Compulsory Purchase Reform: Consultation Responses Summary

8. Compensation

Value of land acquired

Question 65: Do you agree that compulsory purchase compensation in Scotland should continue to be based on the principle of equivalence? If not, please explain your reasons.

Respondent categories	Yes	No
Active travel	0	0
Community land and development	3	0
Energy	4	0
Estates and agriculture	3	0
Heritage and architecture	3	0
Housebuilding and development	3	0
Housing and empty homes	3	1
Individual	18	2
Legal	3	0
Local authority	17	0
Other compulsory purchase	1	0
Other public sector	4	0
Planning and regeneration	2	1
Surveying, valuation and agents	2	1
Totals	66	5
Percentage	93%	7%

Seventy-one respondents answered this question and 50 offered comments. In response to the closed question, 93% agreed that compensation should continue to be based on the principle of equivalence. However, a substantial number of the comments disputed whether the current system effectively delivers equivalence. These were equally divided between those who felt it pays too much, and those who felt it pays too little.

A third of the comments agreed that the principle of equivalence should remain in its present form. They viewed it as being fair and well understood. One respondent commented that equivalence was important to maintain good relationships with landowners and avoid disputes and delays in the system.

Several respondents considered that the current system does not provide full compensation for all the impacts of compulsory purchase on the landowner. Some believed that this was due to the need to refer disputes to the Lands Tribunal for Scotland (LTS), and recommended that the costs and delay of doing so should be taken into consideration.

Views were quite sharply divided whether compensation should take account of “hope value” and the extent to which doing so is consistent with the equivalence principle. Several respondents, including most of those in the house building and development group, explicitly supported its retention, saying that it was fundamental to fairness. Others stated that compensation should not include the value of potential future development, taking the view that this would make it easier to implement projects in the public interest. Other respondents, mainly from the housing and empty homes grouping, recommended provisions to ensure that owners were not rewarded for leaving property vacant or neglected.

A few respondents noted that separate provision would need to be made to ensure appropriate compensation for temporary possession or for conditional CPOs, where value could change as a result of conditions being met.

Question 66: Should compensation for land acquired compulsorily continue to be based on an assessment of its market value (disregarding increases/decreases attributable to the CPO scheme)? Please note that the following questions consider potential exceptions to this approach.

Respondent categories	Yes	No
Active travel	0	0
Community land and development	1	2
Energy	3	0
Estates and agriculture	3	0
Heritage and architecture	4	0
Housebuilding and development	7	0
Housing and empty homes	0	2
Individual	18	2
Legal	4	0
Local authority	17	0
Other compulsory purchase	1	0
Other public sector	3	0
Planning and regeneration	3	1
Surveying, valuation and agents	4	0
Totals	68	7
Percentage	91%	9%

Seventy-five respondents answered this question, and 91% agreed that compensation for land should continue to be based on market value. However, as with the previous question, the comments revealed differences of opinion on how market value should be defined and assessed. None of the respondents who answered “no” gave comments.

There were 29 comments. Almost half of these simply agreed that market value should continue to be used, with some specifically endorsing the “no scheme” principle. As with the previous question, several respondents expressed their support for “hope value” being retained as a component of market value, while others said it should be excluded in relation to empty homes or land acquired for affordable housing, to make projects more viable. Energy companies suggested there was a need for a different basis of compensation, related to actual impact, for temporary possession required for the transport of wind turbine parts (“oversail and pinch points”).

Question 67: Should acquiring authorities have the power to request that, for a specific CPO, compensation would take no account of the prospect of planning permission being granted for alternative development? It would be for Scottish Ministers to make the decision when confirming the CPO.

In what circumstances do you think this approach would be justified?

Respondent categories	Yes	No
Active travel	0	0
Community land and development	2	1
Energy	1	2
Estates and agriculture	0	3
Heritage and architecture	2	2
Housebuilding and development	0	6
Housing and empty homes	3	0
Individual	3	13
Legal	1	0
Local authority	14	3
Other compulsory purchase	0	1
Other public sector	1	0
Planning and regeneration	3	0
Surveying, valuation and agents	1	3
Totals	31	34
Percentage	48%	52%

Sixty-five respondents answered the closed question. While the overall response was equally divided, there were sharp differences between categories. Local authorities, housing and empty homes and planning and regeneration bodies had a strong majority in favour of a power to ignore the potential for alternative development in calculating compensation, while individuals, estates and agriculture and housebuilding and development categories were strongly opposed.

