In a bid to bolster levelling up projects, the Government has brought forward amendments to the existing compulsory purchase legislation as part of the recently enacted Levelling Up and Regeneration Act (LURA) so that that Compulsory Purchase Orders (CPOs) for specific projects, such as education, healthcare, or affordable housing, could be approved without compensating the landowner for the elusive ‘hope value.’ While a politically charged issue, the importance of CPOs should not be overlooked, given their direct impact on lives across communities in England and Wales. As both sides of the political spectrum acknowledge the need for reform, the pressing question remains. Will these amendments effectively deliver projects and ensure fair compensation for landowners in the CPO process?

What’s the ‘Hope Value’ and why is it Contentious?

The ‘hope value’ has long been a contentious aspect of CPOs, hinging on the potential future worth of a piece of land rather than its current market value based on existing use. Difficult to quantify, hope values introduce subjectivity, expert opinions, and negotiations into the equation, imposing potential barriers to urgent regeneration and infrastructure projects.

How do CPOs act as an Insurance Policy for Essential Projects?

Considering the proposed changes in LURA (which are awaiting secondary legislation to bring them in to force) the Government aimed to weigh the importance of each project proposal and evaluate the overall benefit to communities. For projects crucial to the public’s quality of life, such as flood defences or transportation networks, CPOs are positioned as an insurance policy, ensuring essential projects proceed unhindered.

Are CPOs Underutilised?

While acknowledging the need for reform, the proposed changes address the potential underuse of CPOs, particularly in sectors like affordable housing delivery. This shift raises questions about how these changes might impact the promotion of land through local plans.

What’s could be the Impact on Land Promotion through Local Plans?

The proposed changes have sparked concerns about how they will affect the promotion of land through Local Plans. The intricate process, with significant time and cost investment, may lack protection for allocated land without a planning permission, leaving it vulnerable to CPO powers.

How will the Changes Influence Landowners and Developers?

With uncertainties about land promotion and the absence of hope value, developers and promoters may be hesitant to promote land, fearing local authorities might seek compulsory purchase at existing use value after its promotion. This uncertainty poses potential threats hanging over development sites.

As we wait to see if and when the proposed changes are brought into force, the dynamics of CPO use and the factors influencing authorities’ decisions will be watched closely. The challenge remains whether these amendments will effectively address the longstanding issues surrounding hope value and the complex nature of the CPO process itself. The interplay between landowners, developers, and authorities continues, and the landscape of compulsory purchase orders is poised for a transformation.

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Paul is a specialist planning solicitor who focusses on delivering practical solutions for his clients.

Pauls’ work covers all aspects of the planning process, from strategic advice and drafting section 106 obligations and other planning and infrastructure agreements through to planning appeals and advocacy.

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Published: 21st November 2023
Area: Real Estate & Planning

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