Question to the Department for Levelling Up, Housing & Communities:

To ask the Secretary of State for Housing, Communities and Local Government, what plans he has to reform compulsory purchase orders compensation rules to ensure that a larger proportion of the value uplift created by residential planning permission can support affordable housing, infrastructure and remediation.

Through the Housing and Planning Act 2016 and the Neighbourhood Planning Act 2017, MHCLG has introduced a substantial package of reforms to make the compulsory purchase process clearer, fairer and faster for all.

Compulsory purchase can be an important tool for assembling land needed to help deliver a range of development, regeneration and infrastructure projects. However, it must be recognised that the expropriation of private property interferes with the rights of those whose land is taken. As such, there must always be a compelling case in the public interest to justify the use of compulsory purchase powers and compensation must be fair.

The overriding principle of compulsory purchase compensation is ‘equivalence’, so that an owner is left neither better nor worse off (at least in monetary terms) as a result of their property being compulsorily acquired. Compensation is based on the open market value of the interest acquired, in the absence of the scheme (for example, regeneration project or railway line) underlying the compulsory purchase order. This is known as the “no scheme principle”. Under the no-scheme principle, any increases or decreases in the value of the land attributable to the scheme of the acquiring authority, or the prospect of the scheme, are disregarded when assessing compensation.