Fifty-seven respondents commented on this issue. Half of the comments were in favour of the proposal, and gave a wide range of reasons or circumstances in which alternative development should be discounted. Some felt that “speculative” or “hypothetical” development value should be routinely excluded, on the basis that it inflates land prices unrealistically, rewards inactive land ownership and hinders development that is in the public interest. Proposals for circumstances where no account should be taken of hope value included:

• the property is an empty home or has been allowed to deteriorate
• the value of the owner’s remaining land will benefit from the scheme to which the CPO relates
• the site is allocated in the local development plan for specific use
• the CPO is used to provide affordable housing or other development with significant public benefit
• the CPO is to accelerate town centre regeneration plans or to address the sport, recreation and well being needs of a community

A third of comments opposed the proposal. Many of these simply said it would be unfair and/or would not deliver equivalence. Some mentioned potential conflict with ECHR requirements, or greater risk of disputes and legal challenges, which would increase the cost to the acquiring authority and could cause delay. Some also viewed hope value as an intrinsic element of market value and necessary to the effective functioning of land markets.

Several respondents considered that there could be grounds for excluding hope value in exceptional circumstances, whether they answered yes or no to the closed question. They called for clear definitions and tests for such exceptions.

Question 68: Should the no-scheme principle be codified in the legislation?

Respondent categories	Yes	No
Active travel	0	0
Community land and development	3	0
Energy	3	0
Estates and agriculture	0	1
Heritage and architecture	2	0
Housebuilding and development	3	0
Housing and empty homes	2	0
Individual	11	2
Legal	3	0
Local authority	18	0
Other compulsory purchase	1	0
Other public sector	1	0
Planning and regeneration	3	0
Surveying, valuation and agents	4	0
Totals	54	3
Percentage	95%	5%

Of the 57 responses to the question, 95% agreed that the no-scheme principle should be codified. Since there was no comment box for this question in the online questionnaire, the comments made in email responses have been combined with those under the following question, as they generally addressed similar points.

Question 69: If the no-scheme principle is codified, do you agree with the outline proposal at paragraph 8.39? Are there any other matters that would need to be addressed?

Respondent categories	Yes	No
Active travel	0	0
Community land and development	2	0
Energy	2	1
Estates and agriculture	1	0
Heritage and architecture	2	0
Housebuilding and development	2	0
Housing and empty homes	2	0
Individual	10	2
Legal	3	0
Local authority	17	0
Other compulsory purchase	1	0
Other public sector	0	0
Planning and regeneration	3	0
Surveying, valuation and agents	3	0
Totals	48	3
Percentage	94%	6%

Fifty-one respondents answered this question, of whom 94% agreed with the outline proposal for codifying the no-scheme principle.

The majority of the comments were supportive of the proposed codification of the no-scheme principle, with many saying that it would provide helpful clarity and potentially reduce disputes. However, others expressed concern that careful drafting would be necessary and there was a risk of introducing additional complexity. One pointed to the repeated amendment of the provisions in England; another suggested that guidance would be preferable to ensure it remains current.

Respondents raised various points about what should be included in the legislation, particularly in relation to the definition of “the scheme” and the treatment of linked or overlapping works. Some recommended further consultation on the detail. A few respondents took the opportunity to reiterate their views on the inclusion or exclusion of hope value.

Question 70: Should the planning assumptions be repealed and re-written?

Respondent categories	Yes	No
Active travel	0	0
Community land and development	2	0
Energy	3	0
Estates and agriculture	2	0
Heritage and architecture	3	0
Housebuilding and development	3	0
Housing and empty homes	2	0
Individual	12	1
Legal	4	0
Local authority	18	0
Other compulsory purchase	1	0
Other public sector	2	0
Planning and regeneration	3	0
Surveying, valuation and agents	5	0
Totals	60	1
Percentage	98%	2%

Sixty-one respondents answered this question and only one opposed re-writing the planning assumptions. As with questions 68 and 69, comments for questions 70 and 71 have been combined.

Question 71: Do you agree with the broad outline for how the planning assumptions might be reformed set out in paragraphs 8.45 to 8.46? Do you have any comments on the proposed changes to the planning assumptions?

Respondent categories	Yes	No
Active travel	0	0
Community land and development	1	0
Energy	2	1
Estates and agriculture	2	0
Heritage and architecture	2	0
Housebuilding and development	3	0
Housing and empty homes	1	1
Individual	10	2
Legal	4	0
Local authority	16	1
Other compulsory purchase	1	0
Other public sector	1	0
Planning and regeneration	3	0
Surveying, valuation and agents	5	0
Totals	51	5
Percentage	91%	9%

Fifty-six respondents answered this question, of whom 91% agreed with the proposals for reforming the planning assumptions. The main reasons given for supporting the proposals were to provide greater clarity, certainty and transparency, and to align the planning assumptions with the current planning system, including National Planning Framework 4. While a couple of responses called for the assumptions to continue to take account of hope value, several respondents argued that care should be taken to ensure valuations include only realistic prospects of future permissions, and take account of development costs including infrastructure. A few also commended the proposal to link the planning assumptions with the no scheme principle.

