The Neighbourhood Planning Act 2017 – CPO compensation and procedural changes

The Neighbourhood Planning Act 2017 contains a number of provisions relevant to compulsory acquisition. This article looks at the changes that were brought into operation on 22 September 2017.

28 September 2017

From 22 September, important changes have been made to various aspects of planning and CPO law and practice. These were introduced in April by the Neighbourhood Planning Act 2017 and have just been brought into play by commencement regulations (SI 2017/936). The amendments address a number of issues which have, for a long time, been considered inconsistent, unfair or lacking in clarity. Here we look at changes relating to:

  • the no scheme principle
  • second bite compensation
  • confirmation notices
  • disturbance compensation
  • joint CPOs in London

These are part of a wider suite of changes and this article also notes important elements contained in the Act which have yet to come into force. Alongside these changes, the government has introduced a model claim form for those claiming compensation.

Which CPO schemes are affected?

The provisions in respect of the no scheme principle and the changes to disturbance compensation only apply to CPOs made or authorised after the 22 September. For current schemes or CPO claims, the previous approach will apply.

What are the changes?

The no-scheme principle

The new provisions essentially put the way compensation is assessed for land taken by compulsory purchase on a statutory footing. They also provide clarity to the no-scheme principle (that in determining compensation, any increase or decrease in value caused by the scheme of acquisition should be disregarded).

The new sections (s6A-6E inserted into the Land Compensation Act 1961) embody the no-scheme principle and set out the parameters of how the scheme is to be approached. These new sections replace the previous legislation (s6-s9).

The key addition is the extension of the definition of the scheme to allow for specific transport infrastructure projects to be disregarded. The reason for this change is to prevent those owners facing a CPO for, say, a regeneration scheme securing increased compensation for their site when that increased land value can be attributed to a transport scheme, such as a new road which opened up that site for redevelopment.

Acquiring authorities will be looking at these provisions to limit compensation. Claimants will need to be careful to ensure that any pre-existing value, such as a ransom, doesn’t fall foul of these changes.

Removal of second-bite compensation

Claimants are no longer entitled to claim additional compensation where, within 10 years of the completion of the compulsory purchase by the acquiring authority, a planning decision is made granting consent for additional development on the land. The new law repeals Part 4 of the Land Compensation Act 1961. The previous law was considered unnecessary as the prospects of obtaining planning permission in the future should have already been taken into account when assessing compensation as part of the application of the statutory planning assumptions.

Time period for confirmation notices

There is now a requirement on acquiring authorities to serve and publish a confirmation notice within six weeks of a CPO being confirmed (unless a longer period is agreed between the acquiring and confirming authorities). The result of this is that a CPO will become operative on the date of the confirmation notice. This will trigger the statutory six week period within which any challenge must be made and the three year implementation period. Previously there was no set period for a confirmation notice to be served. The amendment therefore gives those affected by a CPO more certainty.

Compensation for disturbance

The new law regularises the assessment of compensation for disturbance for licensees with no interest in land with that for business tenants and lessees with a break clause (via a new section 47 Land Compensation Act 1973).

Prior to the amendments, those with a minor interest in land may have been entitled to more compensation than someone with a leasehold interest as, in assessing the compensation entitlement for tenancies, it was assumed that the landlord would terminate the tenant’s interest at the first available opportunity.

However, under the new provisions, the prospect of continuation or renewal of the tenancy is to be taken into account. The effect of this is to overcome the decision in Bishopsgate Space Management v London Underground [2004] and place all interests which do not benefit from security of tenure on the same footing.

Joint CPOs – GLA and TfL

The Greater London Authority, a Mayoral Development Corporation or Transport for London are now allowed to acquire land authorised by a compulsory purchase order on behalf of each other for a joint project. It is considered by the government that these changes potentially will assist in bringing forward comprehensive developments, particularly housing. These changes should make the CPO process more efficient and cost effective in such circumstances.

New model claim form

As well as bringing into force the above changes, the government has also published a model claim form with accompanying guidance (also on 22 September).

This advises acquiring authorities to send the form to potential claimants at the earliest opportunity and encourages claimants to complete and return it as early as possible. It is not to be treated as once and for all process as the form can be updated or supplemented by correspondence throughout negotiation in the usual way.

The intention is to make it clearer to claimants and acquiring authorities what information and what level of detail should be provided by claimants and to encourage early disclosure and transparency in negotiations.

The claim form is intended to assist a claimant in complying with the requirement in section 4 of the Land Compensation Act 1961 to make a detailed and properly evidenced claim. It highlights that, where a reference is made, a claimant risks an award of costs against them if they have not provided the information in time to enable the acquiring authority to make a proper offer.

The indication is that if the model claim form is not used, provided late and either not completed by the claimant or poorly completed, the Tribunal may rely on this as justification to award costs against claimants. It will be important for claimants to use the new forms and for their advisers to ensure it is completed as fully and as early as possible.

Future changes

It should be noted that there are still a number of important changes to the CPO regime (contained within the Neighbourhood Planning Act 2017) which are not yet operative.

For instance, it is still not possible to take advantage of the new powers to take temporary possession of land. These provisions could prove very useful for acquiring authorities and are long awaited by many.

Also, the changes to advance payments are yet to be brought into force. These provisions are designed to assist with early reimbursement and will be welcomed by claimants when compensation is in dispute.

There is a lot of detail to be worked through to ensure these provisions work in practice. As such, it is not possible to say with any certainty when we might expect to see the full extent of the amendments in operation.

Key contact

Gary Soloman

Gary Soloman Partner

  • Head of Planning and Compulsory Purchase
  • Regeneration and Highways
  • Compulsory Purchase and Compensation

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