Great Britain

American Journal of Economics and Sociology, The, Dec, 2000 by Owen Connellan, Nathaniel Lichfield

The greater the amount of planning control, the greater did the gap between existing use and market values become. As a result of the 1947 Act, owners who were forced to sell their land to public authorities at existing use values considered themselves to be very badly treated in comparison with those who were able to sell their land to others at increased prices, resulting partially from the planning restrictions on other sites. [28]

B. Unscrambling the 1947 Act: The Acts of 1953, 1954 and 1959

The new Conservative Government (1951) unscrambled the scheme by a series of measures taken by the Town and Country Planning Acts of 1955, 1954 and 1959. One of these was the abolition of the development charge. The abolition caused land speculation. As long as owners could expect to receive only existing use value there was little point in buying land to hold in anticipation of a price rise. But when development values were given back to private sellers the prospect of speculative profits emerged again. [29]

With the new scheme, the [pounds]300 million compensation fund was extinguished as well. Instead of the compensation for development rights lost in 1947 being paid on a pro rata basis out of the fund, it was to be paid only when the loss was actually realized on refusal of permission. The local authority was made responsible for the payment of this compensation in cases where the claim attached to a site which was being compulsorily acquired. In other cases it was the central government's responsibility. [30]

The owners who sold their land privately in the market were now placed in a privileged position compared with owners whose land was subject to compulsory purchase. [31] The former received the full market price for their property and retained the development value. On the other hand, until the 1959 Act the latter only received existing use value because, in principle, the development rights belonged to the State. The Act of 1959 re-established market price as the basis of compensation for compulsory acquisition. [32] An owner could thus obtain the same price for his land irrespective of whether he sold it to a private individual or to a public authority, at least in theory. For the public authorities, land purchase suddenly became extremely costly. [33]

But the law as to the ownership of the development rights survived the Acts of 1953, 1954 and 1959, and has endured ever since. They are still separated from the balance of the ownership title and are owned by the Government, so that the denial of compensation for refusal of permission, or imposition of unsatisfactory conditions, still largely prevails as in the 1947 Act.

C. Land Commission Act of 1967

The Labour Government of 1964 made another, quite different, attempt to secure the return of a substantial part of the development value created by the community to the community, and the reduction of the cost of land to authority for essential purposes. To pursue these policies, a Land Commission was created to buy or compulsorily purchase land suitable for development with the objective of supplementing the local authority's powers to facilitate an orderly program of development. The Land Commission was designed to be a site assembler; a planning agency to determine land use; and to manage, dispose of or develop land, whether by itself or by engaging either private or public developers. Thus a central government agency was established to compete with the local authorities in determining where and how land should be used. [34]