Play by the Rules – understanding the Crichel Down Rules

Play by the Rules – understanding the Crichel Down Rules

The government decision to cancel the Birmingham to Manchester leg of the HS2 high speed rail line has highlighted the uncertainties as to what happens to land which was compulsorily acquired by the government for HS2 but is no longer required. The government position in respect of such land has been set out in both parliamentary debates[1] and guidance documentation[2] alike – any land compulsorily acquired will be dealt with and by reference to the Crichel Down Rules (the “Rules”).

The Rules are mandatory for central government departments, executive agencies (e.g. the Highways Agency), non-departmental public bodies (e.g. Historic England) and bodies subject to direct ministerial power (e.g. NHS trusts).

Interestingly, the Rules specify that the rules set out within the same are not mandatory, but are recommended for local authorities. However, this is to be treated with a degree of caution, as case law has determined that although not mandatory, there is a legitimate expectation that local authorities will follow the Rules. Failure do to so could result in a judicial review or human rights proceedings being brought against a local authority.

The Crichel Down Affair

The origin of the Rules dates back to a political scandal in post-war Britain. In 1938 the Air Ministry compulsorily purchased approximately 725 acres of agricultural land at Crichel Down from its landowners to use for RAF bombing practice, in anticipation of the coming war.

Fast forward to 1941 and Prime Minister Winston Churchill delivered a promise in parliament to all landowners who had their land compulsorily acquired for the war effort. Mr Churchill assured such landowners that they would have their land returned to them after the Second World War.

However, Mr Churchill and the government did not fulfil their promise and the land at Crichel Down was transferred after the war from the Air Ministry to the Ministry of Agriculture. The Ministry of Agriculture then increased the price of the land considerably beyond its market value (so much so that the landowners could not afford to buy it back) and then leased the land to another party. At the request of the successors to the original landowner of the land at Crichel Down, a public inquiry was held in 1954 and the (then) Minister of Agriculture announced that the estate could be bought back by the successors. The same Minister resigned shortly after such announcement was made.

The legacy of the scandal was the upholding of the following principle: land which is no longer needed for the purpose for which it was acquired should first be offered back to the person from whom it was acquired. Of course, such a principle is subject to the wider provisions contained within the Rules, which set out exceptions and procedural requirements.

The General Rules

The Rules state that former owners of land acquired by (or under threat of) compulsion are entitled to be given a right of first refusal to repurchase their land in the event that a public body decides to dispose of such land. The rules therefore apply where a compulsory purchase order was in place or where land was acquired by voluntary sale under ‘threat of compulsion’ if a power of compulsory purchase existed at the time in respect of the land or property to be acquired. Such a right is subject to several exceptions which are explored in further detail below.

However, for the Rules to apply, the land must be surplus to requirement and the public body must intend to dispose of it. The fact that the land is surplus to requirement does not impose an immediate obligation on the public authority to offer the land back; it is only when a decision is made to dispose of the surplus land that the Rules are triggered.

To whom is the land offered back?

The standard position under the Rules is that a party must have a ‘qualifying interest’ in order to make a valid claim to repurchase acquired land – such parties are known as ‘former owners’. To be a ‘former owner’, a claimant must be either the former freeholder or long leaseholder of the land. Sitting tenants (i.e. residential tenants with long term security of tenure/indefinite tenure) also have a claim similar to that of ‘former owners’.

However, the Rules also allow successors to former owners to qualify as valid claimants. This means the person to whom the land or property, had it not been acquired, would clearly have devolved under the former owner’s will or intestacy. Thus, if a claimant can prove a direct devolution of succession, they would be considered a ‘former owner’ for the purposes of the Rules.

When do the Rules not apply?

