Scottish Planning Series: Planning Circular 5 2011: Disposal of Surplus Government Land - The Crichel Down Rules

Appendix (see paragraph 1 of the Rules)

Guidance for Departments Changes from the 1992 Rules

1. Several changes have been made to the Rules.

2. Substantive changes have been made to the following Rules:-

Rule 2 a new Rule to set out the territorial application of the revised Rules;

Rule 3 updated references to guidance on the general procedures to be followed when disposing of surplus land;

Rule 4 revision of the former Rules 3 and 4 dealing with the application of the Rules to local authorities, statutory bodies and certain bodies in the private sector;

Rule 5 a new rule dealing with land transfers from public bodies to other bodies, PFI/ PPP projects;

Rule 6 clarifying the circumstances under which the threat of compulsion would be assumed;

Rule 7 formerly Rule 6, dealing with land acquired under blight provisions;

Rule 8 clarification on the land interests to which the Rules apply;

Rule 10 formerly Rule 9, the references to 'agricultural land' and 'urban site' have been deleted and added further clarification on the definition of 'material change';

Rule 12 formerly Rule 11, clarification of the arrangements for offering back land that at the time of acquisition was subject to a long lease;

Rule 14 formerly Rule 13, defines the date of acquisition as the date of entry if under a conveyance or date of vesting if under a general vesting declaration;

Rule 15 formerly Rule 14, clarifies the handling of transfers of land between bodies with compulsory purchase powers, the treatment of small areas of land, provides examples where the offer back would be inconsistent with purpose of the original acquisition, the treatment of consortia and competing bids;

Rule 16 new Rule dealing with the notification of former owners if any of the exceptions to the Rules apply;

Rule 18 revises the time given to agree terms, including price, to 3 months and refers to Rules 24 and 25 for the process for negotiating the resale;

Rule 20 revises the arrangements for advertisements;

Rule 24 removes any confusion on whether the market value is to be determined or negotiated and introduces a mechanism to refer dispute on price to an independent third party for determination.

Rule 26 updated to reflect current legislation and guidance.

BODIES TO WHICH THESE RULES APPLY (RULE 2)

3. These Rules apply to all UK Government Departments, Scottish Government Directorates, executive agencies and NDPBs in Scotland and other organisations in Scotland which are subject to a power of direction by a Minister.

APPLICATION OF THE RULES BY LOCAL AUTHORITIES AND STATUTORY BODIES (RULE 4)

4. Local authorities and other statutory bodies which are not subject to a Ministerial power of direction (for example, statutory undertakers) but who have powers of compulsory purchase, or who hold land which has been compulsorily purchased, are expected to follow the Rules. The previous practice amongst such authorities has been very variable, but the Government would like there to be a high level of compliance. Former owners of surplus land will be likely to see as inequitable a system which requires Government Departments and others to offer back surplus land but not local authorities. A typical example would be on road schemes, where those who had lost land to a trunk road scheme would have surplus land offered back, while those who had lost land to a local road scheme might not.

5. The approach of these bodies when disposing of surplus land must, however, depend on their particular functions and circumstances. For example, in the case of exceptions to the Rules which depend upon Ministerial authority (Rules 15(1), 15(2) and 15(7)) local authorities will have to rely on the decision reached by resolution of that local authority or by exercise of a delegated power. For other statutory bodies the decision will rest with the Chairman. For disposals at the end of Partnership or PPP/ PFI agreements, departments may wish to seek legal advice in order to take account of the Rules.

THE THREAT OF COMPULSION (RULE 6)

6. A 'threat of compulsion' should be assumed in the case of a voluntary sale if the power to acquire the land compulsorily existed at the time. This means that the acquiring department did not need to have instituted compulsory purchase procedures or even to have actively 'threatened' to use them for this Rule to apply. It is enough for the acquiring authority to have statutory powers available if it wished to invoke them. For example, land acquired by a roads authority for the purposes of building a road is acquired under the threat of compulsion because such an authority could use its powers under the Roads (Scotland) Act 1984 to make a CPO. The only exception is where the land was publicly or privately offered for sale immediately before the negotiations for acquisition.

WHAT CONSTITUTES A DISPOSAL? (RULE 8)

7. Disposals for the purposes of granting PFI/ PPP projects do not fall within the Rules, see Rule 5. The Scottish Public Finance Manual makes it clear that sale is normally preferable to lease but there may be cases where a short-term lease is appropriate if there is little prospect of an early sale.

