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The Compulsory Purchase Association

The Compulsory Purchase Association. Compulsory Purchase and Compensation in the United Kingdom. 1845 to 2010. Compulsory Purchase = the taking of a person or company’s land by compulsion Compensation

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The Compulsory Purchase Association

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  1. The Compulsory Purchase Association

  2. Compulsory Purchase and Compensation in the United Kingdom 1845 to 2010

  3. Compulsory Purchase = the taking of a person or company’s land by compulsion • Compensation = the monetary recompense (usually!) that person or company receives for its interest in the land and for the disruption caused to its affairs

  4. England/Wales/Scotland/ Northern Ireland • Some differences in law and legal systems • The English system • Terms and jargon – 19th Century roots • Compulsory Purchase, Compensation, Blight, Material Detriment, Severance and Injurious Affection, Betterment, Disturbance • Dispute Resolution – Lands Tribunal

  5. Two Sources of Compulsory Purchase Power • Combination of general and specific Acts of Parliament • Government level (Federal level) = an Act of Parliament • County/local authority level – (State level) = a Compulsory Purchase Order

  6. Compulsory Purchase Orders – the uses • Transport – roads, railways and airports • Planning – regeneration and housing • Energy – electricity, gas and oil • Government facilities – education, defence

  7. The Fundamental Principles • No compulsory purchase without a “compelling case in the public interest” • Burden of establishing this lies with the acquiring authority

  8. The Stated Policy • CPO powers are an important tool for local authorities and other public bodies to use as a means of assembling the land needed to help deliver social and economic change • Used properly they can contribute towards effective and efficient urban and rural regeneration

  9. …..therefore • Bodies possessing compulsory purchase powers are therefore encouraged to consider using them pro-actively wherever appropriate to ensure real gains are brought to residents and the business community without delay

  10. but…… • The confirming minister must • Take a balanced view between the intentions of the acquiring authority and the affected landowner • Be satisfied that the acquiring authority has made out a compelling case that justifies the taking of another’s land • Be satisfied that what the acquiring authority intends to do with the land once acquired WILL be done within a reasonable timescale

  11. The CPO process • Acquiring authorities should always seek to acquire by negotiation - CPO a last resort – but use ‘in parallel’ is encouraged • Provide full information about the scheme, CPO process and timetable • They can make a CPO and negotiate simultaneously

  12. The Stages in the CPO process • A CPO is ‘made’ – but at this stage it has no force • A Public Inquiry is held – an independent Inspector examines the justification for the CPO and the basis of objections to it • The Inspector reports and makes a recommendation to the appropriate central government Minister of State • The Minister confirms or modifies the Order – but the Minister can also reject it • The CPO is ‘confirmed’ – at this stage it has force

  13. Recent Changes • 2008 - Infrastructure Planning Commission • Fast track process12 – 18 months for obtaining Planning and CPO • LHR T5 - 19 years proposal to opening – 4 year Public Inquiry 1995 to 1999 • Nuclear Power, Wind Farms, Railways, Roads, Waste etc • National Policy Statements/Developemnt Consent Orders • Curtailed Public Inquiry

  14. Recent CPO Activity • The Channel Tunnel Rail Link – High Speed One • Highbury – Arsenal FC • The 2012 Olympic Games • Crossrail • High Speed Two

  15. British train speed record

  16. High Speed One • The UK had some ambivalence about being ‘joined’ to France but…. • The Channel Tunnel opened in 1994 – high speed rail links to Paris opened at the same time • The next stage was to connect to London • Acquisition process for HS1 started in 1995 • Powers obtained in 1996 • 62 miles tunnel portal to St Pancras London

  17. High Speed One cont’d • A Private Finance Initiative – Public Private Partnership • Financing difficulties in 1997 delayed start and project split into section 1 (Channel Tunnel to North Kent) and section 2 (North Kent to Central London) • Section 1 completed 2003 Section 2 completed 2007 • Line also used for fast commuter trains but as yet no freight • $10bn – on sale for $2.5bn

  18. High Speed One – problems! • Farmers! • Tunnels • Statutory Undertakers • Finishing the job

  19. Arsenal Football ClubHighbury, London • CPO powers sought for what objectors to the scheme claimed was the use of compulsory purchase powers to assist the development aspirations of a private company

