How to achieve balance with compulsory purchase orders
January 31, 2025
An introduction to the changing and complex landscape of compulsory purchase orders
A new government always comes with fresh ambition and great expectations. In the case of Sir Keir Starmer’s administration, the objective clearly is growth—from housebuilding to critical energy and transport infrastructure. So, pressure is building to show how it can be delivered.
This is one reason why compulsory purchase orders (CPOs), and Labour’s potential reforms to them, are hot topics. So, what are compulsory purchase orders, and why are they important?
Compulsory purchase orders are tools that allow certain organisations to acquire land or property without the consent of the landowner. The process can be essential to the delivery of projects such as infrastructure and large-scale regeneration. At times, it’s also viewed as severe. Some consider compulsory purchase orders threatening to property rights that are deeply rooted in English law.
CPOs are a vital mechanism to support growth and infrastructure development.
As advisors to both CPO promoters and landowners, our teams are in a unique position to consider the ongoing reform of the CPO process.
The government has promised to deliver vital infrastructure and new communities across the country. Here, I’ll go over the changing CPO landscape and the checks and balances to consider.
The road to reform for the CPO process
Labour has committed to reforming CPO regulations. Stories of high CPO payouts to landowners are often part of claims that our country overspends on major projects. This leads some to blame the process for rising costs. The Labour government—with its mission to get building and ‘plan for change’—has targeted the current system of CPO compensation as a potential block to development.
The compensation paid to a landowner for compulsorily purchased land must reflect its value as if it had been sold on the open market by a willing seller. Historically, this takes into account value stemming from the prospect that planning permission is granted on the land in the future. This is often referred to as ‘hope value’.
Recent regulations have been laid out that change hope value. Both the Land Compensation (Additional Compensation) (England) Regulations 2024 and New Towns (Compulsory Purchase of Land) (Amendment) Regulations 2024 came into force in October last year. The new regulations limit hope value if the land is acquired for affordable housing, healthcare, or education facilities.
The CPO process must be both clear and comprehensive.
Despite the regulatory change and amendments to government guidance on compulsory purchase orders, reform of the process will not be a quick fix. Nor should it be my view. The Law Commission, supported by the Compulsory Purchase Authority (CPA), has been conducting a review of CPO law since early 2023. It is ongoing. In my opinion, Government should engage closely with the commission and CPA to understand what progress has already been made. The goal? To avoid destabilising a finely balanced process.
Streamlining solutions around compulsory purchase orders
There may be some areas of low-hanging fruit that Labour’s reforms could look to. One of the current challenges of compulsory purchase orders is just how many different powers there are to choose from. There are scores of powers available via different Acts and pieces of guidance stretching back to the 1980s and beyond. These include the Land Compensation Act (1961), the Highways Act (1980), and, more recently, the updated Compulsory Purchase Guidance (2024). As we consider the the nuances and contexts of these powers and supporting, there is a strong argument for unifying or simplifying them. This would benefit all parties—as it would make the process more accessible, both for those looking to exercise the power and for those who want to scrutinise it.
A further way to streamline the CPO process is to increase education and awareness of good practice. Promoters looking for a swift CPO need to get everything right the first time—and this can be easier said than done without the right advice. Objectors and opponents will invariably be looking for chinks in the armour—so the demonstration of a ‘compelling case in the public interest’ needs to be flawless.
Making a complex process simpler is a worthy goal. Yet this must not mean the dilution of the vital checks and balances.
A CPO case must be clear and comprehensive. It must show how the public benefits outweigh the interference on people’s lives and property rights. It must demonstrate that the scheme is deliverable and any financial or technical obstacles have been addressed. Issues can also arise with the definition of the boundary of a scheme or CPO. If engineers or designers step in first to define the boundary, this may not align with the eventual planning definition. We can see inconsistencies easily undermine the process.
It is essential to get the details right, looking ahead at potential issues, and understanding the questions to ask. Attention to detail was at the centre of a successful CPO promotion we supported at Warrington Bridge Street Quarter. It was a complex site of multiple landowners, with an important heritage context, and different boundaries between the scheme and the land needed to construct it. Representations to the council and extensive policy research were vital for the due-diligence process. It meant that the case for the CPO could be as detailed and robust as possible.
We must increase awareness and understanding of good CPO practice.
Improving the process with care
Labour may find CPO reform a tangle of conflicting interests and questions around infringements on fundamental rights. To avoid the risk of unbalancing this fine-tuned process, the answer may be simply to increase awareness of the complexity of compulsory purchase orders. And then to encourage careful and expert guidance through the process.
Making a complex process simpler is a worthy goal. Yet this must not mean the dilution of the vital checks and balances honed over decades to protect us all.
If you want to know more about compulsory purchase orders and our role for both landowners and promotors, please get in touch.