RTPI calls for reforms to Land Compensation Act 1961 to boost councils

The Government should reform the 1961 Land Compensation Act to allow local authorities to compulsorily purchase land at existing use value and capture the increase in land value following public investment in infrastructure, the Royal Town Planning Institute (RTPI) has said.

In its response to the Housing White Paper the Institute argued that making better use of the powers of development corporations in the reformed New Towns Act would help to achieve this.

The RTPI also said it wanted local authorities to be able to sell land with planning consent which they have granted themselves, “allowing them to keep the increase in land value while adding certainty for developers”

The Institute suggested that there were many useful measures in the White Paper, but argued that “some fundamental ones required to change the unhealthy behaviours of the land and house building market are sorely missed”.

In its response it suggested that the White Paper should have gone further in allowing local authorities to apply for permission on land they do not own. “This would ensure planning permissions are in the best places for development and speed up the permission process.”

The RTPI added that free and transparent land ownership data was also a key first step to help address the issue of land owners holding on to land and selling for high prices.

Trudi Elliott, RTPI Chief Executive, said: "We are especially disappointed there is no mention [in the White Paper] about improving the land value capture mechanism – the single most useful instrument to channel value generated by development towards infrastructure and social housing without incurring more public debt.”

The Institute also said:

• Infrastructure needed to be prioritised in locations where the largest area of land ready for development could be ‘unlocked’ rather than just in places where there was an existing need. “If infrastructure is only invested in areas with existing need regional imbalances may be reinforced rather than encouraging growth and investment in other areas."
• It was concerned about the limited connections between the UK Government’s housing and industrial strategies and the way infrastructure was connected to development.
• The Government had failed to provide enough incentives for local authorities to work together across their respective boundaries to deliver housing, infrastructure and development.
• The increase in fees for planning applications was welcome but it was concerned the measures might not be sufficient to mitigate the impact of years of under investment.

The RTPI’s full response to the Housing White Paper can be read here.