Key considerations when making the case for justifying the use of CPO powers

The recent decision of an Inspector to reject confirmation of a compulsory purchase order (CPO) sought by the Royal Borough of Windsor & Maidenhead Council is a key reminder of the need to use CPO powers only as a matter of last resort and to be mindful of the impact of a proposed scheme on the human rights of affected landowners. 

The decision is hot on the heels of the decision on the Barking town centre CPO, which also gave those involved in regeneration a recap on how to ensure the case for confirmation of a CPO is as robust as possible.

CPO guidance

The non-statutory guidance on compulsory purchases and the Crichel Down Rules 2019 is the bible for all of those promoting a CPO. It provides that acquiring authorities are required to demonstrate that they have taken reasonable steps to acquire affected land by agreement, expressly stating that compulsory purchase should only be used as a last resort. 

The guidance goes on to state that reasonable initial offers should be made to affected landowners and acquiring authorities should engage constructively with those parties about relocation issues and mitigation. Acquiring authorities should also be able to evidence that meaningful and genuine attempts to negotiate with affected landowners have been pursued.

Decision

On 3 January 2022 an Inspector appointed by the Secretary of State for Levelling Up, Housing and Communities, issued its decision letter stating that it had determined not to confirm the Royal Borough of Windsor & Maidenhead Council’s CPO. The CPO had been made in order to facilitate the regeneration of Maidenhead town centre to provide a comprehensive mixed use development.

The Inspector found that there was local planning policy support for the regeneration of Nicholsons Shopping Centre and the surrounding area in Maidenhead town centre. 

The scheme benefitted from planning permission and the existing provisions in the town centre were deemed to be “mediocre” and to have “a negative effect on the town centre’s character and appearance, and the ability of users to move freely around the town centre”. 

The Inspector was of the view that the scheme would bring significant benefits for the social, economic and environmental wellbeing of the town. There was clear evidence that the scheme was viable and had the necessary funding and commitment to proceed, which were the factors that weighed in favour of confirmation of the CPO.

Reasons for refusal

Despite the acknowledged public benefits, the Inspector decided against confirming the CPO.

The Inspector was critical of the acquiring authority and its partners failing to pursue meaningful negotiations with the Page family, the owners and operators of Smokeys Nightclub, which is located within Nicholsons Shopping Centre. 

Smokeys is a family business spanning two generations and the family holds a lease over the premises which, if compulsorily acquired, would likely result in the extinguishment of the business. The Inspector determined that the closure of the nightclub would interfere with the human rights of the landowners and have a detrimental impact both financially and psychologically on the family.

The affected owners evidenced that the nightclub is a key entertainment centre for the town which played a pivotal role in supporting the needs of the LGBTQ+ community through regular events and provided young people within the community with employment opportunities. This led the Inspector to conclude that efforts should have been made to retain or relocate the business within the vicinity - if this was not done, the loss of Smokeys “would have a significant adverse impact extending beyond the direct effects on the business itself and its owners, including on customers, staff and performers”.

The Inspector was clear that the acquiring authority and its partners had failed to show that compulsory purchase was being proposed as a last resort in accordance with the CPO guidance as a result of a lack of:

  1. constructive engagement with the affected landowners; and
  2. genuine willingness to explore alternative relocation options including within the proposed scheme.

In this case, discussions in relation to the scheme began in 2017, but prior to February 2020 the Page family had only received one approach from the acquiring authority and its partners resulting in one meeting and one email. 

No attempt had been made to acquire Smokeys lease by agreement and there was a failure to show any interest to do so. One potential relocation property had been suggested to the family, but with little consideration for the requirements of the business. Correspondence to the Page’s from the acquiring authority and its partners were “perfunctory, to the point of being curt” and no meaningful or genuine attempt had been made to acquire the family’s interest by negotiation.

From February 2020 to March 2021, further relocation sites were suggested to the family which were determined to be unsuitable by the Page’s and the acquiring authority’s partner sought the family’s agreement to surrender their lease in return for statutory compensation and a financial premium, but this was not taken up. 

Following this, the acquiring authority’s property company proposed relocating Smokeys to a ‘flexible use’ unit within the scheme. The family requested further details including the configuration, measurements, more detailed plans and whether a legally compliant outdoor smoking area, which could also double as a ‘break-out’ space could be accommodated. Not all this information was forthcoming and it was only in July 2022 that the Pages were informed that the smoking area could not be provided. 

The family was also made aware that the business would be unable to trade for a period of 18-24 months between when vacant possession would be required of their existing premises and the new unit being available for occupation. At no point previously had the family been made aware of this.

As a result of the acquiring authority’s actions, the Inspector determined that the public benefits of the scheme did not outweigh the adverse impacts on Smokeys, its owners and the town, in particular the interference with the Page’s human rights as a result of the likely extinguishment of Smokeys if the CPO were confirmed.

Takeaways

There are some clear take home messages to be learned in terms of the level of engagement that the Planning Inspectorate expects from acquiring authorities and ensuring that all avenues have been exhausted before seeking to use compulsory purchase powers.

A CPO is a measure of last resort, and an acquiring authority must demonstrate that they have taken reasonable steps to:

  • engage constructively with affected landowners.
  • explore alternative relocation options including within the proposed Scheme, and if necessary, should consider taking steps to amend the scheme in order to accommodate businesses that may be extinguished should the CPO be confirmed.
  • consider ways to limit the impact of the CPO on the human rights of affected landowners.

The near consecutive timing of the decision to that in Barking points to a pattern of heightened scrutiny by Inspectors of all the contributing factors in the case justifying confirmation of a CPO.

Acquiring authorities must not simply pay lip service to the non-statutory guidance, rather care should be taken to observe its recommendations to the letter as far as possible to avoid the reputational damage and cost impacts a refusal to confirm a CPO can have on regeneration proposals.  

On the other hand, objectors and affected landowners will be poring over the information provided by acquiring authorities in support of a CPO and will have even more leverage when seeking to negotiate the best possible outcome, minimising the impact the scheme will have on their interests.

Disclaimer

This information is for educational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. © Shoosmiths LLP 2024.

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