That’s it then, we’re off, part 5

(… continued from That’s it then, we’re off, part 4 posted on 29 Mar 2016).

In the press release marking the publication of the Select Committee’s final report that I referred to in part 2 of this blog series, the HS2 Action Alliance (HS2AA) reports “slightly better news on compensation” from the Committee. It was obvious during the public sessions that the Members of the Select Committee were concerned with aspects of the compensation regime – this was hardly surprising, in view of the Members hearing disturbing tale after disturbing tale from citizens who, in many cases it appeared, were unable to comprehend why officialdom has conspired to wreck their lives and prospects and is unwilling to make amends.

The Committee’s concern is reflected in a whole chapter (Chapter 5) of thirty-nine paragraphs (258 to 296) being devoted to compensation in the final report. This follows the rather exceptional step of an interim report by the Committee, published in December 2015, that is devoted entirely to this topic.

The “slightly better news on compensation” referred to by HS2AA is that the Select Committee can claim some success in registering an improvement the treatment of applicants, and has made some proposals to improve the Need to Sell (NTSS) scheme. However, HS2AA also comments that “the wording in the report will give HS2 Ltd and the Department for Transport plenty of wiggle room”.

Perhaps the most effective bargaining counter that the Select Committee has employed in its quest for improvements in the compensation regime is to maintain a “watch list of petition cases” where it sees the payment of compensation as appropriate, and is, we are told, “content” that “the outcome in a high proportion of instances is as [the Committee] would have wished” (see footnote 1). Due, I am sure, in no small part to the Committee looking over the shoulder of those administering the NTS scheme, the final report is able to boast that the rate of claim acceptance of the NTS scheme is “hovering at around 60%”, which is, we are told, “better than for the Exceptional Hardship Scheme”. For applicants “approaching retirement or already retired” the rate rises to 65 per cent (see footnote 2). Now that the Select Committee is no longer able to oversee the operation of the scheme, it will be interesting to see whether these acceptance rates can be maintained.

Whilst the Select Committee is able to cite recommendations that it has made to which the Government has “responded positively” (see footnote 3), it still appears that, as I suggested in my blog Looking sheepish (posted 27 Feb 2105), the Select Committee has not succeeded to date in getting a single word altered in the guidance notes that set out the rules of the NTS.

It does appear, however, that the Government now concedes that changes to the guidelines for the NTS scheme, or even to the scheme itself, may be called for to address two particular issues raised by the Select Committee. These matters are, apparently, currently under review and the Government is planning to make its views known, and make any changes to the scheme that it considers appropriate, “alongside the launch of the Need to Sell scheme for Phase 2a of HS2”, which we are told to “expect to happen this Spring” (see footnote 4).

The first of these two issues is the particular problems that arise if family homes cannot be readily sold to meet changing circumstances that arise from increasing age; what the Select Committee has coined “age and stage”. The final report clearly signals a need for changes in the way that this matter is approached, reflecting as it does that the 5 per cent higher acceptance rate for this age group is a much lower differential than it would expect to see (see footnote 5). However, the Select Committee will be disappointed that the Government has failed to identify what changes will be made to the NTS scheme “before Third Reading” of the Phase 1 hybrid Bill, as it had requested (see footnote 6).

The second issue was brought to the Select Committee’s attention by a case where an offer to purchase under the NTS scheme was withdrawn when a lower offer was made by a private purchaser (see footnote 7). The Government appears to accept the point, in principle, that such an offer should only be withdrawn in favour of a private sale at the same, or higher, price. On the closely associated point of the requirement not to have received an offer within 15 per cent of the realistic asking price, the final report records that it has previously been agreed by the Government that this will be reviewed at the same time (see footnote 8).

Whether it will indeed transpire that the Select Committee is justified in claiming a victory on these two issues will only be clear when the Government makes the details of the proposed changes public.

