Purpose

This report seeks authority to
make a compulsory purchase order in relation to the Regina Road
Regeneration Project. A compulsory purchase order is required to
acquire various interests, including the freehold and leasehold
interest in the residential properties and non-residential
properties, and all rights within the Regina Road Estate should the
Council be unsuccessful in acquiring the relevant land and
interests by agreement.
 
The land required for the
Regina Road Regeneration Project, and which would be subject to the
compulsory purchase order, is shown edged red on the boundary plan
attached, to support the Council in delivering the project in its
entirety and in alignment with the Greater London Authority (GLA)
grant funding requirements.    

Content

For the reasons set out in the
report, appendices including the draft Statement of Reasons
(‘SOR’), the Executive Mayor AGREED
to:
 

2.1.1   
Approve the making of a CPO under section 226(1)(a)
of the Town and Country Planning Act 1990 (the ‘1990
Act’) for the acquisition of the land, property and
rights situated within the Estate as shown edged red on the draft
CPO Order Map attached as Appendix 1 to this report for the purpose
of assisting in bringing forward the Project;
 

2.1.2   
Delegate authority to the Corporate Director of
Housing to take all necessary steps to effect the making, confirmation and implementation
of the CPO and take all necessary steps to give effect to the CPO
in respect of the Estate including, but not limited to, the
following procedural steps;
 
(a)                 
finalise a Statement of Reasons (“SOR”)
setting out the Council's reason for making the CPO (including
making any necessary additions, deletions or amendments to the
current draft). A current draft of the SOR is attached as Appendix
2 to illustrate the case for and benefits of progressing the
CPO;
 
(b)                 
making the CPO, the publication and service of any
press, site and individual notices and other correspondence for
such making;
 
(c)                 
acquire for planning purposes all interests in land
required within the Estate as may be necessary to facilitate the
Project, either by agreement or compulsorily, including entering
negotiations with third parties for the acquisition of their land
interests, the payment of compensation and dealing with any blight
notices served in connection with the CPO;
 
(d)                 
approve agreements with landowners or statutory
undertakers as applicable, setting out the terms for withdrawal of
any objections to the CPO, including where appropriate seeking
exclusion of land from the CPO;
 
(e)                 
make any necessary additions, deletions, or
amendments to the draft CPO Order Map at Appendix 1 and to seek any
requisite modifications to the CPO;
 
(f)                  
the preparation and presentation of the
Council’s case at any public inquiry which may be
necessary;
 
(g)                 
seek confirmation of the CPO by the Secretary of
State (or, if permitted, by the Council pursuant to Section 14A of
the Acquisition of Land Act 1981) (the ‘1981 Act’);
 
(h)                 
in the event the CPO is confirmed, publication and
service of notices of confirmation of the CPO and thereafter to
execute and serve any general vesting declarations and/or notices
to treat and notices of entry, and any other notices or
correspondence to acquire those interests within the area,
including, if required, High Court Enforcement Officer notices;
 
(i)                   
negotiate and settle any compensation claims made in
respect of the CPO; and
 
(j)                   
all steps in any legal proceedings related to the
CPO including referral and conduct of disputes, relating to
compulsory purchase compensation, at the Upper Tribunal (Lands
Chamber) and/or the courts and any appeals
 

Reasons for the decision

The Cabinet, on 22 March 2023,
agreed the Council’s Landlord Offer (key decision ref.
8622EM). A ballot was held between 26 April and 22 May 2023 and
87.1% of the residents (eligible voters) turned out, and those
voters voted 88.1% in favour of the Council’s Landlord Offer
to redevelop their homes. The report to Cabinet on 26 July
2023 sought recommendation on several matters including to
approve:
 
the
commencement of the acquisition of freehold/leasehold interests in
the properties within the red line area via negotiation in the
first instance and under terms that would apply pursuant to a CPO;
and
 
the
preparation in due course of a CPO to cover all properties within
the red line shown in the Landlord Offer.
 
The Planning Permission relates
to the redevelopment of the Regina Road Estate for the
following:
 
redevelopment of the housing estate of up to 340 residential
units;
 
a
pre-school facility;
 
community space and a flexible games area;
 
along with associated public realm, landscaping,
refuse/recycling and car and cycle parking facilities.
 
