High Court backs Newham’s Compulsory Purchase of Final Flat in Redevelopment Scheme

The High Court has upheld the London Borough of Newham’s Compulsory Purchase Order (‘CPO’) of the final leasehold flat in James Riley Point, a 23-storey residential tower block earmarked for major regeneration.

Mr Justice Mould dismissed a legal challenge brought by the leaseholder under section 23 of the Acquisition of Land Act 1981.

Sharpe Pritchard acted for the London Borough of Newham throughout the entire CPO process.

The CPO relates to part of a wider redevelopment plan for the Carpenters Estate in Stratford, London and was made by the London Borough of Newham for the purpose of facilitating the carrying out of a comprehensive scheme of development, re-development and improvement of James Riley Point to deliver high quality refurbished homes, a community centre and improved public realm.

The claimant, who had lived in the flat since 1994, challenged the validity of the CPO made by the London Borough of Newham and confirmed by the Inspector appointed by the Secretary of State for Communities Housing and Local Government on three grounds:

(1) Viability;

(2) Failure to consider the long history of failed attempts by Newham to refurbish James Riley Point when concluding that Newham had taken reasonable efforts to acquire the property by agreement; and

(3) The excessive use of CPO powers.

Ground 1: Viability

The claimant argued that the Inspector failed to properly assess whether the redevelopment scheme was financially viable and adequately funded. She contended that, in line with the principle established in Secretary of State for Education v Tameside MBC [1977], the inspector had a duty to conduct a reasonable inquiry, which in this case required independent financial scrutiny of the scheme’s budget and funding arrangements.

In his submissions, Douglas Edwards KC who was instructed by Sharpe Pritchard for the London Borough of Newham made it clear that Newham’s evidence to the public inquiry highlighted that the scheme was not commercially viable in the sense of generating a return on the investment being that the scheme was to deliver affordable, largely social rented housing and community floorspace.

Nevertheless, Douglas Edwards KC submitted that Newham’s evidence demonstrated that the scheme was both fully funded and capable of being delivered within a reasonable timescale.

Mr Justice Mould rejected the claimant’s argument. He found the inspector had considered the information available and reasonably concluded it was sufficient to determine that the scheme was viable and deliverable within a realistic timeframe.

The inspector had also properly addressed and rejected the claimant’s contention that an independent cost review was essential and that there was no reliable basis for assuming loan support from the Public Works Loans Board.

The judge concluded that the inspector’s approach was not Wednesbury unreasonable and that his reasons were lawful and adequately explained. He further confirmed there was no misinterpretation of the CPO guidance.

Ground 2: Reasonable efforts to acquire by agreement

The claimant contended that the inspector had overlooked the history of failed refurbishment attempts and the resulting poor living conditions endured by her family. She alleged that Newham had failed in its duties both as a landlord and as a housing authority and argued that the inspector ought to have addressed these alleged breaches in his findings.

However, Mr Justice Mould rejected this argument. He pointed out that while the inspector had acknowledged the ongoing uncertainty surrounding the regeneration of the block, his responsibility was not to evaluate previous shortcomings or delays.

Rather, the inspector’s role was to assess whether the current redevelopment proposal and the Council’s plans for its delivery were appropriate. The judge concluded that any alleged past mismanagement was irrelevant to the legal issue of whether the CPO should be confirmed.

Ground 3: Excessive use of CPO powers

The claimant argued that using CPO powers to acquire her leasehold was excessive and unnecessary, as she had offered a licence to allow access to her flat for refurbishment. She claimed the inspector misunderstood her case and failed to give adequate reasons for rejecting it.

However, the inspector and the court found that the Council needed full vacant possession to proceed with the regeneration scheme, and no realistic agreement had been reached despite prolonged negotiations.

The inspector concluded that the CPO was a proportionate last resort. The court agreed, finding the inspector had properly addressed the issue and given sufficient reasoning for rejecting the claimant’s objections.

What does this mean for Local Authorities going forward?

This case serves as a timely and important reminder for local authorities of how the requirement to consider “the potential financial viability of the scheme” under section 226 of the Town and Country Planning Act 1990 is to be interpreted—particularly in the context of authority-led regeneration projects that are not designed to be commercially profitable.

Mr Justice Mould’s judgment confirms that financial viability in this context does not require a scheme to generate profit, but rather to be fundable and deliverable within a reasonable timeframe.

For publicly funded schemes aimed at achieving social outcomes,such as affordable housing and estate regeneration, internal approval processes, such as cabinet-approved budgets and access to sources like Public Works Loans Board funding, can provide sufficient evidence of viability. There is no absolute requirement for an independent financial appraisal, unless the evidence before the decision-maker is clearly inadequate.

Going forward, local authorities should ensure that they clearly demonstrate the financial underpinnings of their schemes, even where those schemes are not profit-making.

They should document the decision-making process carefully, showing how viability has been assessed in terms of funding certainty, deliverability, and alignment with policy objectives.