Question 72: Should CAADs be retained as a tool to establish development value in a CPO context, or should they be abolished? Please explain your reasons.

Respondent categories	Retain	Abolish
Active travel	0	0
Community land and development	1	1
Energy	2	1
Estates and agriculture	1	1
Heritage and architecture	1	1
Housebuilding and development	2	1
Housing and empty homes	0	1
Individual	6	5
Legal	2	0
Local authority	15	2
Other compulsory purchase	1	0
Other public sector	0	1
Planning and regeneration	1	1
Surveying, valuation and agents	1	3
Totals	33	18
Percentage	65%	35%

Fifty-one respondents answered this question; 41 provided comments. Overall, 65% wanted to retain Certificates of Alternative Appropriate Development (CAADs) and 35% said they should be abolished. Local authorities were strongly in favour of retaining CAADs; other groups were more equally split.

There were several sets of opposing views expressed in the comments. A large number of respondents felt CAADs were an important mechanism for providing clarity about what alternative forms of development would be acceptable, and that this could reduce the scope for disputes. Some of these mentioned CAADs’ role in establishing development or hope value. However, several others believed that they had limited impact on the final compensation assessment.

A number of local authorities felt that the prospects for future planning permission were best determined by planning authorities and reporters, while several respondents from other groups thought they should be considered by the LTS instead. A couple of respondents favoured abolishing CAADs as part of removing hope value from the system. It should be noted that the abolition of CAADs would not – in and of itself – prevent consideration of land’s planning prospects: this was set out at paragraph 8.52 of the consultation paper.

Even where they supported their retention, many respondents agreed that the CAAD process needs to be improved and streamlined – see question 73.

Question 73: If CAADs were to be retained, how could they be made more effective, efficient and equitable?

Respondents made a wide range of suggestions for improving the CAAD process. The most common proposals were:

• clear time limits, including setting out the interaction with the CPO compensation process
• streamlined procedures
• a robust, independent appeal process
• detailed guidance for applicants and planning authorities, and clarity on the criteria / assumptions to be used

Several local authorities and associated organisations proposed that CAADs should be determined by a reporter, following written submissions. A couple of other respondents also said the decision should be removed from the planning authority, to avoid potential conflicts of interest.

Question 74: Should Part V of the 1963 Act be repealed and not re-enacted?

Respondent categories	Yes	No
Active travel	0	0
Community land and development	2	1
Energy	3	0
Estates and agriculture	1	1
Heritage and architecture	1	1
Housebuilding and development	2	0
Housing and empty homes	1	0
Individual	5	4
Legal	1	2
Local authority	17	0
Other compulsory purchase	1	0
Other public sector	2	0
Planning and regeneration	2	0
Surveying, valuation and agents	5	0
Totals	43	9
Percentage	83%	17%

Part V of the 1963 Act provides for “second-bite” compensation if planning permission is granted for additional development within 10 years after compulsory purchase, increasing the value of the land above the amount originally paid. Of the 52 respondents who answered this question, 83% agreed that this provision should be repealed. Of the 12 who made comments, most agreed that repealing it would provide certainty for acquiring authorities. Some commented that the planning assumptions and CAAD process are already intended to take account of future potential development value. Those who disagreed stated that the fact that Part V is rarely used is not justification for repealing it and felt it could be unfair to landowners.

Injurious Affection

Question 75: Do you agree that the method of valuation for injurious affection should be dealt with in guidance rather than set in legislation?

Respondent categories	Yes	No
Active travel	0	0
Community land and development	0	0
Energy	2	0
Estates and agriculture	2	0
Heritage and architecture	1	0
Housebuilding and development	3	0
Housing and empty homes	1	0
Individual	11	2
Legal	2	0
Local authority	15	1
Other compulsory purchase	1	0
Other public sector	3	0
Planning and regeneration	2	0
Surveying, valuation and agents	5	0
Totals	48	3
Percentage	94%	6%

Fifty-one respondents answered this question, and 94% agreed that the valuation method should be covered in guidance rather than legislation. The main argument given in supporting comments was that setting out the valuation method in guidance would provide necessary flexibility. A few comments were unclear which they would prefer, noting that legislating for the “before and after” approach would have the benefit of clarity, but that there were a small number of cases where a different approach would be more appropriate. Only one called for legislation to remove any room for negotiation or interpretation.