The Council will implement the
Planning Permission by the end of March 2026 through commencing new
build works on land already owned by the Council. However, the
delivery of much of the Project remains at risk without the
acquisitions of the remaining interests.
 
Following a decision made by
Cabinet on 25th October 2023 approving the direct delivery of 225
new affordable homes for Phase 1 of the redevelopment on the Estate
by the Council, the Council was awarded GLA affordable housing
grant funding in the sum of £52,250,000 (see GLA Grant
Funding Agreement at Appendix 3) and the Ministry of, Housing
Communities and Local Government (MHC&LG) grant funding in the
sum of £1,258,800 (see Appendix 4), with specific milestones
required to be achieved. A key milestone is to achieve a ‘start on
site’ by March 2026 (hereafter “Start on
Site”).
 
Start on Site is defined as meaning any work of construction or
demolition in relation to any dwelling, this could involve trench
works for foundations, laying of underground pipes, road
construction or demolition/service diversion works. Whilst the
Council has completed the demolition of block 1–87 this will
not be classed as Start on Site as it was completed under a
separate contract. The Council are seeking to commence the
construction of Block A and/or demolition works for the pre-school
(anticipated to be acquired and vacant by mid-February 2026); and
to enter into a construction contract with the appointed contractor
for the Project before 31st March
2026.
 
The total grant funding
allocated to the Project is therefore approximately £54m.
Further details of this grant funding are included at paragraph
7.1.1 of this report.
 
The Project is to be delivered
in two phases:
 
Phase 1 contains the 225 affordable homes against which the
Council has been allocated the grant funding. The delivery of Phase
1 requires all existing properties on the Estate to be acquired and
demolished.  The Project is at
considerable risk if the Council does not obtain ownership and
control of all privately owned properties and rights within the
Estate at a reasonable cost and in line with the Project programme
requirements.  In the absence of a CPO,
or the authority to make and implement a CPO if required,
negotiations with owners of privately owned properties could become
much more difficult and protracted, and the Council would not
possess the legal authority to secure control of the land. This
would prevent the delivery of all or part of the
Project.  In addition, if the Council is
not able to obtain vacant possession of the Estate, this would
impact the delivery of future sub-phases and the ability to deliver
the Project in general.
 
The
current proposal for Phase 2 is the delivery of a maximum 14 storey
tower, together with a perimeter block (the current number of units
proposed of up to 115 homes is based on that perimeter block being
6 storeys, although this is subject to change).  The current proposed Phase 2 layout parameter plan
submitted under the Planning Permission for the Estate requires
Phase 2 to come forward in the form of two separate buildings
(hence the tower and perimeter block proposed). The current
proposed open space parameter plan identifies the extent of Phase 2
which would be delivered as a landscaped buffer between buildings
and the edge of the Phase 2 boundary which is currently under
review. The proposals for Phase 2 of the Project remain in outline
and therefore, there is still flexibility for the Council to
consider the delivery of the same as well as the chosen funding
mechanisms.
 
The
Council is seeking to progress this CPO now as it requires the land
to deliver Phase 1 to ensure that the benefits associated with that
phase come forward. The Council has included the Phase 2 land
within the Order as block 1-4b Sunny Bank, which falls within the
Phase 2 Land, needs to be demolished in order to bring forward to
development under Phase 1 (which will deliver significant benefits
to the Estate and Croydon more widely). The detail of the proposals
for Phase 2 will be developed in due course.
 
The anticipated total number of
residential units proposed to be delivered was reduced from an
initial estimated figure of 380 to up to 340. This was the result
of extensive feasibility studies, optioneering review and testing
against National Design Guidelines, alongside rigorous
pre-application meetings with the planning and design officers at
the Council.  There were many factors
that ultimately led to arriving at 340 units, including ensuring
overall exemplar quality of residential amenity and excellent
public realm and open space.  At all
iterative stages of the design process, the building placement and
height was tested for compliance against relevant planning
policies, and assessed for technical outcomes, including
microclimate and daylight and sunlight matters. Ultimately all
these factors led to an arrival at an optimum number of residential
units in an environment that ensured residential
quality.
 