Other areas where the Select Committee claims that its interventions have secured improvements in the NTS scheme are:

• Treating a refusal to market by estate agents, or a demand for an upfront fee, as proof of inability to sell (see footnote 9)
• Improving the time taken to consider applications and automatically reviewing applications after eight weeks (see footnote 10)
• Taking account of successful applications from neighbouring properties when assessing satisfying the “effort to sell” criterion (see footnote 11)
• Making more use of valuers with local knowledge (see footnote 12)
• Making improvements in the promotion and advertising of the compensation schemes (see footnote 13).
• Recognising areas “that will suffer especially egregious effects from construction” (see footnote 14)

There are, however, a number of issues where the Select Committee has been unsuccessful in securing a positive response from the Government, or has only secured a limited concession:

• Recognising where properties will suffer the cumulative effects of both phases (see footnote 15)
• Considering retrospective compensation cases (see footnote 16)
• Reviewing the rateable value cap for business premises in London (see footnote 17)
• Approaching general practitioners directly to confirm medical details (see footnote 18)

The Select Committee has also made no real progress with the Council of Mortgage Lenders regarding zero property valuations (see footnote 19).

Finally, it is regrettable, but inevitable one feels, that the Select Committee has concluded that “the case that a property bond scheme should be preferred over other options was not sufficiently established”. I feel that to have reached any other conclusion the Select Committee would have required a more ambitious agenda for change.

(To be continued …)

Footnotes:

1. See paragraph 292 in the Select Committee’s final report.
2. See paragraphs 275 and 278 in the Select Committee’s final report.
3. See paragraph 272 in the Select Committee’s final report.
4. See paragraphs 84 and 86 in the Department for Transport publication Promoter’s Response to the Select Committee’s Second Special Report of Session 2015-16.
5. According to paragraph 279 of the final report, “It is difficult to imagine justification of less than 90% acceptance on applications by those over 70 or who will be over 70 when the project commences”.
6. See paragraph 280 in the Select Committee’s final report.
7. See paragraph 286 in the Select Committee’s final report. For details of the case concerned refer to paragraph 199 onwards in the transcript of the morning session of the HS2 Select Committee held on Tuesday 15^thDecember 2015.
8. See paragraph 285 in the Select Committee’s final report and paragraph 33 of the document Promoter’s Response to the Select Committee’s First Special Report of Session 2015-16.
9. See paragraph 271 in the final report and paragraphs 30 and 31 of the Promoter’s Response to the Select Committee’s First Special Report of Session 2015-16.
10. See paragraph 294 in the final report and paragraphs 6 and 7 of the Promoter’s Response to the Select Committee’s First Special Report of Session 2015-16.
11. See paragraph 281 in the final report and paragraphs 28 and 29 of the Promoter’s Response to the Select Committee’s First Special Report of Session 2015-16. The Select Committee has confirmed that it is satisfied with an offer from the Government that is somewhat less than was requested.
12. See paragraph 285 in the final report and paragraph 32 of the Promoter’s Response to the Select Committee’s First Special Report of Session 2015-16.
13. See paragraph 275 in the final report and the final page of the document Residents’ Commissioner’s third report: Chairman’s response.
14. See paragraph 282 in the final report and paragraph 15 of the Promoter’s Response to the Select Committee’s First Special Report of Session 2015-16. The Select Committee appears to have accepted the situation as it currently pertains.
15. See paragraph 295 in the final report and paragraph 5 of the Promoter’s Response to the Select Committee’s First Special Report of Session 2015-16. The Select Committee expresses the view that these effects “could still be better stated”.
16. See paragraphs 271 and 272 in the final report. The Select Committee appears to have accepted the situation as it currently pertains.
17. See paragraphs 283 and 284 in the final report and paragraphs 17 to 21 of the Promoter’s Response to the Select Committee’s First Special Report of Session 2015-16. The Government appears to have made no specific concessions in response to the Select Committee’s request.
18. See paragraph 293 in the final report and paragraphs 25 to 27 of the Promoter’s Response to the Select Committee’s First Special Report of Session 2015-16. The Select Committee feels that the Government’s negative response “missed the point”.
19. See paragraphs 287 and 289 in the final report.