How will the Planning and Infrastructure Bill impact compulsory purchase orders?

The Planning and Infrastructure Bill, which is currently under consideration, introduces a series of significant reforms to the compulsory purchase process. The proposed changes aim to streamline procedures, improve compensation arrangements, and enhance the flexibility of CPO powers.

Notably, the bill includes provisions that will affect local authorities, acquiring authorities, landowners, and other stakeholders involved in compulsory purchase order (CPO) processes. In this article, we define compulsory purchase orders and explore how the Planning and Infrastructure Bill will impact the process.

What are compulsory purchase orders?

A CPO allows public bodies such as local authorities or government departments to acquire land or property without the consent of the landowner. This power is typically invoked when land is needed for essential infrastructure projects, such as roads, housing developments, or environmental initiatives.

Historically, the process has been cumbersome, requiring multiple steps for service of notices, land valuations, and the negotiation of compensation. The Planning and Infrastructure Bill introduces changes aimed at addressing these inefficiencies, while providing greater flexibility and fairness for all parties involved.

How will the bill impact compulsory purchase orders?

1. Disapplication of hope value to affordable housing projectsThe Planning and Infrastructure Bill proposes an expansion of the disapplication of ‘hope value’ in the assessment of land for CPOs. Hope value, which refers to the potential future value of land based on possible planning permissions, will no longer be considered in valuations for certain land acquisitions - especially those related to local and community projects focused on affordable and social housing.

The government’s view on this point is that the removal of hope value will 'speed-up decisions and ensure we deliver more of the houses, schools, hospitals and other vital infrastructure that people in this country need.'
 
2. Reversal of the ‘loss payment’ process

The Planning and Infrastructure Bill also introduces a reversal of the loss payment process, which will allow occupiers of land to claim up to £75,000 in compensation under certain circumstances. Previously, loss payments were only available to those without land occupation rights, disadvantaging current occupiers.

This change is important as it ensures greater fairness by compensating those who may be displaced from their homes or businesses due to a CPO. Specifically, the bill states:

3. Electronic service of notices

A significant modernisation of the CPO process is the shift towards electronic service of notices, replacing traditional post. This reform is expected to speed up the entire process, reduce administrative burdens, and improve accessibility for stakeholders. The Planning and Infrastructure Bill includes provisions that:

4. Expedited vesting of land

The vesting of land can now occur more quickly, allowing acquiring authorities to take possession of the land without unnecessary delays. Under the Planning and Infrastructure Bill, the introduction of an ‘expedited procedure’ will enable the vesting process to occur within six weeks in certain circumstances, as opposed to the traditional three-month period.

Under section 86, the expedited procedure applies if the land is unoccupied or unfit for ordinary use, enabling faster execution of vesting declarations.

Commercial impact of the Planning and Infrastructure Bill on compulsory purchase orders

For developers and acquiring authorities: the removal of hope value from CPO compensation assessments will likely reduce the overall costs of acquiring land for development, particularly for affordable housing and infrastructure projects. This could make projects more financially viable, especially in areas where land prices have been inflated due to speculative expectations.

For landowners and occupiers: The reversal of the loss payment process and the increase in compensation for occupiers will provide greater financial security for those displaced by CPOs. This is especially beneficial for small business owners and individuals whose livelihoods depend on the land in question.

Conclusion

The Planning and Infrastructure Bill introduces important reforms that will modernise the CPO process and offer greater flexibility and fairness to all stakeholders. From quicker vesting of land to better compensation for occupiers and the extension of CPO powers to support environmental goals, these changes are set to have a lasting impact on both the public and private sectors.

Landowners, occupiers, and acquiring authorities should prepare for these changes and seek legal advice to navigate the evolving landscape of compulsory purchases in the UK.

For more information please contact our planning and infrastructure consenting team.