Compulsory purchase and the state redistribution of land. A study of local authority-private developer contractual behaviour
| Pages | 1-16 |
| DOI | https://doi.org/10.1108/JPPEL-07-2019-0041 |
| Published date | 09 March 2020 |
| Date | 09 March 2020 |
| Subject Matter | Building & construction law,Real estate & property,Building & construction,Property law |
| Author | Edward Mitchell |
Compulsory purchase and the
state redistribution of land
A study of local authority-private developer
contractual behaviour
Edward Mitchell
School of Law, University of Essex, Colchester, UK
Abstract
Purpose –The compulsory purchase of land forms the subject of much legal and urban regeneration
research. However, there has been little examination of the contractual arrangements between local
authoritiesand private sector property developers that often underpin the compulsorypurchase process. This
paper aims to examinelocal authority/private developer contractualbehaviour in this context.
Design/methodology/approach –An empirical examination of property development contracts made
for the “Silver Hill”project in Winchester,a small city in southern England, and the Brent Crossshopping
centre extension innorth London. Drawing on Macneil’s (1983) relational contract theory,the paper analyses
key contractterms and reviews local authority documentation related to the implementationof those terms.
Findings –The contracts had two purposes as follows: to provide a development and investment
opportunity through the compulsory purchase and redistribution of private land; and to grant the private
developers participatingin the projects freedom to choose if they wished to take up that opportunity. While
the contracts look highly “relational”, the scopefor flexibility and reciprocity is both carefully planned and
tightly controlled. Thisexposes an asymmetric power imbalance that emerges in and is rearticulatedby this
type of contractualarrangement.
Originality/value –The empirical analysis of contractterms and contractual behaviour provides a rare
opportunity to scrutinise the local authority-private developer relationship underpinning both property
developmentpractice and compulsory purchase.
Keywords Compulsory purchase, Property development, Private profit, Financial viability,
Private to private acquisitions, Relational contract theory
Paper type Research paper
Introduction
This paper investigates the state’s power to appropriate land in pursuit of private profit.
David Harvey’s (1999,2003) well-known concept of “accumulation by dispossession”
examines the tendency within capitalist societies to generate surpluses of commodities,
money and labour without accompanying opportunities for the utilisation of those
surpluses. State and corporate actors, Harvey (2003, p. 145) posits, address this by creating
financial growth and investment opportunities by forcibly redistributing assets from one
property owning class to another.The assets redistributed in this way often include land:if
an existing owner or occupier refuses to part with the land that a private developer has
earmarked for property development, the latter has no means to secure thatland unless the
The author wishes to acknowledge the advice, comments and criticisms received from two colleagues
at the University of Essex, Matt Stone and Maurice Sunkin. The author also wishes to thank the two
anonymous reviewers for their constructive criticisms in relation to the study. Views, errors and
omissions remain the author’s own.
Compulsory
purchase
1
Received26 July 2019
Revised13 January 2020
Accepted24 January 2020
Journalof Property, Planning and
EnvironmentalLaw
Vol.13 No. 1, 2021
pp. 1-16
© Emerald Publishing Limited
2514-9407
DOI 10.1108/JPPEL-07-2019-0041
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/2514-9407.htm
state intervenes. As Levien (2015, p. 149)puts it, the redistribution of land from one private
owner to another thus often rests upon “the desire of states to help capitalists overcome
barriers to accumulation”. State bodies that seek to remove these barriers do so, Levien
(2011, p. 463. See also Gray, 2007, p. 79) argues, by acting as a type of “land broker”tasked
with transferring land to the privateowner deemed to be best placed to put it to “profitable”
use. In the UK, these trends have provoked controversies when local authorities use
compulsory purchase to assemble a development site so that private corporations can
develop, invest in and profit fromthat land.
Case law and academic commentary on “private to private”land acquisitions highlights
the tensions that can arise whenEnglish local authorities use compulsory purchase in ways
that appear primarily to favour large corporate interests and that produce an imbalance
between public benefitsand private profits (Gray, 2011;Waring, 2013;Maxwell, 2017). Other
academic work on the compulsory purchase of land for private profit asks how those who
stand to be dispossessed mightcounter this trend (Hubbard and Lees, 2018). Some accounts
examine the various legal mechanisms at play (Layard, 2010;Hodkinson and Essen, 2015),
although there has been less analysis of the contractualarrangements that local authorities
make with private companies to facilitate land redistributions. This is surprising,
particularly as, in R (Archway SheetMetal Works) v Secretary of State for Communities and
Local Government and others [2015]EWHC 794 (Admin), [2015] 2 WLUK 699, Dove J quoted
with approval a Planning Inspector’s report stating that it would be unusual for a local
authority and a developer not to agree detailedcontracts for the use of compulsory purchase
to facilitate private to private acquisitions (paragraph 17). By providing an in-depth
examination of contractual behaviour in this context, the paper shows how contract
planning and implementationcreate opportunities for the reallocation of land ownership and
the accumulation of privatecapital rather than concrete public benefits.
To help understand the purposebehind, as well as the effect of this behaviour, this paper
examines two property developmentcontracts. The first is a contract for the redevelopment
of the “Silver Hill”area in Winchester, a small city in southern England. The second is a
contract for the construction of an extension to Brent Cross shopping centre and the wider
regeneration of surroundingparts of north London. The first development is referred to here
as “the SH development”and the local authority, the developer and the contract are,
respectively, “SHLA”,“SHD”and “the SH Contract”. Similar shorthand is used for the
second development, which is the “BX development”and the localauthority, the developer
and the contract are “BXLA”,“BXD”and “the BX Contract”. These contracts provide an
important illustration of the lopsided interface between public and private power because
they were designed to facilitate large projects that the developers agreed to fund and build
but for which the local authorities agreed to provide the land earmarked for the
developments.
The primary focus, in this paper, is the insights that the SH and BX Contracts provide
into the local authority-private property developer dynamic while the parties seek to
redistribute private land. Attention is paid to the express terms of the contracts and what
the parties do in, and with, their contractual arrangements. Ian Macneil’s relational contract
theory, which encouragesanalysis of contracting parties’interrelations within the contextof
“common contract behavioural patternsand norms”(Macneil, 2000, p. 879), provides a “set
of tools”for examining thechoices parties make when planning and seeking to effectuatean
exchange (Mitchell, 2013, p. 177). By drawing on Macneil’s work, the paper argues that
SHLA and BXLA were useful cogs in wider processes of accumulation by dispossession.
The paper then argues that the SH and BX Contractscreated an unbalanced power dynamic.
On the one hand, the paper explains that the Contracts allowed SHD and BXD to choose
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