I am today publishing a consultation on reforms to the compulsory purchase process and compensation provisions in England and Wales.
The Government are determined to achieve our hugely ambitious plan for change milestones of building 1.5 million safe and decent homes and fast-tracking 150 planning decisions on major infrastructure by the end of this Parliament.
To support the delivery of a range of development, regeneration and infrastructure projects in the public interest, we need to make better use of underutilised land across the country. We know that many local authorities share this objective, but their plans are all too often frustrated by onerous barriers to land assembly, complex purchasing processes, and unrealistic compensation expectations on the part of landowners. The result is significant amounts of developable land that remains unused and overpriced.
In our 2024 general election manifesto, the Government committed to further reforming compulsory purchase compensation rules to improve land assembly, speed up site delivery, and deliver housing, infrastructure, amenity, and transport benefits in the public interest. We promised to take steps to ensure that for specific types of development schemes, landowners are awarded fair compensation rather than inflated prices based on the prospect of planning permission being granted on the land in the future—known as “hope value”.
The eight-week consultation that we are launching today is the next step in fulfilling this commitment. Building on the Government’s 9 September commencement of regulations that enact the Levelling-up and Regeneration Act 2023 power to remove “hope value” from the assessment of compensation in compulsory purchase cases by directions where justified in the public interest, the consultation proposes new reforms to the process for compulsorily acquiring land without hope value compensation through general directions on certain types of sites that deliver clear benefits in the public interest.
The objective is twofold. First, to make the compulsory purchase process faster and more efficient so that acquiring authorities are incentivised to make use of it where appropriate. Secondly, to enable more land value to be captured where justified in the public interest and then invested in schemes for public benefit.
The consultation also seeks views on broader reforms to ensure the balance of the assessment of compensation awarded to landowners is fair, both to speed up decisions on compulsory purchase orders and to reduce the administrative costs of undertaking compulsory purchase.
Through this consultation, we want to understand better how the proposed reforms would operate in practice and how successfully they would deliver on our objectives of streamlining the compulsory purchase process and bringing forward much needed development including for housing, regeneration and infrastructure.
Subject to feedback to this consultation, we intend to bring forward measures in the planning and infrastructure Bill to implement the changes.
I look forward to continuing to work with all those with an interest in improving the compulsory purchase process and compensation regimes to make sure our reforms are robust and deliverable.
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