The purpose of the Town & Country Planning Act 1947 was to create a comprehensive national system for land use control in post-war
Britain, establishing that land ownership no longer granted the automatic right to develop; it mandated local authorities to create
development plans, required planning permission for all development, controlled urban sprawl, and introduced a "development charge"
to capture increased land value from planning gains, laying the groundwork for modern planning in the UK.
Key Objectives &
Provisions:
Context:
In essence, the Act nationalised development rights, democratised planning decisions,
and established the fundamental structure for how land use would be managed in the UK for decades.
The Act introduced a development
charge, essentially a "tax on betterment". This charge was levied whenever development was carried out, aiming to capture the value
increase (betterment) arising from planning permission. The Act effectively nationalised development rights, meaning landowners lost
the right to develop their land, but they could enjoy the existing use, and those whose land was about to be developed could apply
for compensation.
Consequently, the Town Clerk advised the Bank Committee that a detailed register or inventory of the Bank's
land and property holdings (a "terrier") should be compiled as at the 1st July 1948, showing:
(a) Legitimate existing use, and
(b) Precise
details of accommodation,
which might prove of importance under the Act at a future time.
To ascertain the information required
under (b), it was necessary for Mr Cecil M Glover, one of the Bank's Valuers, to visit each property, to take detailed measurements,
and submit a schedule.
This terrier of all Bank properties and land thus recorded the position at 1st July 1948 should any question
arise under the above Act. The properties were listed under four headings:
(A) Permanent Bank premises, excluding those in redevelopment
areas.
(B) Bank premises in redevelopment areas.
Attached to the schedules was a report, dated 28th February 1949, prepared by the General Manager of the Estates Department:
The majority are modern buildings
situate in good shopping centres, and would readily be convertible to retail shop premises, thus attracting a higher value than their
present use as banks or offices, which are within Class II of the Use Classes Regulations of the Third Schedule to the Town and Country
Planning Act, 1947. Any such change of use would require planning permission, and would attract a development charge, valued upon
the basis of the difference between the existing value and the value with the new planning permission, less the cost of the conversion.
Any
Part VI claim for depreciation, therefore, it would be in respect of this loss of value. To make any such claim it is necessary to
assume a specific future date when the buildings would cease to be used as Banks or Offices, and would be either converted by
the Corporation into retail shops and let on lease or be sold for this purpose; the latter being unlimited in view of the Corporation policy of non-sale of freehold interests. It will be agreed that such a possibility cannot be anticipated within any reasonable period
capable of practical valuation, and accordingly it is considered that no depreciation claims could be substantiated under this heading.
It
should be mentioned here that any claim made for a sum more than 1/10th of the "existing use" and so that even if such a future charge
could be anticipated it would obviously be so far ahead that the presence of the capital amount of the claim at the present value
would be deferred with the possibility of it being thereby reduced to less than the 1/10th value of the existing user.
Extensions
or Alterations for
Bank purposes.
A number of the buildings can be considered to cover the sites fully, and will not require future
extensions. Some others may require varying degrees of extensions in the future, and will, at law, attract a development charge if
the development is greater than 10% of the buildings now used for other than bank purposes is absorbed into the bank user. If assessing
a charge, the cost of conversion would be allowed against the increased value so that it is probable that in most instances there
would only be a comparatively small or even a nil determination. Plans and costs of such extensions would have to be considered before
a charge or claim could be estimated.
If there are a number of Banks where enlargements are thought to be probable within a reasonable
period it might be advisable to submit claim forms S.1., omitting the amount of the claim in the optional clauses.
If, then,
the Central Land Board does not admit them, this would be useful evidence for the Corporation if and when a development charge is
made subsequently, when enlargements become necessary.
Parts of Premises not used for Banks.
With regard to those
portions of the premises which are let for dwelling accommodation, hairdressers, offices and dentists. These could be treated as separate
"units" as a basis of claim if considered justifiable.
To use any units which are now dwellinghouses, for commercial or professional
purposes, will undoubtedly attract a development charge, but the Bank would receive a higher rent, which, in effect, represents the
receipt of interest on capital investments. Viewed from this angle, there would be no actual loss of capital, but only a failure to
receive the benefit of the increment value which is now diverted to the State.
