Compulsory purchase orders and acquiring authorities: guidance on what to do before developing a CPO

6. Finance

Where an Acquiring Authority is clear about Funding

6.1. The Acquiring Authority needs to be satisfied that it has a reasonable prospect of securing enough funding to (a) purchase the land from the date of acquisition and (b) complete the proposed development of the land within a reasonable timescale. In many, if not all schemes it will be necessary to carry out a full Land Cost Estimate, which details the cost of the land acquisition, reasonable professional fees for those affected, compensation payments for disturbance and any other matter, and compensation for any blight, severance or injurious affection to remaining land.

6.2. This means that the Acquiring Authority should satisfy itself that:

• It has properly estimated the likely levels of compensation that it will need to pay;
• It has (where seeking to purchase only part of someone's land) considered and could meet the financial implications of the landowner(s) serving a Notice of Objection to Severance or advancing a claim for material detriment;
• It could make enough funding available immediately to cope with any acquisition resulting from a successful blight notice; and
• It has estimated the costs of the proposed public works and all associated works (such as the provision of Accommodation Works).

Where an Acquiring Authority is not clear about Funding

6.3. In circumstances where funding streams for the public works/projects are unpredictable or funding sources may change, or if the Acquiring Authority is unable to finalise details until it has assembled the necessary land, the Acquiring Authority must be satisfied that there is a reasonable prospect that it can meet the potential financial commitments.

6.4. Where long term funding is not guaranteed the Acquiring Authority should consider the degree to which others have agreed to contribute or underwrite the scheme and on what basis other bodies will contribute or underwrite.