The Infrastructure Forum

Pay residents compensation for new development

Press Release   •   Aug 24, 2012 15:40 BST

PRESS RELEASE: For publication Tuesday 28 August 2012

Compensate residents for nearby developments says infrastructure think tank £8,000 payments for residents near infrastructure and housing development

An infrastructure think tank says that residents should receive compensation if they suffer detriment from nearby development.

The report has been submitted to ministers considering reform of the Town and Country planning system as part of the government's Growth Agenda.

It says that the move would unblock a planning system which can impede necessary new infrastructure and housing, and would reduce "nimbyism" by being seen to be fair and reasonable.

The scheme is based on legislation in the Netherlands, which has proved successful in stimulating new development projects over the past twelve years. Dutch residents have received €20 million compensation per annum, averaging €10,000 per successful claim. This would equate to an average £8,000 in Britain.

The total cost of introducing the scheme in England and Wales is estimated at £80 million a year, for a three year trial - a fraction of the £40 billion guarantees of infrastructure projects recently announced by the Government.

The cost to government could be even less if existing incentives under Section 106 schemes, the Community Infrastructure Levy and New Homes Bonus are reallocated to the new system, says the study.

Dutch model fair to residents

"The Dutch system has shown that direct cash compensation awarded by independent assessors to local residents has proved more effective in overcoming opposition to development than payments made to larger council or community groups themselves, which do not change the attitudes of individual residents" say the authors of the study for The Infrastructure Forum.*

"In Britain at present residents miles away from a development think they have everything to gain and nothing to lose by objecting to new roads, rail lines, housing or business development.

Changing the system to compensate those who can prove detriment would be fairer to them, reduce the incentives to form "nimby" groups or go to court, and help unblock Britain's clogged planning system", says the report.

"The scheme has already been tried and proved to work in the Netherlands. It is more suitable than the approach adopted in France, which relies on distributing benefits to 36,000 local communes. The French system works because the communes are close to their residents and much smaller than the 342 local planning authorities in England" say the authors.

Turn around public attitudes

The plan recognises that there is a big benefit to economic regeneration arising from development and the uplift in value ought to be properly shared with residents in the area.

"Like the uplift in the shares of privatised industries which created a generation of ‘Sids', the scheme could turn around public attitudes to necessary infrastructure and housing development" says the report.

"Dutch research suggests that development only causes detriment to a small proportion of adjoining owners, especially those within 50 meters of a development, properly deserve compensation. Once they are seen to be treated fairly much of the steam disappears from contentious planning decisions" say the report authors.

Residents receive cash compensation for the detriment but are expected to cover some "social risk" themselves - for example, if they buy a house near to an airport they must be expected to assume that some of the risk will be that the airport will expand as part of normal societal risk.

For further information:

Graham Mather, President, The Infrastructure Forum
Telephone: 020 3174 3200 or 07836 325133

*Compensating for Development: How to unblock Britain's Town and Country Planning system by Marcus Corry, Graham Mather and Dorothy Smith
Download from The Infrastructure Forum

Follows an extract from the report, setting out details of how the scheme operates.

Table 5
How the Dutch Compensation Scheme works
• Local authorities handle planning proposals and grant planning permission under Spatial Planning regimes.

• Residents who believe they will be detrimentally affected by a planning permission can apply to the local authority for compensation, setting out the basis of the claim and the amount being claimed.

• An application must be within 5 years from the date on which the planning permission was granted.

• The local authority will charge applicants a fee, which is to be reimbursed if the claim is upheld.

• If the claim is upheld the local authority is to reimburse the claimant all reasonable costs of legal representation and other expert assistance used to establish the claim

• It is the responsibility of each local authority to lay down rules regarding the format and processing of an application for compensation.

• Where planning permission is granted for a planning proposal which has been wholly or partly promoted by a public body other than the local authority, the authority may request that public body to contribute to the costs of compensation.



The Infrastructure Forum holds roundtables, discussions and conferences on infrastructure policy, financing and investment and an annual policy summit at Hartwell House.