of affordable housing.
Paragraph 5A(5) provides the notice required under paragraph 2 of Schedule 5 to the New Towns Act 1981 must:
state a request for a direction that compensation is to be assessed in accordance with section 14A of the 1961 Act has been made;
state the effect of the direction i.e. that the assessment of compulsory purchase compensation cannot take account of the prospects of planning permission being granted on the land which means the assessment may not take account of either:
the prospect of appropriate alternative development being established on the land, or
the prospect of planning permission being granted for other development on or after the relevant valuation date;
name a place within the locality where a copy of the statement of commitments may be viewed.
Paragraph 5A, sub-paragraphs (6) – (7) explain the Secretary of State, or the Welsh Ministers, and the appropriate Minister may allow a new town development corporation to amend its statement of commitments before a direction is made on the application only if:
the amendment would not be unfair to any person who made or could have made an objection to the application, and
the development corporation’s intentions continue to include the provision of affordable housing.
Paragraph 5A(8) provides the Secretary of State, or the Welsh Ministers, and the appropriate Minister may make a CPO under paragraph 3 in Schedule 5 to the New Towns Act 1981 which includes a direction that compensation is to be assessed in accordance with section 14A of the 1961 Act only if they are satisfied the direction is justified in the public interest.
Paragraph 5A(9) specifies where a CPO is made which includes a direction that compensation is to be assessed in accordance with section 14A of the 1961 Act, the notice required to be served under paragraph 5 in Schedule 5 to the New Towns Act 1981 must provide the following information:
a statement on the effect of the direction;
an explanation of how the new town development corporation’s statement of commitments may be viewed; and
an explanation that additional compensation may become payable if the development corporation does not fulfil its statement of commitments.
Paragraph 5A(10) provides definitions for terms in new paragraph 5A in Schedule 5 to the New Towns Act 1981.
	Subsection (3A) of section 190 inserts new paragraph 3B in Schedule 4 to the Welsh Development Agency Act 1975. This makes similar amendments to Schedule 4, which sets out the procedure for compulsory acquisition under the Welsh Development Agency Act 1975, as were made to the 1981 Act by subsections (1)(c) and (d) as described above. It makes the following provisions:
Paragraph 3B(1) allows the Welsh Ministers, when preparing a CPO in draft under section 21A(1)(b) or (2)(b) of the Welsh Development Agency Act 1975, to include in the draft order a direction that compensation is to be assessed in accordance with section 14A of the 1961 Act.
Paragraph 3B(2) requires the Welsh Ministers to submit a statement of commitments with a draft CPO which includes a direction that compensation is to be assessed in accordance with section 14A of the 1961 Act. Paragraph 3B(3) defines a ‘statement of commitments’ as a statement of the Welsh Ministers’ intentions as to what they will do with the land included in the draft CPO should the CPO be made. It is these intentions which the Welsh Ministers will rely on to justify that the direction is in the public interest. Paragraph 3B(4) makes it a condition that the Welsh Ministers’ intentions must include provision of affordable housing.
Paragraph 3B(5) provides the statement required under paragraph 3(1)(a) of Schedule 1 to the Acquisition of Land Act 1981 must:
include a statement of the effect of the direction i.e. that the assessment of compulsory purchase compensation cannot take account of the prospects of planning permission being granted on the land which means the assessment may not take account of either:
the prospect of appropriate alternative development being established on the land, or
the prospect of planning permission being granted for other development on or after the relevant valuation date;
name a place within the locality where a copy of the statement of commitments may be viewed.
Paragraphs 3B(6) – (7) explain the Welsh Ministers may amend their statement of commitments before a CPO with a direction is made only if:
they are satisfied the amendment would not be unfair to any person who made or could have made an objection to the CPO, and
the Welsh Ministers’ intentions continue to include the provision of affordable housing.
Paragraph 3B(8) provides the Welsh Ministers may make a CPO which includes a direction that compensation is to be assessed in accordance with section 14A of the 1961 Act if they are satisfied the direction is justified in the public interest. If the Welsh Ministers are not satisfied the direction is justified in the public interest, they may decide not to make the CPO or, if they do decide to make the CPO, they must modify the draft CPO to remove the direction.