WHAT IS A MATERIAL CHANGE OF CHARACTER? (RULE 10)

8. The Rules refer to a 'material change in character' to the land available for disposal. In the original Commons debate on the Crichel Down case in 1954, 'material change' was envisaged as relating to agricultural land and was illustrated by the example of an airfield having been built with concrete runways and buildings and where the original ownership boundaries have been lost. However, other examples of a material change of character could include the erection of buildings on bare, open land (although it should be noted that the erection of temporary buildings is not necessarily a material change); the afforestation of open land; or the undertaking of substantial works to an existing building, the demolition of a building or the installation of underground infrastructure or services to a site.

LAND SUBJECT TO A LONG LEASE (RULE 12)

9. The property should always be offered back to the former owner first. However, this Rule gives the option of offering to the former long leaseholder if the former owner does not wish to reacquire. If neither party is interested in purchasing, then the property should be disposed of.

WHO IS A SUCCESSOR? (RULE 13)

10. A successor under a will includes those who would have succeeded by means of a second or subsequent will or intestacy. The qualification 'otherwise than by purchase' may be relaxed if the successor to adjoining land acquired it by means of transfer within a family trust, including a transfer for monetary consideration.

WHEN IS THE DATE OF ACQUISITION? (RULE 14)

11. Rule 14 says that the date of acquisition is the date of entry where acquire by conveyance, or the date of vesting if taken under a general vesting declaration. Problems may arise where land has been requisitioned several (sometimes 10 or more) years before the title has transferred. Difficulties can be caused where the two dates straddle a time horizon, so that a disposal would fall within the Rules if the date of transfer was used, but not if the date of requisition was. To avoid these difficulties the date of acquisition is therefore taken to be the date of entry or date of vesting.

WHAT ARE 'REASONS OF PUBLIC INTEREST'? (RULE 15(2))

12. The courts have held that rule 15(2) (formerly 14(2)) does not require these to be matters where life or limb are at risk. In practice, this exception may be invoked where the body to which the land is to be sold could have made a compulsory purchase order to obtain it had it been owned by a third party (See R-v-Secretary of State for the Environment, Transport and the Regions ex p. Wheeler, The Times 4 August 2000).

SMALL AREAS OF LAND (RULE 15(3))

13. This exception provides departments with discretion as to whether to offer land back when the administrative costs in seeking to offer land back are out of proportion to the value of the land. It will also cover cases where there is a disposal of a small area of land without a sale.

WHEN IS IT INCONSISTENT WITH THE PURPOSE OF THE ORIGINAL ACQUISITION TO OFFER LAND BACK? (RULE 15(5))

14. The sections of the Agriculture Act 1948 referred to in this Rule deal with the dispossession of owners or occupiers on grounds of bad estate management and the acquisition and retention of land to ensure the full and efficient use of the land for agriculture. In addition to the statutory examples quoted, the general rule is that land purchased with the intention of passing it on to another body for a specific purpose is not surplus and therefore not subject to the Rules. Typical examples would be sites of special scientific interest ( SSSIs) purchased for management reasons; a listed building purchased for restorations; properties purchased by a local authority for redevelopment which are sold to a private developer partner; or land purchased by Scottish Enterprise or Highlands and Islands Enterprise and sold for economic development purposes and redevelopment. This exception will apply to disposals by statutory bodies with specific primary rather than incidental functions to develop or redevelop land, and to disposals by their successor bodies. In such cases, land would only be subject to the Rules where it was without development potential and, therefore, genuinely surplus in relation to the purpose for which it was originally acquired.

TRANSFER TO THE PRIVATE SECTOR

15. Rule 14(6) of the 1992 Rules, (which would have been Rule 15(6) in these Rules) has been deleted as such transfers are now dealt with by Rule 5, which makes it clear that land transferred to another body for the same functions is not surplus.

DEFINITION OF PROFESSIONALLY QUALIFIED APPOINTED VALUER (RULE 15(7), 18 AND 24)

For the purposes of these rules a professionally qualified valuer is someone who meets the requirements of International Valuation Standards ( IVS).

PROCEDURES FOR DISPOSAL (RULES 18-23)

17. The Rules specify various time limits in the procedures for disposal. However, to assist in the speedy disposal of sites, departments are encouraged to discuss with the former owner all aspects of the sale from the outset of negotiations.

MARKET VALUE AND THE DATE OF VALUATION (RULE 24)

18. For the purposes of the Rules, 'market value' means the definition of 'market value' in the International Valuation Standards ( IVS) as published from time to time by the International Valuation Standards Committee. (This is reproduced in European Valuation Standards ( EVS) and the RICS Valuation Standards - Global and UK (the 'Red Book')), but including any 'Special Value' ( i.e. any additional amount which is or might reasonably be expected to be available from a purchaser with a special interest like a former owner). Full guidance is available in the Scottish Public Finance Manual. The date at which the market value is to be assessed is the date of the receipt by the disposing department of the notification of the former owner's intention to purchase.