Compulsory purchase reform in Scotland: consultation

2. Overview: How compulsory purchase works

What is compulsory purchase?

2.1 As the name suggests, compulsory purchase powers provide a mechanism by which certain organisations can acquire land (including buildings) without the consent of their owner.

2.2 Taking a person’s property is a serious step and one which interferes with the private rights of those affected; it also engages various protections^[1] under the European Convention on Human Rights (ECHR). So while the use of compulsory purchase can help to deliver positive outcomes in the public interest, it is essential that appropriate safeguards are in place to ensure that, in any given case:

• the use of compulsory purchase powers is justified and proportionate
• those who are affected have the opportunity to object and are compensated fairly

Who has compulsory purchase powers?

2.3 A wide range of public sector bodies have compulsory purchase powers, including local authorities and certain infrastructure providers such as utilities companies. Scottish Ministers also have compulsory purchase powers which are exercised by agencies such as Transport Scotland.

2.4 Bodies with compulsory purchase powers are known as ‘acquiring authorities’. Legislation specifies the purpose(s) which particular acquiring authorities can compulsorily purchase land for. These are referred to as ‘enabling powers’.

2.5 Each acquiring authority’s enabling powers relate to their statutory functions and objectives. The link between an acquiring authority’s enabling powers and its statutory functions goes back to the intrusive nature of compulsory purchase: to be justified, an acquisition needs to serve a legitimate purpose which Parliament has provided for in legislation. Enabling powers are covered in more detail in chapter 3.

How are compulsory purchase powers used?

2.6 Having compulsory purchase powers is one thing; using them is another. The existence of compulsory purchase powers does not, in itself, authorise the relevant authority to acquire whatever land it likes, whenever it likes. To make use of its powers, an acquiring authority will need to prepare a compulsory purchase order (CPO). A CPO identifies the specific land that is to be acquired, the relevant enabling powers being used and the purpose of the proposed acquisition. It will generally be accompanied by a Statement of Reasons, which sets out the acquiring authority’s justification.

2.7 Acquiring authorities are expected to start engaging with those affected by a prospective compulsory purchase early in the process. Doing so can help build trust, reduce conflict and potentially even avoid the need for compulsory purchase at all. Such engagement can ultimately save all parties time and money. The acquiring authority should try to buy land by agreement before making a CPO, although in some cases this may not be practical^[2]. Early engagement is covered in more detail in chapter 4.

Who decides whether a CPO is approved? How are those decisions made?

2.8 All CPOs are subject to ‘confirmation’ (i.e. approval) by the Scottish Ministers. Once a CPO has been made, the acquiring authority must notify affected owners and occupiers and advertise the Order. Requirements for making the CPO and for notification and advertisement are covered in more detail in chapter 5. The CPO is then sent to Scottish Ministers for determination. There follows a period of not less than 21 days for parties to make objections, which are submitted directly to the Scottish Government.

2.9 If no objections are received, Scottish Ministers will decide whether or not to confirm the CPO. If objections are received and not withdrawn, the case will be transferred to the Planning and Environmental Appeals Division (DPEA) who will arrange for it to be considered by a Reporter. A Public Local Inquiry or Hearing will be held, after which the Reporter will prepare a report to the Scottish Ministers with recommendations as to whether the CPO should be confirmed. The final decision rests with Scottish Ministers.

2.10 For any CPO to be confirmed, the decision-maker must be satisfied that there is a strong enough case in the public interest to justify the acquisition. In deciding whether to confirm a CPO, Scottish Ministers will weigh up the public benefit in the authority’s proposals against the private interests of the people affected. CPO decisions are taken on their merits: the justification for an Order depends on the circumstances of the case. The procedures for determining whether or not CPOs are confirmed – and the basis of those decisions – are covered in more detail in chapter 6.

2.11 The paragraphs above apply to the majority of acquiring authorities. The equivalent terminology is different for Ministerial CPOs – for example, where Transport Scotland is the acquiring authority. In such cases, the Order is technically ‘made in draft’ and, if it is approved, ‘made’ (i.e. rather than ‘made’ and ‘confirmed’). The Order will be prepared by the agency and then sent to the Scottish Ministers for approval. If there are objections the case will be considered by DPEA as in paragraph 2.9. For simplicity, this consultation document refers to CPOs being made and then confirmed. Such references should be read in the context of this paragraph.

How is a CPO implemented?

