COMPULSORY PURCHASE AND THE CHANGING FACE OF

INFRASTRUCTURE PROJECTS

Margaret Thatcher famously said “you and I come by road or rail, but economists travel by infrastructure.”

In her speech at the State Opening of Parliament last year, Her Majesty The Queen focused a great deal on the role of infrastructure in supporting economic recovery.

She announced the Government’s plans to create, “the right for every household to access high speed broadband” and declared that, “legislation will be introduced to improve Britain’s competitiveness and make the United Kingdom a world leader in the digital economy”.

However, hidden within this positive sentiment are proposals with the potential to have a major impact on owners of land affected by physical or digital infrastructure or telecommunications schemes, which must be of concern to those who will be affected.

Since the Brexit vote, The Queen’s announcements have gained extra momentum. They are being enthusiastically championed by the new-look Conservative government whose intention is to invest in all forms of infrastructure to grow the economy.

This enthusiasm to speed up the process to acquire land for such infrastructure, to kick start the economy, is likely to be at the landowner’s expense.

We can see that the Government is putting its money where its mouth is by simply looking at a few of the most recent infrastructure schemes that are being promoted:

  • Heathrow

After a 50-year debate, October 2016 saw the Government announce its backing for a third runway at Heathrow Airport. The planning process could be achieved for this expansion as early as 2021 – remarkable when the public inquiry alone lasted four years for Terminal 5.

  • HS2

One of the largest infrastructure projects of modern times; Phase1 received Royal Assent in February; the hybrid bill first being read in November 2013. The next stages of the project (Phases 2 and 2a) running north of Birmingham are now very firmly in the public domain.

  • East West Rail and the Oxford-Cambridge Expressway

These projects will link the two famous university cities; something that the Government believes will drive the booming economies in these regions.

 

At the same time as these announcements, reforms to compulsory purchase legislation to quicken the process make their way through parliament:

  • The Housing and Planning Act 2016 gives the acquiring authority the right to enter and survey land at an early stage, and gives provision to speed up advance payments to landowners.
  • The Neighbourhood Planning Bill 2016  promises to provide land for housing with greater certainty (thereby speeding up delivery) and contains various provisions relating to compulsory purchase, including the right to temporary possession in certain circumstances. e.g. for a construction compound or environmental mitigation works.

As part of these reforms, we expect clarification of  the definition of Market Value and how this relates to the principles of compensation in the “no scheme world”. We may also see the abolition of the Bishopsgate Principle, whereby compensation for business tenants is assessed assuming the lease will end at the earliest possible date.

 

Digital infrastructure projects

If it becomes law, the Digital Economy Bill 2016 will ensure that every UK household will have a legal right to a fast broadband connection with a minimum speed guaranteed through a new broadband Universal Service Obligation (USO).
This will be achieved via a new Electronic Communications Code, which regulates the relationship between electronic communications network operators and
site providers.

 

The Government has tabled a number of reforms to the Electronic Communications Code to:

  • cut the cost, and simplify the building, of mobile and superfast broadband infrastructure
  • change the compensation for land taken for broadband services to an existing use basis which entitles the landowner to the market value of the land in a ‘no scheme world’, plus compensation for any disturbance – which in an agricultural context equates to very little.

 

While the new Electronic Communications Code says it will consider a ‘fair payment’ to landowners, the days of negotiated telecom leases at premium prices in excess of agricultural equivalent rents look set to become a distant memory.

Changes to regulations will change the compensation for land taken for broadband services to a ‘no scheme’ basis, plus compensation for any disturbance – all of which equates to very little.

 

What can you do to protect your interests?

The Government’s mandate is to build, and it is doing just that. If you’re a landowner or occupier, be alert to the changing legislative landscape and how it may impact you. If you are affected by a project, it pays to get involved from the earliest stages, before the compulsory powers kick in.

Our experience on HS2 has shown that discussion and petitioning can achieve changes to a scheme, and addressing practical issues at the start can significantly reduce a project’s impact.

 

Get involved from the earliest stages of a project, before the compulsory powers kick in. 

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