Eight properties have been
purchased since February 2024. Current negotiations are ongoing with 17 leaseholders
and freeholders who remain on the Estate. Whilst negotiations are
ongoing, these at times have been protracted, and some leaseholders
have openly expressed a lack of willingness to sell their property
at a market rate in line with the Council’s
process.  The Council will not be
able to deliver the Project without obtaining vacant possession of
all the remaining third-party legal interests within the
Estate.
 
A CPO can be used to achieve
‘clean’ title and to ensure the Project can progress as
planned. However, if the decision is made to exercise CPO powers,
the Council needs to be satisfied that proceeding with the CPO is
in accordance with MHCLG’s non statutory guidance on the
compulsory purchase process – Guidance on the Compulsory
Purchase Process (‘the CPO Guidance’) – that
there is a compelling case in the public interest for the use of
compulsory purchase powers and the use of CPO powers is progressed
as a last resort. As set out in the draft SOR at Appendix 2 the
Council is satisfied that such a compelling case exists,
specifically in a planning context this can be demonstrated as
follows:
 
The
Project is strongly supported in planning policy both locally and
nationally:
 
Specifically with regard to National Planning Policy, the
proposals align with the following aspects of the National Planning
Policy Framework ‘NPPF’ and more detail can be found in
the draft SOR:
 
(1)         
Chapter 2 of the NPPF, specifically dealing with
‘Achieving sustainable development’
(2)         
Chapter 5 of the NPPF, ‘Delivering a
sufficient supply of homes’
(3)         
Chapter 8 of the NPPF, ‘Promoting healthy and
safe communities’
(4)         
Chapter 11 of the NPPF, ‘Making effective use
of the land’
(5)         
Chapter 12 of the NPPF, ‘Achieving
well-designed places’
(6)         
In relation to Local Planning Policy, there are many
policies which align with the Project and are detailed
significantly in the draft Statement of Reasons however, these
include:
(7)         
The London Plan adopted in March 2021, and more
specifically, policies H1, S3, S4, S5, H4, H6, H8, GG2, D1, D3, D4,
D5, D6, D7, D8, D9.
(8)         
The Council’s Local Plan adopted in February
2018 and more specifically, policies SP5, DM16, DM18, DM19, DM23,
SP2, DM1, DM10, SP4, DM15.
 
The Project will deliver
significant economic, social and environmental benefits to the area
and these are detailed in the draft SOR. These benefits further
demonstrate that the Project will contribute to several of the
Council’s policy priorities as outlined in the Mayor’s
Business Plan 2022-2026, that will bring a welcome boost to the
local economy. The new development will lead to job creation,
increased commercial activity and investment in the area, as well
as providing new housing, community facilities and improved public
realm environment. The Project will also improve access to
essential services and to the promotion of social inclusion, with
the design of a sustainable development contributing to the
improvement to the quality of life for residents. Phase 1 alone
will deliver all of these benefits, and Phase 2 will increase the
scale of these benefits.
 
The Project (including the cost
of land acquisition and payment of compensation) will be funded by
the following sources of income:
 
GLA
Grant funding in the sum of £52.25 million;
 
DLUH&C Grant funding in the sum of £1.258 million;
and
 
The
remainder of the Project will be funded by the Council and the
current project budget has been estimated at £171m. The
Council is funding the Project through the Housing Revenue Account
and debt funding from the Public Works Loan Board.
 
The Council have undertaken the
relevant financial assessments including a viability assessment
against the projected Project costs and the Council are confident
they have sufficient approved budget to deliver the Project as well
as to fund the acquisition of land interests and payment of
compensation. The use of CPO powers to secure vacant possession of
the Estate is required for the Council to move the Project forward
and in turn will provide much greater certainty as to the delivery
of the Project and ultimately the aims and benefits sought by the
Council.
 
Any landowners which are
affected by the CPO would be compensated for their land interests
in accordance with the CPO Compensation Code.
 
The CPO Guidance states that
powers to compulsorily purchase land are intended to be used as a
method of last resort. The Council are expected to take reasonable
steps to acquire the Estate by agreement. Attempts have been made
to acquire the interests in the Estate by agreement for near to
three years. Whilst the Council continues to negotiate with
interest holders, to ensure that the land and interests in the
Estate are acquired, if they cannot be acquired by agreement in a
timely manner to enable the redevelopment of the Estate to proceed,
the Council considers that a CPO will now need to be prepared in
parallel.
 