Question 76: Should set-off of betterment continue or be removed from the legislation? Please explain your views.

Respondent categories	Continue	Remove
Active travel	0	0
Community land and development	1	0
Energy	3	0
Estates and agriculture	0	1
Heritage and architecture	0	1
Housebuilding and development	2	0
Housing and empty homes	1	0
Individual	2	10
Legal	2	0
Local authority	14	1
Other compulsory purchase	0	0
Other public sector	2	0
Planning and regeneration	2	0
Surveying, valuation and agents	2	3
Totals	31	16
Percentage	66%	34%

Forty-seven respondents answered this question and there were 45 comments. Overall, two thirds were in favour of continuing the set-off of betterment, and one third in favour of removing it. However, almost all local authorities who answered were in favour of continuing it, while almost all individuals favoured removing it.

The main reasons given for continuing set-off of betterment were that it supports the principle of equivalence and ensures that individuals do not benefit twice where public investment increases the value of their retained land. One respondent commented that the ability to reclaim this funding could encourage acquiring authorities to design schemes (such as road schemes) to maximise the development potential of adjoining land.

Among those who thought set-off of betterment should be removed, several felt it was simply unfair, particularly in relation to neighbouring landowners who benefit from the development without having land taken. Others took the view that betterment is difficult to assess and the notional benefits to the landowner are rarely able to be realised in practice. Several respondents who favoured continuing the policy also called for clear guidance on how betterment should be calculated and applied, to improve transparency.

Question 77: Please provide details of any acquiring authorities which you believe would need new powers to enable them to carry out accommodation works on a discretionary basis.

Twenty-three respondents commented on this question. However, some may not have clearly understood the question, for example referring to land required temporarily to enable the project to be completed. In the CPO context, “accommodation works” are works carried out voluntarily by the acquiring authority, for the landowner on their remaining land, to mitigate the impact of part of their land being taken.

One local authority stated that “Local roads and flood authorities often need express discretion to deliver proportionate works (e.g. fencing, access) to mitigate severance.” Two respondents suggested that “Transport acquiring authorities and Statutory Providers” and “Authorities undertaking major regeneration and infrastructure schemes” may need such powers, but those bodies did not come forward themselves.

A few respondents commented that the power to undertake accommodation works should continue to be discretionary, but there should be more clarity that such works can be offset against compensation claims. One individual felt that accommodation works should be mandatory where they are necessary to mitigate the impact of compulsory purchase.

A key point raised by a number of respondents was that the agreement for accommodation works should be between the acquiring authority and the landowner, and the authority should take responsibility for resolving any disputes, not leave it to the contractor carrying out the works.

Disturbance

Question 78: Do you agree that separate statutory provision should be made for compensation for disturbance? If not please explain your reasons.

Respondent categories	Yes	No
Active travel	0	0
Community land and development	0	0
Energy	3	0
Estates and agriculture	2	0
Heritage and architecture	0	1
Housebuilding and development	2	0
Housing and empty homes	1	0
Individual	15	1
Legal	3	0
Local authority	16	0
Other compulsory purchase	1	0
Other public sector	2	0
Planning and regeneration	1	0
Surveying, valuation and agents	5	0
Totals	51	2
Percentage	96%	4%

Fifty-three respondents answered the closed question, and all but two of them agreed. None of those who answered ‘no’ provided comments, but one respondent who did not answer ‘yes’ or ‘no’ highlighted the risks of changing law which they said was well understood by practitioners.

Twenty-four respondents provided comments. Reasons for supporting statutory provision for disturbance included that it would clarify and simplify the arrangements, it would support the principle of equivalence and recognise the significant costs of dealing with a CPO, and it would allow Land and Buildings Transactions Tax to be paid only on the land value itself. Some respondents asked for clear definitions to be provided, or for particular types of costs to be covered.

Question 79: Should compensation for disturbance be able to cover losses incurred from the date on which the notice of making of the CPO is published (and the claimant’s duty of mitigation should apply from the same date)?

If not, from what date should compensation apply? Please explain your reasons.