Against this must be set the fact that the dwelling
accommodation is probably controlled under the Rent Acts, unless there are any "service" tenancies, so that possession cannot be obtained
unless the tenants leave voluntarily, or are given satisfactory alternative accommodation. Should they do so, Defence Regulation 68C.A.
has then to be taken into account, which requires the consent of the local housing authority to use dwelling accommodation for any
other purpose. Could this be allowed for some years in view of the present acute housing shortage? Yet again, there may be a definite
need for say dentists as a social need, arising out of the National Health Service Act.
Special Cases.
No 102 Church Road, Yardley.
In
this instance there is a fully developed corner block of buildings comprising the Bank in the centre, and two shops on each wing.
One of these is used by the City Treasurer as a Rates Office. It is considered that this would be let at a higher value for retail
purposes, and, therefore, attract a development charge should there be a change of use in the future.
Would it not be advisable
to submit an S.I. claim form, omitting the optional clause?
No 2 Belchers Lane, Alum Rock.
It is assumed that the War Damage
in this case would receive a "cost of works" payment. The Bank Committee will be able to rebuild as necessary up to the cubic content
of the original building, plus the 10% tolerance of the Third Schedule, without development charge. Thereafter it would seem that
this building would be in a similar position to the remainder.
Mr Glover, the Bank's Valuer, concurs with the above.
With
regard to the Bank premises in the redevelopment areas (List " B"), I give an extract from a letter from the Town Clerk dated 15th
December 1948:
"In due course certain of such properties will be required for redevelopment of the Central Area, and when this
time comes the Bank Committee will be required to appropriate the land from use for Bank purposes over to use for redevelopment purposes.
The capital sum credited to the accounts of the Bank Committee from the Redevelopment Committee will be based on existing use
value. The Bank Committee having paid originally on the acquisition of the property on unrestricted use value, this would clearly
seem to be a case where a claim should be made against the Compensation Fund."
Although Branches in List "A", with the exception
of Harborne and Yardley, appear to be fully developed and so in use in respect of either Banks or Flats, they are not envisaged as
opinion appears to be somewhat qualified whether or not for depreciation of value should be submitted to Central Land Board.
In these circumstances, to safeguard the full interests of the Bank, I suggest that claims on form S.1. should be submitted in all
these cases, omitting the amount of the claim in the optional clause.
With regard to the following, however,:
(B) Bank premises
in redevelop areas.
(C) Temporary Bank premises.
(D) Land.
there is no question but that claims for depreciation of value are necessary
and these will be submitted on form S.1, and the amount of the claim in the optional clause as above.
The Bank's Valuer, C M Glover, charged the sum of £107. 2. 0d for professional services, inspecting all Bank properties, taking detailed measurements, and submitting the schedule.
On July 18th 1949, the Deputy Town Clerk reported that all forms had been dispatched to the Central
Land Board and had been acknowledged.
On May 8th 1950, the following report of the Town Clerk was submitted:
TOWN &
COUNTRY PLANNING ACT, 1947.
SECTION 59.
PAYMENTS IN RESPECT OF WAR DAMAGED LAND.
Your Committee will remember that under the War
Damage Act 1943, properties which suffered war damage were classified as 'total loss' or 'not total loss'; in the former case they
qualified for a value payment, and in the latter case for a cost of works payment.
The recipient of a value payment may be seriously
prejudiced by the effect of the Town and Country Planning Act 1947. The value payment represents the difference between the March
1939 sale value of the property before and after the damage, increased by 45 per cent, but these payments were assessed on the assumption
that the owner would be able to realise any development value which his landed possessed. The after damage value was, therefore, taken
as the best price which could be obtained for the land on the basis that it could be developed for any purpose. The effect of the
Town and Country Planning Act, of course, is that the value of the land is restricted to its existing use, and that it cannot be developed
for any other purpose without the payment of a development charge, and unless the owner is hoping to get the full reduction in value
in payment of his claim against the £300,000,000 for loss of development value, he will suffer loss through the combined effect of
the War Damage Act 1943 and the 1947 Act.
It is not certain that the owner will receive full compensation for loss of development
value under the Town and Country Planning Act 1947, and Section 59 of the 1947 Act was designed to give redress; it gave the Treasury
power to make a scheme for additional payments to be made in addition to any value payment, and the Scheme and Regulations have now
been made.
