The focus on the Levelling Up agenda and the availability of grant funding, means there are numerous important regeneration schemes actively being pursued across the country. With ever-escalating project and building costs, in many cases, applications that were made for grant funding were based on costs contingencies that have already been exceeded.
The focus on the Levelling Up agenda and the availability of grant funding, through the Towns and Future High Street Funds, means there are numerous important regeneration schemes actively being pursued across the country.
Inevitably, challenges in the land assembly process mean that many of these schemes will require local authorities to utilise their statutory powers to compulsorily acquire land.
With ever escalating project and building costs, one issue that we are increasingly facing when supporting local authorities through the Compulsory Purchase Orders (CPO) process, is how to demonstrate sufficient funding when seeking to secure an CPO.
In many cases, applications that were made for grant funding were based on costs contingencies that have already been exceeded.
As set out in the Department for Levelling Up, Housing and Communities guidance on ‘Compulsory Purchase and the Crichel Down Rules’, a CPO should only be made where there is a compelling case in the public interest.
When considering the justification for a CPO, the Inspector at any inquiry (and ultimately the confirming Minister) will assess whether sufficiently compelling reasons have been made for the land to be acquired at that point in time.
A lack (or potential lack) of funding is a clear risk to a scheme being delivered – this risk then must be weighed up as part of the justification for the CPO, and against the forcible acquisition of private property interests.
Where costs are likely to, or have already, outstripped contingencies, there is a real risk of CPO’s not being granted on the basis that schemes may not be delivered.
There are several practical steps that authorities may wish to consider taking to support its case in the Statement of Reasons:
Practically, it also worth noting the importance of any timing restrictions on grant funding. Securing a CPO is a lengthy process, and so authorities need to be clear on delivery timescales to ensure the land can be secured and practical delivery achieved prior to any funding deadlines.
The Levelling Up and Regeneration Bill sets out a series of changes to the CPO process, with the aim of making it faster and more efficient to secure an CPO.
One of the proposed changes is the ability to secure a conditional confirmation of a CPO. This would potentially allow a local authority to secure the principle, without having full funding or planning in place - providing certainty on land assembly at a much earlier stage of the project timetable.
Whilst we will need to see more detail on this as it emerges through the consultation responses and secondary legislation, moving into the future, this may be attractive proposition for local authorities on projects which have funding uncertainties.
But for now, authorities must continue to ensure that they have robust funding evidence, to ensure the risk of spiralling costs does prevent CPOs being secured.
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