Respondent categories	Yes	No
Active travel	0	0
Community land and development	0	0
Energy	1	2
Estates and agriculture	0	1
Heritage and architecture	0	1
Housebuilding and development	2	0
Housing and empty homes	1	0
Individual	11	3
Legal	4	0
Local authority	15	1
Other compulsory purchase	1	0
Other public sector	1	0
Planning and regeneration	2	0
Surveying, valuation and agents	2	2
Totals	40	10
Percentage	80%	20%

Fifty respondents answered this question, of whom 40 agreed that disturbance compensation should apply from the date of notification of making the CPO. Twenty-three respondents provided comments. None proposed a specific alternative date from which compensation for disturbance should apply. The vast majority of those who commented agreed that compensation should be available for costs which arise before the date of acquisition (entry or vesting). Around a third considered that the date of the notice of making the CPO was a reasonable fixed date from which compensation could apply, while another third believed all costs should be recoverable from the first awareness that a CPO might be promoted, for example including costs related to surveying and other investigations. Several mentioned that it is reasonable for the expectation of mitigation to start from the same date. Others cautioned that there should be clear guidance on what could be included or a requirement for robust evidence of actual costs.

Question 80: Should compensation for disturbance be payable to those who have a compensable interest in land included in the CPO when it is made, even if that land is not ultimately acquired?

Respondent categories	Yes	No
Active travel	0	0
Community land and development	0	0
Energy	2	1
Estates and agriculture	2	0
Heritage and architecture	1	0
Housebuilding and development	2	0
Housing and empty homes	0	1
Individual	10	2
Legal	4	0
Local authority	14	2
Other compulsory purchase	1	0
Other public sector	1	1
Planning and regeneration	2	0
Surveying, valuation and agents	4	1
Totals	43	8
Percentage	84%	16%

Fifty-one respondents answered the closed question. Eighty-four percent agreed that people should be able to claim compensation for disturbance even if their land is not ultimately acquired, while 16% disagreed.

Thirteen respondents made comments on this point. Almost all agreed with the proposal on grounds of fairness or equivalence, with some commenting that anyone whose land is included in a CPO will need to take action in expectation of their land being acquired, and will be affected by uncertainty, even if the acquisition does not ultimately go ahead. A few mentioned that it would be necessary to prove that the costs were caused by the expected CPO, and that costs of unsuccessful objections to the CPO should be excluded.

Question 81: Should owners who do not occupy the property be able to claim a wider range of disturbance compensation than at present?

Respondent categories	Yes	No
Active travel	0	0
Community land and development	0	0
Energy	1	1
Estates and agriculture	2	0
Heritage and architecture	0	1
Housebuilding and development	1	1
Housing and empty homes	0	3
Individual	7	4
Legal	4	0
Local authority	6	10
Other compulsory purchase	0	1
Other public sector	0	1
Planning and regeneration	1	1
Surveying, valuation and agents	4	1
Totals	26	24
Percentage	52%	48%

Fifty respondents answered this question, and were almost equally split between ‘yes’ and ‘no’ overall, although particular groups leaned one way or the other. Most of those who commented felt that both owners and tenants should be able to claim compensation for whatever losses they genuinely incurred. However, a few suggested that in the case of empty homes or neglected property, owners should not be able to claim compensation for disturbance.

Question 82: Would it be helpful to provide guidance on compensation in cases of complex corporate structures?

Respondent categories	Yes	No
Active travel	0	0
Community land and development	1	0
Energy	3	0
Estates and agriculture	1	0
Heritage and architecture	1	0
Housebuilding and development	3	0
Housing and empty homes	1	0
Individual	10	2
Legal	3	0
Local authority	16	0
Other compulsory purchase	1	0
Other public sector	2	0
Planning and regeneration	2	0
Surveying, valuation and agents	5	0
Totals	49	2
Percentage	96%	4%

Fifty-one respondents answered this question, and almost all (96%) agreed that guidance should be provided on dealing with compensation where complex corporate or family business structures are involved. Nine respondents provided comments on this question. Most of these felt that guidance would be helpful to reduce uncertainty and provide clarity. A couple mentioned that it would be difficult to legislate for all circumstances. Others felt it was more appropriate to leave such matters to be decided by the courts, or for the corporate body to redistribute any compensation internally.

Question 83: Do you agree that the impecuniosity rule should be removed?

Respondent categories	Yes	No
Active travel	0	0
Community land and development	0	0
Energy	3	0
Estates and agriculture	2	0
Heritage and architecture	1	0
Housebuilding and development	2	0
Housing and empty homes	1	0
Individual	13	1
Legal	3	0
Local authority	14	0
Other compulsory purchase	1	0
Other public sector	2	0
Planning and regeneration	1	0
Surveying, valuation and agents	5	0
Totals	48	1
Percentage	98%	2%

Forty-nine respondents answered this question, and all but one agreed that the impecuniosity rule should be removed. Twelve respondents commented on this question, and all agreed in general that impecuniosity should not be a reason for reducing compensation. However, several noted that it may be difficult to assess what mitigation efforts are reasonable in individual circumstances, and some called for guidance to support consistency.