The Council are currently
working towards the following timescale for the Project, which is
based on the phased construction plan submitted with the Planning
Application:
 

 

Figure 2 - note: these dates are illustrative and
are subject to change.
 
It can take c. 12-24 months
from preparing the CPO documents to vesting of the land, properties
and rights within the Estate. Therefore, based on the proposed
phasing programme, the Council must now proceed with making a CPO
so that the timescales indicated above can be achieved.
 
If the making of the CPO is
approved, the Council will undertake all necessary steps to
finalise the documents and carry out all relevant statutory
notification procedures.
 
The Estate currently has two
active private sector temporary accommodation units.   The Council has a set of arrangements to
identify and manage the issues affecting and enabling the rehousing
of these residents whose homes will be specifically impacted by the
Project. The rehousing of these residents will be in line with the
Council’s allocation policy, good practice and legal
requirements.
 

Alternative options considered

Paragraph 109 of the CPO
Guidance states that it must be considered whether the purpose for
which the acquiring authority is proposing to acquire the Estate
could be achieved by any other means. The Council has fully
considered this issue and specifically the following
options:
 
Option 1 – Avoid the
need to acquire entirely. The Council has considered
extensively whether the Project can be delivered without acquiring
the Estate. As detailed in the SOR, given the condition of the
Estate currently, it is vital to demolish the buildings on the
Estate and replace these with dwellings of a better modern
standard. In order to demolish, the interests in the buildings need
to be acquired and the buildings vacated. Avoiding acquisition
would place significant risk on the ability to deliver the Project
and would ultimately undermine the Landlord Offer and the
Council’s commitment to the residents. The Council has therefore
concluded that this is not an option.
 
Option 2 – Acquire the
land by agreement only. To achieve this option, the Council
would need to depend on the successful completion of individual
negotiations. As stated earlier in this report and the SOR,
although negotiations are ongoing (and have been for some time)
with leaseholders and freeholders who remain on the Estate, and who
are supportive of the Project, negotiations with some of the
leaseholders and freeholders have been protracted with incomplete
success to date. Some are opposed to selling their property within
the required timescale and at an agreed price. Whilst the Council
could continue to pursue this independently, it is realistic to
acknowledge that, given the time spent on negotiations to date,
acquisition by agreement may not be possible. The Council has
concluded that acquiring the Estate by agreement only is not an
option.
 
Option 3 – acquire
some of the land by agreement, and process with making a CPO at a
later stage.  The Council has
considered this option which is largely similar to Option 2. Based
on the current phasing programme, to consider progressing a CPO at
a later stage would provide greater uncertainty to the delivery of
the Project, particularly as negotiations over the last two and a
half years have only achieved the completion by agreement with 35%
of the leaseholders and freeholders who own their homes. The impact
of which is that the Project is likely to be delayed, which could
have an overall risk to the delivery of the Project. The Council
has therefore concluded that this is not an option.
 
Option 4 – seek to
acquire by agreement with the progression of a CPO in parallel.
The Council could seek to continue their negotiations whilst
progressing the CPO. This would avoid any potential delay to the
Project and is the Council’s preferred option. Whilst
continuing to actively pursue negotiations, the CPO process also
provides a statutory mechanism for objections and payment of the
appropriate compensation so that interest holders are not
disadvantaged by a CPO. In addition, this route also allows the
Council to acquire any third-party interests which may burden the
land and could in turn prevent development.
 
Following these considerations,
the Council has concluded that the proposed Project could not be
delivered without pursuing the acquisition of the Estate.
Therefore, without the security of a supporting CPO, there is a
real risk that the Council will not be able to secure the land by
agreement in a timely manner which could in turn compromise the
delivery of the Project.
 
On this basis, Option 4 is
recommended so that CPO powers can be used in parallel with the
ongoing negotiations.
 
The Council has fully
considered the delivery programme and the plan offered and has
concluded that there are no other suitable alternatives to secure
the benefits of the Project.
 
There is no imminent prospect
that the Estate can be acquired other than by use of the
Council’s statutory powers. Negotiations will continue in
parallel until such time as the Project timetable precludes them.
The Council is therefore satisfied that the CPO is being pursued as
a method of last resort.