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Levelling Up – A Compelling Case for CPO?

May 2021 saw the election of seven ‘Metro Mayors’ outside London, underlining the government’s renewed enthusiasm for devolving powers beyond Westminster as part of its ‘levelling up’ agenda.

The powers of each Mayor and Combined Authority vary but a common thread is the use of devolved planning powers to accelerate housing delivery.

For example, following the election of Tracy Brabin as the first West Yorkshire Mayor, the West Yorkshire Combined Authority (WYCA) is now able to exercise a range of housing and regeneration, land acquisition and disposal powers, concurrently with Homes England and its constituent councils. These include Compulsory Purchase (CPO) powers. Given their status as a draconian step of last resort, CPO powers can only be exercised with the consent of any WYCA authority which is hosting the proposed CPO. The powers devolved in West Yorkshire also include the possibility of designating mayoral development areas (MDCs) with additional CPO powers to support the delivery of strategic sites.

Powers to establish MDCs outside London are a relatively recent innovation having been made available to England’s first cohort of Metro Mayors in 2017.

CPO powers

In what circumstances might a Combined Authority or Metro Mayor and its partner authorities contemplate using their CPO powers?

First of all, any scheme which is underpinned by a CPO would need to have some strategic significance in the Combined Authority area. Historically, the Regional Development Agencies (RDAs) were prepared to use their CPO powers to help to deliver schemes of this magnitude. However, since the demise of the RDAs a decade ago, local authorities have often been called on to use their powers to fill the gap. This has had its drawbacks. Expertise in the use of CPO is not evenly distributed amongst authorities, and whilst some have been particularly active in this area, others have been understandably more reticent when it comes to taking what is rarely a politically popular course of action.

Secondly, there are legal complications when it comes to schemes that straddle local authority boundaries. Section 226(1)(a) of the Town and Country Planning Act 1990 (TCPA 1990) provides local planning authorities with a CPO power to facilitate the development, redevelopment or improvement of land, provided that this will secure social, economic or environmental benefits. The exercise of this power is often the best option when it comes to underpinning the delivery of major housing and regeneration schemes in line with the policy priorities of mayoral combined authorities. However, unlike the Highways Act 1980 CPO power, the TCPA 1990 does not allow an authority to ‘stand in the shoes’ of a neighbour and exercise CPO powers on its behalf. This means that more than one CPO promoted by separate authorities may be required in order to deliver a single scheme.

This presents a number of potential headaches for scheme promoters including the potential for conflicting policy agendas between partners and the need to effectively coordinate input from multiple authorities.

A mayoral combined authority CPO could be more straight forward from a procedural perspective and could also better articulate the sub-regional benefits of the proposals it underpins.

From a technical point of view, there are also potential advantages when it comes to identifying the scheme that needs to be disregarded for the purposes of CPO compensation.

As a result of the Neighbourhood Planning Act 2017, MDCs have now been placed on the same footing as new town and urban development corporations in that the whole of the designated MDC area can be disregarded for the purposes of assessing compensation. This means that MDCs are now in a better position to achieve land value capture by retaining the uplift in values across their area and using this to fund necessary infrastructure.

Strategic planning support

Any CPO activity requires the backup of a robust planning strategy.

For example, government guidance on the use of Homes England’s CPO powers stresses the need to resolve any major planning difficulties or demonstrate that there are no planning or other impediments to delivery of the proposed scheme. The equivalent guidance on Planning Act CPOs refers to the planning framework providing the justification for an order being as detailed as possible in order to demonstrate that there are no planning or other impediments to the implementation of the scheme.

Strategic planning across Combined Authority areas is very much in its infancy and presents its own challenges. The problems encountered by those promoting the Greater Manchester Strategic Framework provides a salutary lesson in the difficulties that can arise when policy and political agendas become decoupled.

On the other side of the Pennines the Explanatory Notes to the West Yorkshire Combined Authority (Election of Mayor And Functions) Order 2021 refer to the fact that strategic planning powers together with a strategic infrastructure tariff which featured in the devolution ‘deal’ with West Yorkshire have yet to be conferred. In the Explanatory Notes the government offers a commitment to provide these powers (or their equivalent) ‘once the way forward on the reforms to the overall planning system is clear’.

Given the increasing controversy surrounding the Planning Bill it may well be some time before any clarity is forthcoming. In the meantime, mayoral combined authorities may be able to learn some lessons from the trials and tribulations experienced by the Old Oak and Park Royal Development Corporation (OPDC) while promoting its local plan. 
OPDC is responsible for regenerating 650 hectares including the common land area of Old Oak Common and the industrial Park Royal site in West London and its boundary extends to the London Boroughs of Brent, Ealing and Hammersmith and Fulham. Its emerging local plan ran into difficulties during its examination in late 2019 when a planning inspector offered a preliminary view that that two allocations would be “undeliverable” and suggested a downward revision to the proposed housing targets of 20,100 homes over the next twenty years. In response, the revised plan now proposes “at least” 19,850 new homes within the local plan period. The revisions to the document also aim to ensure that the draft plan is in general conformity with the new London Plan.

The revised proposals still need to find favour with the local plan inspector but if they do then the resulting policy guidance could offer significant assistance when it comes to any future CPO activity.

Concluding thoughts

Looking ahead, there are circumstances where mayoral combined authorities may well be in the prime position when it comes to exercising powers of compulsory acquisition. They may be required as a last resort measure to deliver ‘larger than local‘ schemes which are key to achieving the priorities of the mayoral combined authority and which will have an impact beyond individual local authority boundaries. In such circumstances they may well be best placed to maximise land value capture and optimise the deliverability and sustainability of the scheme.

Whether the legal powers that are being made available to mayoral combined authorities are utilised in practice or wither on the vine will depend on the appetite of individual mayoral combined authorities to take a more interventionist approach and turn the rhetoric of levelling up into reality.

This article was first published in EG magazine on 10 July 2021.

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.

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