Paragraph 3B(9) specifies where the Welsh Ministers make a CPO which includes a direction that compensation is to be assessed in accordance with section 14A of the 1961 Act, the notice required to be served under paragraph 6 in Schedule 1 to the 1981 Act must provide the following information:
a statement on the effect of the direction;
an explanation of how the Welsh Ministers’ statement of commitments may be viewed; and
an explanation that additional compensation may become payable if the Welsh Ministers’ do not fulfil their statement of commitments.
Paragraph 3B(10) provides definitions for terms in new paragraph 3B in Schedule 4 to the Welsh Development Agency Act 1975.
Paragraph 3B(11) explains the applicable procedure for regulations made under paragraph 3B(10).
	Subsection (4) of section 190 amends section 157 of the Town and Country Planning Act 1990 and inserts new subsection (A1) before subsection (1). The effect of which is where an interest in land is acquired following the serving of a blight notice, and the associated CPO which is operative (i.e. has been confirmed but the compulsory purchase powers have yet to be exercised) includes a direction that compensation is to be assessed in accordance with section 14A of the 1961 Act, the assessment of compensation is to be undertaken:
in accordance with that direction, and
as if the deemed notice to treat for the interest had been served as a result of the confirmation of the CPO.
Example 1 – Using compulsory purchase to facilitate affordable housing
Where a local authority has taken steps to acquire land by agreement to progress a scheme which includes affordable housing, but where such an agreement cannot be reached, the authority may use its powers of compulsory purchase to acquire the land providing they are applicable and there is a compelling case in the public interest to do so. For example, where doing so would facilitate the carrying out of development, re-development or improvement it may choose the power to make a compulsory purchase order (CPO) under section 226 of the Town and Country Planning Act 1990 ("the 1990 Act").
To ensure the local authority has:
a) upfront certainty on the viability of its scheme (which includes affordable housing) to be facilitated by a CPO under section 226 of the 1990 Act, and
b) confidence as to its ability to deliver the promised amount of affordable housing,
the authority may seek a direction from the Secretary of State, or the Welsh Ministers for CPOs in Wales, so it can acquire the land at closer to existing use value by not paying ‘hope value’ compensation. This means the compensation to be paid by the local authority for the value of the land would not include value attributed to:
· appropriate alternative development for which the grant of planning permission may be assumed (ignoring the local authority’s scheme) if a Certificate of Appropriate Alternative Development is issued under section 17 or 18 of the Land Compensation Act 1961, or
· the prospect of a planning permission being granted on the land (ignoring the local authority’s scheme) for a use which has a greater value than the existing use of the land (section 14(2)(b) of the Land Compensation Act 1961).
Where a direction is confirmed by the Secretary of State in England, or the Welsh Ministers for CPOs in Wales, affected landowners may claim compensation for the value of:
· any existing planning permission on the land which remains in force, or
· the prosect of planning permission being granted for the conversion of a single dwelling into a two or more separate dwellings.
A direction will only be confirmed by the Secretary of State, or the Welsh Ministers for CPOs in Wales, if they are satisfied the local authority has demonstrated that the direction is justified in the public interest.
If the local authority does not deliver the scheme it promised (including the provision of specific numbers of affordable housing units) within 10 years of the issuing of the original direction, or earlier where there is no realistic prospect that the scheme can be delivered within 10 years, affected landowners may ask the Secretary of State, or the Welsh Ministers for CPOs in Wales, to issue a direction that additional compensation may be paid to them by the local authority.
Example 2 – Using compulsory purchase to facilitate construction of a hospital
Where a National Health Trust has taken steps to acquire land by agreement to progress a scheme to facilitate the construction of a new hospital and associated facilities, but where such an agreement cannot be reached, the Trust may use its powers of compulsory purchase to acquire the land providing it can establish the required ground and there is a compelling case in the public interest to do so. For example, it may choose the power to make a compulsory purchase order (CPO) under paragraph 27 of Schedule 4 to the National Health Service Act 2006 ("the 2006 Act") for the purposes of carrying out its functions.
To ensure the National Health Trust has:
a) upfront certainty on the viability of its scheme to be facilitated through a CPO under paragraph 27 of Schedule 4 to the 2006 Act, and
b) confidence as to its ability to deliver the new hospital and associated facilities,
the Trust may seek a direction from the Secretary of State, or the Welsh Ministers for CPOs in Wales, so it can acquire the land at closer to existing use value by not paying ‘hope value’ compensation. This means the compensation to be paid by the Trust for the value of the land would not include value attributed to:
· appropriate alternative development for which the grant of planning permission on the land may be assumed (ignoring the Trust’s scheme) if a Certificate of Appropriate Alternative Development is issued under section 17 or 18 of the Land Compensation Act 1961; or
· the prospect of a planning permission being granted on the land (ignoring the Trust’s scheme) for a use which has a greater value than the existing use of the land (section 14(2)(b) of the Land Compensation Act 1961).
