The past six months have seen two major compulsory purchase orders refused.
The decisions involved planning inspectors – appointed by the secretary of state for levelling up, housing and communities – not confirming CPOs sought by Royal Borough of Windsor & Maidenhead Council and the London Borough of Barking & Dagenham.
While effectively halting the regeneration and redevelopment of Barking and Maidenhead town centres, these decisions have put the use of CPO powers back under the microscope, with a focus on their potential impact on affected landowners, residents and businesses.
Analysing the decisions
The reasons behind the two refusals were different.
In Maidenhead (pictured above), the inspector was critical of the acquiring authority and its partners for their failure to pursue meaningful negotiations with the owners of Smokeys Nightclub, which, if compulsorily acquired, would have likely resulted in the extinguishment of the business.
The Barking rejection followed the inspector finding inadequate evidence of the scheme’s financial viability. The inspector was concerned that no budget had been built in for business extinguishment costs, with uncertainty also over the assertion that the scheme was viable. The most recent viability review had been carried out in 2016.
A unifying factor in both cases, however, was that each inspector recognised the positive benefits of the projects and planned regeneration.
In regard to the Maidenhead decision, the inspector was of the view that the scheme would bring significant benefits for the social, economic and environmental wellbeing of the town. The project plan was also sound. There was clear evidence that the scheme was viable and had the necessary funding and commitment to proceed.
Though the viability of the Barking scheme (pictured below) was a key deciding factor in the CPO not being confirmed, the inspector did find there was “national policy support, regional policy drive and strong local policy” backing the project.
No matter how compelling the case might be for a CPO and its potential to transform an area, these decisions demonstrate that if a local authority and its development partners fail to follow the CPO guidance, it is likely that the order will be rejected.
The implications of CPO refusal can be significant. It can pause, or even put an end to, regeneration proposals while incurring reputational damage and costs for those involved.
The timings of the Barking and Maidenhead decisions also point to a pattern of heightened scrutiny by inspectors, covering all contributing factors necessary to justify the use of draconian CPO powers.
With the Planning Inspectorate firing a warning shot when it comes to CPOs, local authorities and partners must redouble their efforts in ensuring that they are fully justifying the use of powers and taking all the right steps when considering and progressing a CPO.
Understanding CPOs
CPOs have historically been used by local authorities and bodies with statutory authority to acquire land needed to deliver significant development schemes that might not come forward otherwise.
Common uses are where land required for development is not on the market, or if there are issues over its ownership or with the land itself, for example due to contamination.
The golden thread running through any CPO is that it should be made to further the social, economic and environmental wellbeing of the areas that it affects. A CPO must be able to demonstrate and achieve a positive impact across these three metrics.
Before the process of planning a CPO begins, acquiring authorities and development partners must remember that a CPO is a measure of last resort.
The non-statutory compulsory purchase process and the Crichel Down Rules – the bible when it comes to CPO powers – requires that acquiring authorities demonstrate they have taken reasonable steps to acquire affected land by agreement first.
Initial offers should be made to affected landowners. Acquiring authorities must then engage constructively on relocation issues and mitigation. It is critical this is evidenced, showing meaningful and genuine attempts to negotiate with affected landowners were pursued.
Acquiring authorities must follow the guidance to the letter, observing its recommendations at all times.
Should all avenues be exhausted, and where an acquiring authority has no other choice than to consider using its powers, it can take several steps to ensure the case for confirmation of a CPO is as robust as possible, all while remaining mindful of the impact that a scheme could have on the human rights of affected landowners.
Key considerations
First, it is imperative that, wherever possible, acquiring authorities establish a consistent point of contact and project manager for a proposed CPO and resulting development. This contact must have a comprehensive knowledge of the CPO scheme and its impact on the area.
By having someone with this knowledge who also understands the needs of the local community, acquiring authorities can ensure that affected landowners have a trusted contact that they can ask questions and share concerns with. The contact can also explain the potential benefits of a regeneration project and why the CPO is being promoted.
Not only can this inspire confidence in a project, it also provides a vital personal interface. A powerful tool, especially when dealing with people’s homes and livelihoods.
This contact should sit within an acquiring authority, rather than being an external consultant. Experience proves that if an acquiring authority is serious about progressing a CPO, then having a point of contact for the local community is key to garnering support, while also minimising or responding to objections.
Meaningful investment at the outset of the CPO process can be weighed against the financial impact of an inspector deciding not to confirm a CPO, which can lead to either losing the capital put into a project up to that point, or taking on further costs through resubmission or challenge.
A genuine and in-depth consultation involving the local community is also essential.
The consultation should take place as soon as feasible, covering the planning application and development scheme, as well as referring to the proposed CPO. This provides the acquiring authority with the opportunity to explain the benefits of a project and give comfort that affected landowners, businesses and the local community will be listened to, treated respectfully and dealt with at all times in line with the requirements of statute and associated guidance.
Active consultation can also help to progress acquisitions by agreement prior to making any CPO and potentially reduce opposition at any inquiry.
To support engaging with the local community, as well as any potential inquiry involving the Planning Inspectorate, acquiring authorities must also be able to demonstrate that adequate resources are available to implement the scheme the CPO is being made to deliver within a reasonable time frame.
Even if the case for confirming a CPO is otherwise strong, lacking an up-to-date viability appraisal or substantive information on viability can prevent a CPO being confirmed, as demonstrated by the decision involving the London Borough of Barking & Dagenham.
Generally speaking, a CPO scheme may have limited viability given its very nature – they are an effective tool for delivering regeneration in the UK. Supporting reports must be up to date, with detailed explanations as to why there may be areas where the case is less strong than would be preferable.
Building a legacy
CPOs have successfully helped to drive regeneration and new investment into towns and cities across the UK.
In Liverpool, CPOs have transformed areas of the city centre, as well as opening up key transport routes, including along its northern docks. Local to me, CPOs have also been used to make way for the £34m regeneration of Blackburn’s Cathedral Quarter.
It is important to recognise that even with the best will in the world, issues may arise that impact the use of CPO powers.
By following the guidance and adopting a best-practice approach, however, acquiring authorities and their development partners can put themselves in the best position possible to make the case for justifying the use of CPO powers and, ultimately, delivering a successful regeneration scheme.
Because if a CPO is made correctly and with respect to landowners and the community, it can unlock complex sites and enable the type of development that can revitalise an area and leave a long-term positive legacy – creating jobs, homes, transport links and opportunities.
David Mathias is a planning partner at Shoosmiths