Question 84: Do you agree with the proposals on mitigation, including compensation for business relocation and extinguishment? Please add any comments on these issues.

Respondent categories	Yes	No
Active travel	0	0
Community land and development	0	0
Energy	3	0
Estates and agriculture	2	0
Heritage and architecture	2	0
Housebuilding and development	2	0
Housing and empty homes	1	0
Individual	12	1
Legal	3	0
Local authority	15	0
Other compulsory purchase	1	0
Other public sector	1	1
Planning and regeneration	2	0
Surveying, valuation and agents	5	0
Totals	49	2
Percentage	96%	4%

Fifty-one respondents answered this question, all but two of whom agreed with the proposals. Among those who commented, most felt that the proposed changes were reasonable, but many considered that guidance would be required to ensure consistency in assessing complex circumstances. A few expressed caution around the proposals relating to business relocation or extinguishment.

Question 85: Should the jurisdiction of the LTS should be extended to cover discretionary as well as mandatory disturbance payments?

Respondent categories	Yes	No
Active travel	0	0
Community land and development	0	0
Energy	1	2
Estates and agriculture	2	0
Heritage and architecture	1	0
Housebuilding and development	2	0
Housing and empty homes	1	0
Individual	11	1
Legal	3	1
Local authority	10	6
Other compulsory purchase	0	1
Other public sector	1	1
Planning and regeneration	1	0
Surveying, valuation and agents	4	1
Totals	37	13
Percentage	74%	26%

Fifty respondents answered this question. Three quarters agreed that the LTS should be able to address disputes over discretionary as well as mandatory payments. Only 6 respondents provided comments, three in favour and three against. However, those who were against claimed that extending the jurisdiction of the LTS would in some way restrict the discretion of the acquiring authority, which suggests some confusion on the issue. The authority only has discretion (in certain circumstances) over whether to make a disturbance payment; the method of calculating the amount is the same for both mandatory and discretionary payments, and this is what the LTS would be able to examine. It is possible that respondents who did not comment may have based their response on similar views.

Loss Payments

Question 86: Should the minimum period of residence necessary to qualify for a HLP (currently one year) be increased? If so, what should the period be, and why?

Respondent categories	Yes	No
Active travel	0	0
Community land and development	0	0
Energy	0	3
Estates and agriculture	0	1
Heritage and architecture	0	1
Housebuilding and development	1	1
Housing and empty homes	0	1
Individual	6	10
Legal	0	0
Local authority	4	11
Other compulsory purchase	0	1
Other public sector	0	1
Planning and regeneration	0	1
Surveying, valuation and agents	1	4
Totals	12	35
Percentage	26%	74%

Among those who responded to this question, just under three-quarters were not in favour of increasing the qualifying period for home loss payments (HLP).

A number of those opposed to an increase questioned whether there was any evidence of the current system being ‘gamed’ (whereby individuals occupy properties subject to acquisition with a view to claiming an HLP), with some going on to say it would be unfair to penalise the majority of claimants on such a basis. Several respondents suggested that if this is a concern, additional criteria on occupancy linked to the timing of the CPO should be used rather than a longer qualifying period. A couple of responses expressed concern about administrative complexity and uncertainty in confirming occupancy over a longer period.

Of those in favour of a longer qualifying period, three respondents suggested three years and three others suggested two years. In terms of justification for a longer qualifying period, a few respondents indicated that this would better reflect the additional trauma and dislocation associated with being displaced from a more established home or community; the issue of gaming was also raised. One respondent suggested specifying the period in secondary legislation, monitoring any gaming and amending the period if necessary.

Question 87: How should the amount of HLP be calculated, among the options discussed in paragraph 8.104 to 8.110? Please add any other comments on these or other approaches.

The consultation paper identified three potential options for how the amount of HLP should be calculated:

• Option 1: retain current approach linked to market value (subject to minimum and maximum payments)
• Option 2: flat rate
• Option 3: graded rate based on length of occupancy

Respondent categories	Option 1	Option 2	Option 3
Active travel	0	0	0
Community land and development	0	0	0
Energy	0	1	0
Estates and agriculture	0	1	0
Heritage and architecture	0	1	0
Housebuilding and development	0	1	0
Housing and empty homes	1	0	0
Individual	5	3	7
Legal	0	1	0
Local authority	2	10	3
Other compulsory purchase	0	0	0
Other public sector	0	0	1
Planning and regeneration	0	1	1
Surveying, valuation and agents	2	2	0
Totals	10	21	12
Percentage	23%	49%	28%

Option 2 was the most popular option, with just under half of those who responded to the question (49%) preferring a flat rate. The other half were split roughly evenly between those who preferred Option 1 (23%) or Option 3 (28%).

