Joy to the world, the Planning and Infrastructure Act 2025 is come – including reform in the area of CPO and compensation

Hark! The government’s voices ring, glory to the new born king…of legislation. The Planning and Infrastructure Act 2025 (PIA) has received Royal Assent (Once in Royal Assent City?) and has been enacted into law this week, marking another year of yuletide development in the CPO world. Last Christmas, only consultations, I fear – but the very next year, statute for holiday cheer. PIA marks a significant legislative effort to accelerate the delivery of housing, vital infrastructure, and urban regeneration projects. Central to this mission are the proposed reforms to the CPO, aiming to make land acquisition for public benefit faster, more efficient, and to recalibrate compensation principles. Apologies at the top for these egregious and poor quality puns…if you can even call them that.

Key Reforms to the CPO Process

PIA introduces several procedural and substantive changes designed to streamline the process:

• It’s beginning to look a lot like delegated decision-making: To expedite the CPO process, the Act allows for the delegation of certain decisions on CPOs to local authorities or inspectors, particularly where there are no objections or only minor modifications are required. This removes the need for all decisions to be escalated to central government (the Secretary of State). This includes delegating decisions on CPOs with directions removing hope value to authorities where there are no objections and  delegating decisions on CPOs made under the New Towns Act 1981 (including those with hope value directions) to be made by inspectors
• God vest ye, merry gentlemen:The reforms allow authorities to take earlier possession of land or property under the general vesting declarations procedure (usually three months), with a minimum notice period (in some cases, six weeks) under certain prescribed circumstances. This change is intended to speed up project delivery.
• Modernised notice provisions are comin’ to town:The Act seeks to reduce administrative costs and speed up communication by allowing the electronic service of notices related to CPOs and to reduce the amount of information required in newspaper notices.
• Tis the season to extend powers:The Act extends certain compulsory purchase powers to include support for environmental goals, such as enabling Natural England to use CPO powers for fulfilling its Environmental Delivery Plans.

O come, let us value, O come, let us value, O come, let us value, for existing use only

One of the most widely discussed and controversial elements of recent CPO reforms concerns the assessment of compensation, specifically the treatment of “hope value.”

• Hope Value Defined: Hope value is the additional market value attached to land due to the prospect of it gaining planning permission for future, more valuable development (e.g., agricultural land valued as potential housing land).
• The Change: PIA expands the circumstances in which acquiring authorities can issue a direction to disregard hope value when assessing compensation. This power was initially introduced by the Levelling-up and Regeneration Act 2023 (“LURA”) for specific schemes (such as affordable housing, education, and NHS health facilities).  This includes extending the power to remove hope value from compensation by directions where the town/parish or community councils are compulsorily purchasing land for affordable or social housing. It also includes ensuring hope value is removed from the assessment of market value under loss payments compensation where CPOs with directions removing hope value are confirmed
• Impact: By calculating compensation based only on the land’s Existing Use Value rather than its potential development value, the government hopes that the cost of land acquisition for public projects is significantly reduced. The government argues this ensures compensation is not “excessive” and makes the delivery of affordable housing and infrastructure more viable. Landowners, however, argue it deprives them of fair market value.

PIAce on earth – but change is mild, statutory loss payments reconciled

In a move aimed at enhancing fairness for occupiers, the Act also addresses loss payments—additional compensation for inconvenience and disruption caused by compulsory acquisition.

• The Change: The Act amends compensation rules to potentially entitle those in actual occupation of the land (such as tenants or businesses) to greater compensation than under the previous regime. This includes amending the process for making ‘loss payments’ to ensure greater fairness for occupiers who may be displaced, with an upper limit set for certain claims (e.g., up to £75,000 in specific circumstances). PIA also includes provisions excluding home loss compensation where certain statutory enforcement notices/orders have not been complied with

Have the government brought us some figgy pudding and a cup of good cheer?

The compulsory purchase provisions in PIA represent a further effort by the government to empower public bodies to assemble land more swiftly and affordably for projects in the public interest. The reforms seek to balance the need for efficient project delivery with the established principle that landowners should receive fair compensation.

While the procedural changes are largely welcomed as long-overdue modernisation, the expansion of ‘hope value’ exclusion remains a point of contention, fundamentally shifting the balance between private property rights and public sector land acquisition costs in favour of accelerating national development priorities.