The obligation to offer back land under the Rules does not apply in certain circumstances. If any of exceptions listed below can be demonstrated, the public authority would not be expected to offer the land back to a claimant:

• Material change – if the character of the land has materially changed since its acquisition, the obligation to offer back does not apply. An example of this could be where services have been laid on the land, or the land has been forested, or works to the land have altered its character. Consideration as to likely cost of land restoration (i.e. to original use) may impact on whether this exception can be relied upon – if the cost of restoring is likely to be low, it may not be a ‘material’ change.
• Disposal – if the proposed disposal by the public authority is for a PFI/PPP project.
• Transfer– if the land is to be transferred to a body that has taken over some or all of the functions and obligations of the public body in relation to the land.
• Environmental – if the land is to be transferred to the National Rivers Authority (now part of the Environment Agency).
• Offer for Sale – if the land has been acquired by agreement when power to acquire the land compulsorily existed, but the land had been publicly or privately offered for sale immediately before negotiations for compulsory acquisition started.
• Blight – if the land has been acquired by agreement in advance of any liability under the statutory blight provisions.

If any of the above exceptions apply to the land, the public body may have grounds to reject the claim and the Rules would therefore not apply.

The Rules also have a time horizon (an equivalent to a time limitations bar) regarding the obligation to offer back acquired land. The Rules do not apply to agricultural land acquired prior to 1935 or after 1992. Furthermore, any non-agricultural land which becomes surplus and available for disposal 25 years after the date of acquisition would also have a time horizon for offer back. The date of acquisition is the date of the conveyance, transfer or vesting declaration.

Are there exceptions to the obligation to offer back?

The Rules set out exceptions to the obligation for a public body to offer acquired land back prior to disposal. These are as follows:

• Required by another government department – where it is decided on specific ministerial authority that the land is needed by another government department and is, therefore, not surplus to government requirements.
• Public Interest – where it is decided on specific ministerial authority that for reasons of public interest the land should be disposed of to a local authority or other body with compulsory purchase powers.
• Commerciality – where the area of land is so small that its sale would not be commercially worthwhile. This is for circumstances where the administrative costs involved in offering the land back are out of proportion to the value of the land.
• Exchange – where the disposal is beneficial to both the disposing department and a neighbouring landowner to make minor boundary adjustments by exchanging land.
• Inconsistency – where the disposal would be inconsistent with the purpose of the original acquisition by the government to offer the land back.
• Value – where a disposal is in respect of either of the following and there is a risk of a fragmented sale realising substantially less than the market value for the site as a whole:
  • a site for development that has not materially changed and which comprises two or more previous land holdings (unless a consortium of former owners wants to buy the land); or
  • a site that consists partly of land which has materially changed in character and part which has not.
• Insufficiency of Clawback – where the market value of the land is so uncertain that claw back provisions would be insufficient to safeguard the public purse.

If any of the exceptions above apply to the land, a public body may have grounds to reject a claim in respect of the Rules and the Rules would not be applicable.

Process for disposal

If a decision has been made to dispose of land and no exceptions apply, public bodies are required to follow set procedures in respect of the Rules prior to such disposal. This includes sending letters to former owners where addresses are known and, in the event that the address is not known, contacting solicitors and agents and putting advertisements in relevant newspapers.

The Rules provide for the sale of the land back to the qualifying former owner at current market value and also on other terms to be agreed between the acquiring authority and former owner. Such terms can include clawback provisions to ensure that the public authority obligation to the taxpayer to obtain best price is satisfied.

Further Information

Sharpe Pritchard’s compulsory purchase unit offers advice and guidance to acquiring authorities and landowners across the full spectrum of CPO-related issues. If you would like to discuss the Rules process and/or your legal options in connection with the Rules, please contact James Mallery-Nelson (jnelson@sharpepritchard.co.uk) or on 0207 405 4600 for a free initial consultation.

This article is for general awareness only and does not constitute legal or professional advice. Law and guidance relating to insolvency and property is continually being updated and the law may have changed since this page was first published. If you would like further advice and assistance in relation to any issues raised, please contact us today by telephone or email.

[1] Volume 742, High Speed 2 Debate, 14 December 2023, Hansard – Huw Merriman to Simon Lightwood

[2] HS2 Phase One Information Paper – C6: Disposal of Surplus Land and Over-Site Development, 23.02.17