Let us CPO: MHCLG launches pre-Christmas consultation on proposals to significantly broaden CPO powers and the ability to remove hope value
After four significant working papers and a shiny new NPPF, we finally have a traditional pre-Christmas consultation!
Today MHCLG has launched an eight-week consultation into a proposal amend CPO powers to make it easier for councils to purchase sites without having to take account of any “hope value” that they may otherwise attract.
Ignore the headlines about “vacant and derelict” buildings the proposed changes are potentially much broader than that and could extend to brownfield sites without the benefit of a planning permission and allocated sites that have yet to come forward for development.
These powers are additional to all of the recent CPO changes introduced by the Levelling-Up & Regeneration Act (LURA) earlier this year.
The consultation closes on 13 February 2025. Details of how to respond can be found here.
So, let's take a look at what is actually being proposed.
Widening the scope of directions removing hope value
The first set of proposed changes are all focused on widening the circumstances in which you can obtain a direction to remove hope value from a CPO scheme; and making them easier to obtain.
In particular the government is proposing:
- to expand the list of CPOs which can apply for directions to remove hope value so that it includes those made under section 125 of the Local Government Act 1972 on behalf of town and community councils where the underlying schemes facilitate affordable or social housing.
- to allow Inspectors to confirm CPOs which include directions to remove hope value that have been objected to - without the involvement of the Secretary of State.
- to allow an acquiring authority to confirm a CPO which includes a direction to remove hope value in situations where there are no objections to the CPO.
- to allow the decision-making function relating to the making of a direction for additional compensation under Schedule 2A to the Land Compensation Act 1961 to be delegated to an Inspector.
- to amend the legislation to make it clear that directions to remove hope value apply to all forms of CPO compensation where market value of land is a component of the calculation of the amount due (including claims for home loss (and related) payments under the Land Compensation Act 1973); and finally
- to introduce a new power to introduce blanket directions for the removal of hope value from specific types of property - as opposed to the direction always being made on a case-by-case basis.
This last bullet point is significant and worth spending some more time on. The proposal in the consultation is as follows:
To introduce a general power that would "enable the Secretary of State in England or the Welsh Ministers in Wales to make a direction to remove hope value from the assessment of compensation for a specific category of sites where justified in the public interest. We are exploring whether such a general direction would be justified on the grounds that it will support delivery of the government’s national housing objectives, particularly for affordable housing. The following are categories of sites we think could be appropriate for the alternative approach to removing hope value:
- brownfield land in built-up areas, suitable for housing delivery, but with no extant planning permission for residential development;
- land allocated for residential development in an adopted plan but which has not come forward for development."
This is a much broader power than the “case by case” directions currently permitted under LURA and has the potential to be extremely disruptive to the land market if not carefully managed. After all it takes a LOT of time, money and effort to promote a site for allocation in a local plan, and care needs to be taken not to disincentivise landowners, developers and promoters from doing so.
Modernisation of the CPO Process
These changes mostly fall into the “broadly sensible” category. Proposals include:
- allowing notices to be served electronically on public authorities by default and other parties with their consent.
- simplifying and streamlining the information required in CPO notices about the description of the land proposed for compulsory purchase.
- Allowing acquiring authorities to modify compulsory purchase orders more easily in certain circumstances
- Allowing the Secretary of State to delegate decisions on the confirmation of compulsory purchase orders made under the New Towns Act 1981 to Inspectors in certain circumstances
- expanding the situations where “temporary possession” of land can be obtained to facilitate CPO schemes; and
- creating a new “expedited vesting notice procedure” that would apply where:
- At the date the general vesting declaration is executed, that the land or property subject to the confirmed CPO is not legally occupiable due to its current physical condition; or
- Where no responses were received to notices served or published relating to a CPO authorising the acquisition of an interest in land/property and no objections were made to the CPO
Changes to Compensation Rules
The last group of proposals are centred on changes to the rules governing how CPO compensation is assessed. Proposed changes include:
- changing how loss payments to those whose land is being purchases are divided between the owners of the property and those occupying it - so that a greater share goes to the occupier;
- introducing a new exclusion from discretionary home loss payments- so that home owners would cease to be eligible for the payments if they have failed to comply with a statutory enforcement notice/order served on them by the time the relevant CPO is confirmed.
The full consultation document can be accessed here.
Conclusion
In short, it is yet another significant consultation launched on the eve of a major public holiday.
The proposal to create a new power to introduce general directions to remove hope value from some allocated sites and brownfield buildings without planning permission could have significant ramifications for both land promotion and the wider land market.
As such, I would expect it to gather a LOT of attention - not least as it is not limited to “vacant or derelict sites” as the initial press-coverage may have indicated.
This is one consultation that is definitely worth being on the Christmas reading list…..
….and finally, the traditional festive carol.
This one might have partly been inspired by the recent blizzard of policy announcements.
Oh, the state of this building's frightful
But our plans are so delightful
We could build affordable homes
Let us CPO, let us CPO, let us CPO
It doesn't show signs of re-occupying
And new infrastructure needs supplying
Our social housing stock is far too low
Let us CPO, let us CPO, let us CPO
7. The government is concerned there is a significant amount of suitable land available for housing which is currently lying vacant or underutilised and not coming forward for development or, where it is coming forward for development, the provision of affordable housing offered on those sites is below the minimum ask of the local authority.
8. Our reforms will ensure the process for compulsorily acquiring land with a direction to remove the payment of hope value for schemes in the public interest is more efficient. Also, that the balance of the assessment of compensation awarded to landowners is fair and quicker decisions on CPOs can be made allowing schemes in the public interest to progress. In addition, the administrative costs of undertaking the CPO process can be reduced.”
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