Claims may be made by the Council under the Section 59 Scheme in respect of certain property in which the Corporation
held an interest on the 1st July 1948 which was classified as a total war damage loss, and in respect of which the Corporation were
qualified to receive the whole or part of a value payment which was reduced because of the inclusion in the after damage value of
the development value. This includes cases in which the value payment was nil because the after damage value exceeded the before damage
value.
Claims have to be sent to the Central Land Board not later than 31st January 1951, but it is desirable that any claims
should be completed in good time and I am anxious that they should be in my hands by 1st August 1950, so that they can be forwarded
in due time. It is not expected that claims will be very numerous, but I assume that your Committee will wish to instruct your Chief
Officer to consult with the General Manager of the Estates Department and with me to decide whether any claims can be made in respect
of property under the control of your Committee and, where claims can be made, to forward them to me by the 1st August 1950. I propose
to write to Chief Officers to draw their attention to various points of detail with which your Committee will not wish to be concerned.
On
October 6th 1950, the following letter from Mr Wallace Smith, General Manager of the Estates Department was received:
Town and Country
Planning Act, 1947.
Municipal Banks.
Depreciation Claims - Section 58.
I have now received from the District Valuer formal notices
in respect of a number of Municipal Banks, stating 'it is proposed to determine that there is no development value in the land' and
that if the Corporation agreed, the Central Land Board will proceed to make their formal determination.
If, however, objection
is made, notice in writing must be given within 60 days with a statement of the grounds of the objection and the amounts of the 'restricted'
and 'unrestricted' values by reference to which it is considered the development value should be determined. These objections will
then be considered before the Board make their determination.
If, however, objection is made, notice in writing must be given
within 60 days with a statement of the grounds of the objection and the amounts of the 'restricted' and 'unrestricted' values by reference
to which it is considered the development value should be determined. These objections will then be considered before the Board make
their determination.
I have examined those cases now submitted by the District Valuer, and having regard to the Development Charge
Exemptions Regulations 1950 and the Use Classes Order, 1950, (S.I.1950 No 1131), which are amending regulations, I have formed the
opinion that there is no claim which can be substantiated in respect of the portions of the promises which are now used for bank purposes.
This
is due to the fact that the new regulation now permits the interchange of user as between a shop and an office (and for the purpose
of the Use Classes Order a bank is defined as an office) without attracting a development charge.
We now have to consider the
question of the portions not used for bank purposes, which comprise either a residential flat, office, hairdresser, dentist, etc.
etc.
It would seem that the only cases which are likely to attract a development charge are those which are now used for residential
purposes, where at some indefinite future time vacant possession would be obtained, and there would be a re-letting for purposes indicated
in the last paragraph. It will be agreed that this future time factor cannot be assessed for the purpose of valuation and that the
probability of change of use as limited by Defence Regulation 68 C.A. and also the rent restrictions acts.
In addition, although
the banks are mainly situated in good central shopping positions, there is only a limited demand for special purposes in each district
where there are many other suitable premises which may become available. If we maintain that there is an assessable potential value
for change of use within a reasonable period, say 10 years, valuations will have to be made to show this potential increase in capital
value of the premises and these amounts must be deferred for ten years.
I am of opinion that such valuations will be seen as
fictitious and will be difficult to substantiate. If the District Valuer would not accept them, particularly if this question applies
to such a large number of branch premises with dwelling accommodation over throughout the city and country.
Accordingly, I recommend
the Bank Committee to accept the Central Land Board's proposed determinations as far as the existing fully developed premises are
concerned, I should be glad to receive confirmation as soon as possible.
With regard to those premises and sites which are temporary
buildings; those will be dealt with separately as they arise.
Yours faithfully,
(Signed) WALLACE SMITH
General Manager.
The Bank Committee resolved that "the foregoing report be received and the matter be referred to the Town Clerk in conjunction with the General Manager and General Manager of the Estates Department and for a report be submitted at a later date".
In addition to considering the position of the Bank and its properties following the enactment of the Town and Country Planning Act, 1947, the Town Clerk was also concerned that implications of the Act may apply to the Bank's mortgagors, and consequently, the General Manager wrote a letter to its mortgagors.