Part 2: Compulsory Purchase Etc Chapter 2: Other provisions relating to compulsory purchase Section 32: No-scheme principle
Compensation for land taken by compulsory purchase is assessed in the "no-scheme world". This assumes that the scheme underlying the compulsory purchase was cancelled on the valuation date (the date of entry and taking possession of the land – if not agreed earlier). Compensation for interests in land is its open market value in the "no-scheme world", disregarding both any increase or decrease in the value of the land which is solely attributable to the particular purpose for which it is acquired, and the acquiring authority’s need for the land for that purpose.
	The principles and assumptions concerning the no-scheme world and the extent of the scheme to be disregarded are mainly to be found in sections 6 to 9 of the Land Compensation Act 1961 (‘1961 Act’) and around 100 years of case law on these provisions and their predecessors.
	This section clarifies the principles and assumptions for the "no-scheme world", taking into account the case law and judicial comment.
	Subsection (3) inserts new sections 6A to 6E to replace sections 6 to 9 of the 1961 Act.
	New Section 6A sets out the ‘no scheme principle’ that any increases or decreases in value of land caused by the scheme or by the prospect of that scheme must be disregarded in valuing the land which has been compulsorily acquired and lists the five ‘no-scheme rules’ to be followed when applying the ‘no-scheme principle’. Subsection 6A(10) provides a cross-reference to the planning assumptions in section 14 of the 1961 Act.
	New section 6D defines ‘the scheme’ for the purposes of establishing the no-scheme world. The default position is set out in subsection (1), being that the ‘scheme’ means the scheme of development underlying the compulsory acquisition. Subsections (2) to (6) provide for special cases.
	Subsection (2) clarifies that for urban development areas, new towns and Mayoral development areas, ‘the scheme’ is the development of any land for the purposes for which the area is (or was) designated.
	Subsections (3) and (4) provide that where land is acquired for regeneration or redevelopment which is facilitated or made possible by a "relevant transport project" (defined in subsection (4)(a)), ‘the scheme’ includes the relevant transport project subject to the qualifying conditions and safeguards set out in new section 6E.
	Subsection (5) provides that disputes as to the ‘scheme’ (the "underlying scheme") to be disregarded can be referred to and determined by the Upper Tribunal. The underlying scheme shall be taken by the Upper Tribunal to be the scheme provided for by the Act or authorising instrument (e.g. compulsory purchase order) unless it is shown that it is part of a larger scheme. Save by agreement or in special circumstances, the Upper Tribunal shall not permit the acquiring authority to advance evidence of a larger scheme to be disregarded unless it is identified in the authorising instrument or any documents made available with it.
	This section extends and applies to England and Wales only.