2.12 A confirmed CPO does not, in itself, transfer ownership of the land to the acquiring authority. To exercise the powers conferred by a confirmed CPO and take possession of the land, the acquiring authority must serve notice on affected owners and occupiers. There are two main ways of doing this: by preparing a ‘general vesting declaration’ or by serving a ‘notice to treat’. Whichever procedure is used, the acquiring authority has three years within which to initiate the implementation of a CPO – after which the powers lapse. The procedures for taking possession of and title to land within a CPO are covered in more detail in chapter 7.

Compensation

2.13 Those whose property is acquired compulsorily are entitled to compensation. The rules governing compulsory purchase compensation in Scotland are founded on the underlying and long-standing principle of ‘equivalence’. This is the principle that those whose land is acquired by compulsion should be put (at least in financial terms) in the same position after the acquisition as they were before it, being left neither better off nor worse off as a result. There are four principal elements of compensation:

• the value of the land taken
• injurious affection (reduction in value of retained land)^[3]
• disturbance
• loss payments

2.14 Disputes over CPO compensation are settled by the Lands Tribunal for Scotland (LTS). Compensation is covered in more detail in chapter 8 and the associated procedures in chapter 9.

Legislation and guidance

2.15 As noted in chapter 1, Scotland’s compulsory purchase legislation is complex and fragmented – being spread across multiple statutes which date back to the mid-19^th Century. The table below sets out the key statutes which govern compulsory purchase procedures and compensation. These pieces of legislation are referred to throughout this consultation document by the stated shorthand. The table does not include enabling powers; as explained in chapter 3, these are in the various acts which set out acquiring authorities’ statutory functions.

Full Title

Lands Clauses Consolidation (Scotland) Act 1845

Shorthand

The 1845 Act

Full Title

Acquisition of Land (Authorisation Procedure) (Scotland) Act 1947

Shorthand

The 1947 Act

Full Title

Land Compensation (Scotland) Act 1963

Shorthand

The 1963 Act

Full Title

Land Compensation (Scotland) Act 1973

Shorthand

The 1973 Act

Full Title

Town and Country Planning (Scotland) Act 1997 (Schedule 15: General Vesting Declarations)

Shorthand

The 1997 Act

2.16 The Scottish Government has produced a number of policy and guidance documents on compulsory purchase. The key document is Circular 6/2011, which sets out policy on the use of compulsory purchase powers, including the factors Scottish Ministers will take into account when taking CPO decisions. It also contains advice and guidance on specific topics.

2.17 A five-part series of Guidance Notes aimed specifically at acquiring authorities was published by the Scottish Government in 2018:

• Guidance Note No.1: Can I use compulsory purchase?
• Guidance Note No.2: What should I do before developing a CPO?
• Guidance Note No.3: How do I prepare and submit a CPO?
• Guidance Note No.4: How do Scottish Ministers consider a CPO?
• Guidance Note No.5: Confirmed Orders – next steps

2.18 In 2019, guidance was published for those affected by compulsory purchase projects: Compulsory Purchase in Scotland: A guide for property owners and occupiers. The above documents and a range of other information and guidance can be found on the Scottish Government’s compulsory purchase homepage, which includes a register of all the CPOs submitted to the Scottish Ministers for confirmation since 2012.

Options and proposals

2.19 Our intention is that a future Compulsory Purchase Bill would not just amend current provisions but would replace and repeal existing primary legislation relating to compulsory purchase procedures and compensation. A single Compulsory Purchase Act incorporating the reforms introduced through this programme would offer clear benefits in terms of clarity and useability. This was proposed by the Scottish Law Commission in its 2014-16 review and universally supported by respondents.

2.20 The introduction of a single Compulsory Purchase statute combining procedural requirements and compensation is our aspiration and preferred option. We do not think this statute should include enabling powers, which in the interests of flexibility would continue to be contained in the statutes for the relevant policy areas (e.g. housing, planning, education etc). However, the proposed Bill could amend those enabling powers where necessary.

2.21 Where existing compulsory purchase procedures have been incorporated into ‘special acts’ and other legislation, our preference is that they should be replaced by the new procedures, with transitional provisions where necessary to deal with projects already underway.

Question 1: Do you agree that legislation governing compulsory purchase procedures and compensation in Scotland should be brought into a single statute?

Question 2: Do you have any specific concerns in relation to the repeal of existing legislation on CPO procedures and compensation that we should consider?