Government’s plans to strengthen CPO powers to deliver affordable housing are the “wrong tool for the wrong problem”

In a consultation launched on 19 December, the government put forward expected changes to compulsory purchase orders (CPOs). The changes would, theoretically, give local authorities considerable power to compulsorily acquire land at a lower cost than might be achieved on the open market.

Any suggestion that landowners should be punished for their wealth is too simplistic a message. While many might agree that land should not be sold for obscene profits, the reality is that this is rarely the case. Furthermore, land sales are only a part of development costs. And importantly, the development industry is vital to the economic success of the country – so encouraging land sales should be a priority of the current government.

And it’s not just the wrong message, but the wrong approach to achieve the intended outcome of speed, deliverability and affordability.

CPO powers are best used (usually as a last resort) in enabling the development and provision of necessary infrastructure on large sites, or where ownership is fragmented. For most sites, and for strategic greenfield housing land specifically, CPO is rarely required. It feels like a knee-jerk reaction. It might give the impression that governments (of both political colours) have responded to the affordable housing need, but it’s the wrong way of going about it.

Benchmark land values (BLV), which prevent developers from using inflated land purchase prices in viability calculations, could be a more effective approach. Whereas CPO is relatively rarely used in land assembly, planning permission is required for every housing development. Therefore, you are addressing the issue at source and not requiring a huge step change in the use of onerous CPO powers. If developers cannot pass on inflated land costs in their planning viability arguments, it should limit what they are prepared to pay for land and correct any perceived or real notion that inflated pricing is an issue.

Geographic discrepancies are just the first of the problems with putting this rule in place – how do you apply the benchmark value approach across different parts of the country? BLVs must still have a geographical nuance and where that nuance is fixed would be the subject of considerable debate.

In parts of the UK, land with planning consent for development could achieve a considerable uplift in value relative to undeveloped, agricultural land. Therefore, the hope value (i.e., the potential loss to the landowner) could be considerable. Comparatively, in other parts of the country, hope value might be much lower. This is just one inherent unfairness in a ‘one size fits all’ approach to BLV will need to be addressed.

This policy proposal is using the wrong tool for the wrong problem. If the problem is affordability and deliverability, the causes lie in the broader economic context and factors such as the speed with which planning consents are granted. Creating a more efficient planning system, with more certainty, investment and less risk would have a much more immediate impact.

The days of the 1970s council housing estate are gone and genuinely mixed communities offer an infinitely better alternative. While the benefits and realities of the ‘15 minute neighbourhood’ are debatable, there’s no doubt that well-functioning communities need a school, shop and community infrastructure.

Rather than resorting to the blunt tool of CPO, the government should think carefully about the role landowners take in these successful schemes and not seek to discourage them from promoting and releasing land for much needed growth.

The increased delivery of affordable housing requires going back to first principles: determining exactly what needs to be achieved and finding the appropriate tool. I believe this already exists, in a collaborative approach to planning and delivery.

Robert Smith is head of national strategic land and Paul Astbury is head of CPO at Carter Jonas