Several of those who supported Option 1 cited the link to property value as the fairest approach. It was noted that this would align with England and Wales but that there is a need to raise levels and rates of minimum/maximum payments.

The most common comment on Option 2 was that it was fairer than the current approach, with some also indicating they felt it the clearest and simplest approach. A number of those who supported this option, or who expressed no preference, specifically rejected using market value as a proxy for the impact on affected residents. Several respondents noted various issues with a flat rate, such as it needing to be set at a reasonable level and kept under review. Several other respondents thought an element of sliding scale based on length of occupancy could or should also be included with Option 2; another suggested allowing discretion for an increased payment in certain exceptional circumstances.

Several of those who commented in support of Option 3 explicitly indicated they considered distress and similar impacts were linked to the length of occupancy. Two respondents specified the sliding scale should be based on a percentage of the market value of the property which increases with the length of occupancy.

Question 88: If a person is displaced from an agricultural unit as a result of compulsory purchase, should they be eligible for a loss payment regardless of whether they continue farming elsewhere?

Respondent categories	Yes	No
Active travel	0	0
Community land and development	0	0
Energy	2	1
Estates and agriculture	3	0
Heritage and architecture	1	0
Housebuilding and development	2	0
Housing and empty homes	0	0
Individual	13	1
Legal	1	0
Local authority	12	1
Other compulsory purchase	1	0
Other public sector	3	0
Planning and regeneration	2	0
Surveying, valuation and agents	4	0
Totals	44	3
Percentage	94%	6%

Forty-seven respondents replied to this question, with the vast majority in favour of paying a Farm Loss Payment (FLP) where an occupier is displaced and does not take up farming elsewhere.

Among those who answered ‘yes’, key comments included the disruption and distress of being displaced being sufficient justification for receiving an FLP, and the difficulty of finding suitable land to re-start farming. Only one of those who responded ‘no’ commented, and felt that there was limited justification for payment purely because of the principle of being forced to move to another holding, except where the farmer is also displaced from the main residence.

A few respondents made the same general comments on reforms of HLP and FLP reflecting the practicalities for all those occupiers displaced by CPO.

Question 89: Should there continue to be a minimum area of land (currently 0.5 hectares) below which a FLP is not payable? If yes, what should the minimum area be?

Respondent categories	Yes	No
Active travel	0	0
Community land and development	0	0
Energy	2	0
Estates and agriculture	0	3
Heritage and architecture	0	1
Housebuilding and development	1	1
Housing and empty homes	0	0
Individual	5	8
Legal	0	0
Local authority	9	4
Other compulsory purchase	0	0
Other public sector	0	0
Planning and regeneration	0	0
Surveying, valuation and agents	1	3
Totals	18	20
Percentage	47%	53%

Of those who responded to the question, a slight majority favoured there being no minimum area for FLP. Those who supported removing the minimum threshold cited the disproportionate impact on smaller units (often associated with family farms), such as those dealing with sheep (e.g. crofts and upland fragmented holdings) or pigs and poultry, and where land is intensively used or the plot relates to access to buildings or to key infrastructure. A minimum size criterion was considered too blunt where the use or function of the land was more of an indicator of impact. A couple of respondents felt the current threshold was arbitrary.

One respondent, despite answering ‘no’, recommended retaining a substantially reduced threshold, or introducing flexibility based on economic activity rather than area alone. It was suggested the first would ensure clarity, while the second would promote a fairer system more supportive to certain sectors of agriculture. Four respondents suggested basing FLP on an area-based rate, two of them pointing to this removing the need for a minimum area (see questions 90 and 91 below).

Amongst those favouring retention of a minimum size threshold, eight favoured retention of the 0.5 hectares threshold (one with an exception for intensive farming units and another for exceptionally small units). Other suggestions included one, five and 25 hectares. The justifications given for keeping a minimum threshold were that it is clear cut and keeps the scheme manageable (one respondent), and that it is consistent with the likes of the Agricultural Holdings Act 1986 as regards what constitutes a viable agricultural business (two Energy respondents).

Several respondents suggested alternatives, such as using a percentage of farm area with a minimum threshold, or a minimum with some form of discretion/ flexibility applied.