Where a direction is confirmed by the Secretary of State, or the Welsh Ministers for CPOs in Wales, affected landowners may claim compensation for the value of:
· any existing planning permission on the land which remains in force, or
· the prosect of planning permission being granted for the conversion of a single dwelling into a two or more separate dwellings.
A direction will only be confirmed by the Secretary of State, or the Welsh Ministers for CPOs in Wales, if they are satisfied the National Health Trust has demonstrated that the direction is justified in the public interest.
If the National Health Trust does not:
a) deliver its scheme within 10 years of the issuing of the original direction, or
b) it becomes apparent earlier that there is no realistic prospect that the scheme can be delivered within 10 years,
affected landowners may ask the Secretary of State, or the Welsh Ministers for CPOs in Wales, to issue a direction that additional compensation may be paid to them by the Trust.
Example 3 – Using compulsory purchase to facilitate construction of a school
Where a local authority has taken steps to acquire land by agreement to progress a scheme to facilitate the construction of a new primary school, but where such an agreement cannot be reached, the authority may use its powers of compulsory purchase to acquire the land providing there is a compelling case in the public interest to do so. For example, it may choose the power to make a compulsory purchase order (CPO) under section 530 of the Education Act 1996 ("the 1996 Act").
To ensure the local authority has:
a) upfront certainty on the viability of its scheme to be facilitated through a CPO under section 530 of the 1996 Act, and
b) confidence on its ability to deliver the new primary school,
the authority may seek a direction from the Secretary of State, or the Welsh Ministers for CPOs in Wales, so it can acquire the land at closer to existing use value by not paying ‘hope value’ compensation. This means the compensation to be paid by the Trust for the value of the land would not include value attributed to:
· appropriate alternative development for which the grant of planning permission on the land may be assumed (ignoring the authority’s scheme) if a Certificate of Appropriate Alternative Development is issued under section 17 or 18 of the Land Compensation Act 1961; or
· the prospect of a planning permission being granted on the land (ignoring the authority’s scheme) for a use which has a greater value than the existing use of the land (section 14(2)(b) of the Land Compensation Act 1961).
Where a direction is confirmed by the Secretary of State, or the Welsh Ministers for CPOs in Wales, affected landowners may claim compensation for the value of:
· any existing planning permission on the land which remains in force, or
· the prosect of planning permission being granted for the conversion of a single dwelling into a two or more separate dwellings.
A direction will only be confirmed by the Secretary of State, or the Welsh Ministers for CPOs in Wales, if they are satisfied the local authority has demonstrated that the direction is justified in the public interest.
If the local authority does not:
a) deliver its scheme within 10 years of the issuing of the original direction, or
b) it becomes apparent earlier that there is no realistic prospect that the scheme can be delivered within 10 years,
affected landowners may ask the Secretary of State, or the Welsh Ministers for CPOs in Wales, to issue a direction that additional compensation may be paid to them by the authority.
Affected landowners cannot ask the Secretary of State, or the Welsh Ministers for CPOs in Wales, to issue a direction for the payment of additional compensation if 13 years have passed since notification was first given to the effected landowners of the confirmation of the CPO which included the original direction.
Where the Secretary of State, or the Welsh Ministers for CPOs in Wales, issue a direction that additional compensation may be paid to affected landowners, additional compensation will be payable where the amount of hope value compensation they were prevented from claiming ("the alternative amount of compensation") is greater than the original amount of compensation they received from the local authority for their land ("the original amount of compensation").
The amount of additional compensation affected landowners will receive will be the difference between the alternative amount of compensation and the original amount of compensation.
The alternative amount of compensation may be assessed by taking account of the value associated with:
a) appropriate alternative development for which the grant of planning permission on the land may be assumed (ignoring the local authority’s original scheme) if a Certificate of Appropriate Alternative Development is issued under section 17 or 18 of the Land Compensation Act 1961; or
b) the prospect of a planning permission being granted on the land (ignoring the local authority’s original scheme) for a use which has a greater value than the existing use of the land (section 14(2)(b) of the Land Compensation Act 1961).