  20. A lesson in how to find a development site in London!

  21. The 2012 Olympics • Major 500 acre+ regeneration site East London • $12bn cost (4x original estimate) • 52 electricity towers removed – tunnel • Huge remediation • CPO implemented in 2007 - $1.5bn cost of acquisitions 800+ businesses displaced • Linked to HS1 – javelin trains (Japanese) 7 minute journey time St Pancras to Stratford

  22. 2012 Olympic Games

  23. 2012 Olympic Games • Problems with relocating ‘bad neighbour’ users • Wrong time in property cycle • Planning issues • Compensation costs circa $1.5bn

  24. Crossrail 2008 • The implementation of an old idea -- a fast rail link crossing London from East to West • 1836 – Robert Stevenson scheme • 1991 – ‘East-West’ scheme • 2005 – Crossrail Bill • 2008 - Acquisition of land begins

  25. Crossrail Crossrail Act 2008 • Funding - $20+ bn • Private/GLA/Government with a business rates levy

  26. Crossrail – issues. • Very high value property • ‘Wrong’ time in the cycle • Hugely disruptive work sites in central London • Interaction with Olympics • Completion 2017??

  27. High Speed 2 • London to Birmingham – stage 1 • Then (perhaps) Birmingham to Manchester – Leeds – Glasgow and Edinburgh • $50bn • Very early stages - completion 2035 • Blight issues – hardship schemes - huge opposition from wealthy residential areas - The Chilterns

  28. HS2 - Route

  29. Energy – Offshore Wind Cable connections to National Grid250 turbines 750 mgw 10 miles offshore - $3bn5 mile connection to GridCPO nominal compensation + disturbance + injurious affection

  30. Energy Underground Gas Storage • UK used to rely on North Sea • Now vulnerable to winter shortages • Need for massive increase in storage capacity • Saltfleetby CPO 2009 • 750 interests • Connection to gas grid

  31. Compensation Valuations Market value/willing parties/no scheme world Valuation date Equivalent reinstatement Comparables v development appraisal/residual

  32. A Statutory Basis for Valuation • Land Compensation Act 1961 • 6 statutory ‘Rules’ set out in the Act to govern the principles to be applied • 2 specific valuation ‘Rules’

  33. Market value • Rule 2 • ‘The value of land shall, subject as hereinafter provided, be taken to be the amount which the land if sold in the open market by a willing seller might be expected to realise’

  34. Equivalent reinstatement Rule 5 ‘Where land is, and but for the compulsory acquisition would continue to be, devoted to a purpose of such a nature that there is no general demand or market for land for that purpose, the compensation may, if the Lands Tribunal is satisfied that reinstatement in some other place is bona fide intended, be assessed on the basis of the reasonable cost of equivalent reinstatement’

  35. Dispute resolution • Statutory referral to Lands Tribunal (Upper Tribunal – Lands Chamber) – Court of Appeal – Supreme Court • Alternative Dispute Resolution – Mediation Early Neutral Evaluation • Fees and costs

  36. The Reform Agenda • Planning Assumptions • Advance Payments • Compensation when no land is taken • Loss Payments

  37. Reliance on case law from around the world! • 1901 : Zanzibar – Railway construction Secretary of State for Foreign Affairs –v- Charlesworth • 1914 – Canada – Hydro-electric power Cedar Rapids Co –v- Lacoste • 1917 – Canada - Hydro-electric power Fraser –v- Fraserville City • 1939 – India – Harbour construction Vyricherla Narayana Gajapatiraju –v- Revenue Divisional Officer Vizigapatam

  38. And yet more!! • 1947 -Trinidad : Naval base construction Pointe Gourde Quarrying & Transport Co Ltd –v- Sub-Intendent Crown Lands • 1979 – Australia – Shopping centre Melwood Units Otd –v- Main Road Commissioner • 1995 – Hong Kong – New town Director of Buildings and Land –v- Shun Fung Ironworks Ltd • 2002 – Wales – Replacement wildlife ‘wetlands’ Waters –v- Welsh Development Authority

  39. Lessons to be learnt • Population densities people per square mile Japan – 873 UK – 659 USA – 82 Canada – 9 • Different countries, different challenges but common experiences and issues!

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