Using compulsory purchase powers to bring forward development on allocated sites

In the third article in a series on CPOs, Chris Skinner examines the use of compulsory purchase powers to bring forward development on allocated sites

Not all sites allocated for development in local plans are actually developed. There may be a variety of reasons for this. It could be that market conditions are not right. It may be that the owner paid a high price for the land before the financial crisis, and will not sell until prices rise further. There could be a large number of landowners, who will not cooperate to bring forward a development. Whatever the reason, this situation causes frustration to the local planning authority. Other sites may have to be identified for the appropriate development, which are less acceptable in planning terms. There might be speculative planning applications on unallocated sites. The council’s five-year housing land supply may be prejudiced.

Whilst a local authority may well encourage the owner(s) to bring forward development, and may even have offered to purchase the land direct, this will only get them so far if the owner(s) does not want to cooperate. In this scenario the only realistic option for the council is the compulsory acquisition of the land. Once acquired the land can then be marketed for development. This may seem a drastic action to some councillors, but it is more straightforward than they imagine.

There are two compulsory purchase powers that can be used to acquire land required for development. One is contained in section 226(1)(a) of the Town and Country Planning Act 1990. This provides for the compulsory acquisition of land to facilitate its development, redevelopment or improvement, provided that this will secure social, economic or environmental benefits. The other is contained in section 226(1)(b) of the 1990 Act. This provides for the compulsory acquisition of land where it is required for a purpose which it is necessary to achieve in the interests of the proper planning of the area. The DCLG online CPO guidance provides as follows: The [planning] power is intended to provide a positive tool to help acquiring authorities with planning powers to assemble land where this is necessary to implement proposals in their Local Plan or where strong planning justifications for the use of the power exist. This is strong encouragement for councils to take an interventionist role.

It does not really matter whether the CPO is made under section 226(1)(a) or 226(1)(b). The former power is probably more appropriate where there is a specific development to be carried on the land, namely one that is covered by a specific planning permission.

A compulsory purchase order should only be made where there is a compelling case in the public interest. Factors to take into account when deciding whether to compulsorily acquire an allocated site are

• Is the local plan up to date
• Why isn’t the owner bringing the site forward
• Could the council do anything to bring forward the development of the site, short of a CPO
• What are the consequences of the site not being developed
• Are there appropriate developers who would purchase the land from the council following its compulsory acquisition, and then develop it in a timely manner

Whilst the title to this article refers to delivering development on sites allocated for development in a local plan, the CPO powers mentioned can also be used to deliver development supported by local plan policies even if there is no site specific allocation.

There are, of course, costs associated with a CPO. Usually the most significant cost is the market value element of the statutory compensation. Where the council is selling on the land for development it should receive, by way of sale proceeds, a sum equivalent to the market value. This means that the local authority will just need to budget for the actual legal and administrative costs of making the CPO, and for those items of compensation in addition to the market value. It may even be that a deal can be done with a developer, whereby the developer covers all the council’s costs of the CPO process.

nplaw has dealt with a number of CPOs made to secure development proposals. Some examples are given below.

Ryedale District Council’s Helmsley Local Plan was being considered at examination. There was one site in Helmsley allocated for housing and another allocated for employment. The inspector was concerned that the owner of the two sites (the same company) would not, in view of its past track record, bring the two sites forward for development. The examination was postponed. Ryedale then decided to make separate CPOs for each site. This was sufficient to enable the inspector to continue with the examination. The orders were made under section 226(1)(b). There were no objections to the housing CPO and one objection to the employment CPO, although this was subsequently withdrawn. Both orders were confirmed. The housing site is currently being marketed for sale.

Great Yarmouth Borough Council had a general policy to provide an Energy Park near the Port. It wanted a site that would be of such a size and location that it would be attractive to energy companies. The council particularly had in mind companies associated with the offshore energy industry and with decommissioning gas rigs. The council owned a large part of the Energy Park but made a CPO under section 226(1)(b) in respect of a redundant factory comprising the southern part of the site. Although there was no specific allocation of an Energy Park in the local plan, there were plenty of planning policies that supported the growth of the Port and Port related businesses. This was considered sufficient to underpin a CPO made in the interests of the proper planning of the area. The CPO was not tested at a public inquiry as the owner of the redundant factory subsequently agreed to sell the property to the local authority.

Wellingborough Borough Council was concerned about a site that comprised an empty supermarket and a small terrace of empty shops. It looked scruffy and run down. The Council wanted to see it redeveloped for housing. Development plan policies supported residential development of the site although it was not specifically allocated as such. Following a public inquiry the CPO was confirmed.

South Norfolk Council had a draft local plan for that allocated a large site in a town outside Norwich for housing development. There were a number of different landowners and the council was concerned that there was a lack of cooperation so as to bring forward a comprehensive development. The cabinet made an in principle decision to make a CPO under section 226(1)(b) for the whole of the proposed allocation. This was sufficient to get the landowners talking again.

Hopefully this article shows that local authorities, if they are prepared to be bold, can deliver development supported by their planning policies.

Chris Skinner is Practice Director for nplaw, the shared local authority legal service hosted by Norfolk County Council. He also heads nplaw’s CPO Consultancy Service, that undertakes CPO work for local authorities across England and Wales. The Service has dealt successfully with a range of housing estate regeneration projects.

This is the third in a series of articles on CPOs. See also: Housing estate regeneration and CPOs and CPOs and run-down listed buildings