Question 90: Do you agree that we should move away from the current profit-based approach to calculating FLP?

Respondent categories	Yes	No
Active travel	0	0
Community land and development	0	0
Energy	2	0
Estates and agriculture	3	0
Heritage and architecture	1	0
Housebuilding and development	2	0
Housing and empty homes	0	0
Individual	13	1
Legal	0	0
Local authority	10	0
Other compulsory purchase	0	0
Other public sector	0	0
Planning and regeneration	2	0
Surveying, valuation and agents	4	0
Totals	37	1
Percentage	97%	3%

All but one of those who responded to this question favoured moving away from a profit-based approach to FLP. There were virtually no comments on the reasons for the answers provided. Two respondents felt the vagaries and volatility of farm profits meant it was not a suitable basis for this form of compensation.

Question 91: If a new approach to FLP is taken forward, which of the options outlined at paragraph 8.118 would you prefer?

The consultation identified 3 potential options for how FLP should be calculated:

• Option 1: market value
• Option 2: flat rate
• Option 3: area-based

Respondent categories	Option 1	Option 2	Option 3
Active travel	0	0	0
Community land and development	0	0	0
Energy	1	1	0
Estates and agriculture	1	0	2
Heritage and architecture	0	1	0
Housebuilding and development	0	2	0
Housing and empty homes	0	0	0
Individual	7	4	3
Legal	0	0	0
Local authority	3	4	3
Other compulsory purchase	0	0	0
Other public sector	0	0	0
Planning and regeneration	0	1	0
Surveying, valuation and agents	3	0	0
Totals	15	13	8
Percentage	42%	36%	22%

There was no clear preferred option based on the 36 responses to the question. Whilst Option 1 received the most votes overall, over half (58%) of those who responded favoured either Option 2 or Option 3.

On Option 1, one respondent said it would better reflect the quality and potential of the land lost, and another said some of its members felt it was a fairer approach. One respondent wanted a minimum payment specified and that it be reviewed regularly, whilst another wanted payments monitored. Another respondent who chose this option nevertheless felt a more nuanced approach may be needed in some situations.

Option 2 also attracted little comment, with one respondent mentioning the purpose of FLP was to compensate for the inconvenience of being displaced, and this option was fairer as long as the other losses were covered by other elements of CPO compensation (i.e. disturbance, injurious affection etc). Another felt Option 2 would be simpler. One respondent said it should be graded to reflect farm losses.

One respondent felt that Option 3 is more closely aligned with the purpose of FLP, because that option relates to the size of land and buildings acquired, which is a better proxy for business impact. They also felt it should allow adjustments for enterprise type or exceptional circumstances, as area alone does not capture intensity of use or previous investment.

The responses to this question revealed a wider issue regarding FLP (see question 92 below): namely, divergent views as to what FLP are for. Some felt that these payments, like HLP, are a recognition of the distress and inconvenience arising from compulsory purchase, whereas others were of the view that FLP reflect loss of value associated with the land and/or of income through business disruption.

Question 92: Should loss payments be extended to other non-residential interests displaced as a result of compulsory purchase? Please explain your views.

Respondent categories	Yes	No
Active travel	0	0
Community land and development	0	0
Energy	0	2
Estates and agriculture	3	0
Heritage and architecture	1	0
Housebuilding and development	2	0
Housing and empty homes	0	0
Individual	13	0
Legal	1	0
Local authority	9	5
Other compulsory purchase	1	0
Other public sector	0	0
Planning and regeneration	0	0
Surveying, valuation and agents	4	0
Totals	34	7
Percentage	83%	17%

Forty-one respondents replied to this question, a considerable majority of whom favoured the extension of loss payments to non-residential interests displaced as a result of a CPO. A number of those in favour of this proposal emphasised that non-financial impacts associated with CPO (i.e. stress and inconvenience) extend to others beyond residential and agricultural occupants – small businesses in particular. Alignment with England and Wales was raised by a variety of respondents, with some noting the balance of compensation there between occupiers/ owner occupiers and absentee landlords.

A few respondents who accepted the principle of extending loss payments nevertheless referred to potential practical issues with identifying those eligible and the regulation and calculation of their payments. A couple of respondents mentioned such payments can ease the progress of a CPO.

Opposition to this proposal came from some local authority and energy respondents. Several felt that other heads of compensation would cover the losses incurred by other parties. Linked to this, concern was expressed about dilution of the principle of equivalence. A couple of responses noted the problems specific to agriculture in getting replacement premises/ land compared to other industries.