Rural
Spectator

Are costs being cut at the landowner's expense?

The Queen’s Speech focussed heavily on infrastructure and growth and supporting economic recovery.

She announced measures being “brought forward to create the right for every household to access high-speed broadband. Legislation will be introduced to improve Britain’s competitiveness and make the United Kingdom a world leader in the digital economy.”

Prima facie these aims echo just about every major economic and political announcement since the 2008 crash, however, hidden in amongst the positive sentiment are proposals that will have major impacts on landowners where infrastructure or telecommunications are proposed.

The Digital Economy Bill

Every UK household will have a legal right to a fast broadband connection with minimum speed of 10Mbps to be guaranteed through Broadband Universal Service Obligation, and penalties for senders of spam emails, all of which is great news for rural businesses, and residents alike.

This will be achieved through a new Electronic Communications Code aiming to cut the cost and simplify the building of mobile and superfast broadband infrastructure. These savings will include a change in the basis of compensation for land take for broadband services. These proposals change this to a ‘no scheme’ basis, already used in compulsory purchase, which entitles the landowner to the market value of the land in a ‘no scheme’ world, plus compensation for any disturbance; which all in all will equate to very little.

The Code goes on to say it consider a “fair payment” to landowners, however, the days of negotiated telecom leases at premium prices in excess of agricultural equivalent rents look like they will be a distant memory when these reforms become reality. There is no time to lose and if you are currently considering a lease creation or renewal, please contact us immediately whilst there is still room to negotiate.

Compulsory Purchase etc.

The Housing and Planning Act 2016 received Royal Assent and whilst the talked about sections generally seem to focus on starter homes and affordable housing, the Act contains changes to the compulsory purchase process and powers.

  • The right to enter and survey land: previously undertaken by agreement or after the acquiring authority had served a Notice of Entry or a General Vesting Order. Now this can be undertaken by person authorised by the acquiring authority at a reasonable time, subject to compensation for damages. Therefore early engagement and negotiation of terms pre-Royal Assent or before a decision for the Secretary of State is vital. We’ve seen this during the course of our HS2 and East West Rail work, where early engagement had led to enhanced agreements with landowners and this applies to road and rail schemes across the country. 
  • Advance payments: New time limits are set out to speed up this process, with acquiring authorities given 28 days from receipt of a request for an advance payment to confirm with the claimant whether they have received sufficient information to make a payment or request more details if not. Payments should be made within 2 months’ subject to certain conditions. 

The reform of Compulsory Purchase is tackled again in Neighbourhood Planning and Infrastructure Bill with a focus on establishing a clear, new statutory framework, for agreeing on compensation based on the fundamental principle that compensation should be based on market value of the land in the substance of the scheme.

Summary

In the Prime Minister’s words, these reforms are “to help people get on”, whether that’s the landowner or the acquiring authority in practice remains to be seen. We know that HS2 has currently spent £1.4 billion (2009/10 – Dec 2015), and with total scheme costs in excess of £55 billion, it will be landowners who feel the pinch when compulsory powers or similar are extended.

What is clear is that the mandate is to build, and early engagement at the outset of any proposals affecting your land will be key to enable negotiation by agreement where possible, and thereafter compiling a comprehensive claim.

To discuss the impacts of these proposals on your farm or business please don’t hesitate to contact Vicky Phillips.

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