The law of compulsory purchase and compensation was introduced at the start of the industrial revolution to aid the construction of railways and canals. Until recently it had changed very little and many of the old statutes are still in force. Over the years there have been calls for root & branch reform and in 2003 the Law Commission produced a report outlining comprehensive reform. This was shelved by the Labour Government at the time as being too difficult to implement. In more recent times the government has recognised that compulsory purchase is a tool to help them “get things done” and the Treasury in particular is keen to introduce reforms , a number of which have just come into law in the Housing and Planning Act . Yet more are now proposed in the Neighbourhood and Planning Bill. Striking a balance between the interests of the state and the rights of the individual are never more sharply contrasted than in compulsory purchase.
For many years successive governments have sought to stimulate investment in various parts of the country by providing grant funding to cover the gap on marginal schemes to kick start investment in deprived areas, sometimes with help from the EU. This is at the heart of regeneration and the thinking behind this investment was that it would encourage other businesses to invest alongside the “flagship” investment so that not only did the area benefit from the initial investment but there was a ripple effect in the surrounding area as it began to “regenerate”. Many of our towns and cities have benefitted from this positive planning policy.
However there is a new line of thinking coming over the horizon, led by the Treasury who are looking for value for money in return for the expenditure now being contemplated by government in major infrastructure projects in the UK. Where there is, for instance, a major infrastructure upgrade at say a station, then the effect may be to increase land values in the immediate vicinity in response to this investment. At present the landowner benefits from this uplift and can realise it when selling his land to a developer. The latest thinking is that local planning authorities could follow the infrastructure upgrade and compulsorily acquire key land for development but pay a level of compensation which ignores this uplift. It remains to be seen whether this new approach will encourage regeneration or whether land around transport hubs may be blighted as developers wait to see whether or not a local planning authority will proceed with a “complimentary scheme”. Hope value may in future take on a whole new meaning.