How farmers can avoid being bulldozed by infrastructure firms

Critical infrastructure projects requiring the acquisition of private land is pitching farmers into David versus Goliath battles. Farmers Weekly asked experts how landowners can avoid getting bulldozed by corporations.

Nuclear power stations, transport links and energy network upgrades are just a few of the large-scale engineering projects that are becoming more common in the UK.

Strutt & Parker’s land management partner Rhodri Thomas says that 40 years after privatisation, the development of privately owned public services has changed the playing field significantly.  

See also: How farmers can make the most of year-end tax savings

“The magnitude of infrastructure projects today can dwarf even the mightiest estates,” he says.

Central to the change is the financial and political imperatives that come with the investors backing the work.

“Despite huge scale and resources these investors are risk adverse and there are billions of pounds at stake,” Mr Thomas adds.

“The company behind an infrastructure project, which may have a political involvement in trying to secure funding from around the world, has to try to take as much uncertainty out of the project as possible at an early stage.”

This has led to swift land acquisition becoming essential, and the arduous, time-consuming process of seeking compulsory purchase orders (CPOs) is playing second fiddle to private negotiated settlements between the developer and the landowner.

Mr Thomas says negotiated outcomes “require guts” on behalf of farmers and can be “emotionally draining” but can ultimately lead to a more satisfactory agreement.

“We have regularly realised compensation between 300% and 400% of the original offer,” he says. 

“Unwelcome” rights of entry

The Planning Inspectorate lists 107 projects that are under way which it considers to be in the interest of national infrastructure. These plans largely bypass local government with key decisions taken centrally. 

Plans don’t have to be approved or even be in the planning system for it to start affecting landowners, warns Mr Thomas.

Many developers are statutory undertakers, backed by a suite of powers granting them access to property to carry out land suitability assessments and feasibility studies.

“Landowners can face the consequences of unwelcome rights of entry very speculatively and well in advance of a project which may not come to fruition for decades,” says Mr Thomas.

Written notice will be given prior to any access being taken, and it’s at this early stage that farmers should start to seek professional advice.

Sholto Moger, also a Strutt & Parker land management partner, says: “While these companies have far-reaching powers, their powers are very specific and well defined. They might have power of entry for a non-invasive survey and will put this in writing which can be quite shocking for farmers.

“Frequently they can go well beyond the powers they’re afforded – drilling holes and setting off detonations for example – so getting professional advice early is vital.”

“The magnitude of infrastructure projects today can dwarf even the mightiest estates”
Rhodri Thomas, Strutt & Parker

Cultivating good professional relationships and trust at this early stage is crucial, Mr Moger adds.

“The sooner each party understands where they stand, the better the outcome. Once trust has been broken by one side it makes the relationship more difficult.”

Compulsory purchase powers 

Despite the weight of the law and the scale of resources available to the companies looking to acquire land, their Achilles heel is always time.

Investors want to know when a project is going to be operational and beginning to pay back a return. 

“If a developer is looking to acquire and use CPO powers, that may not guarantee anything by a certain date,” says Mr Thomas. “A negotiated outcome puts everyone in a much clearer position.”

The value of the agricultural land, while important to negotiations, is usually just one small part of discussions which take into account disturbance to the environment, local services, visual impact, property blight and a whole host of emotional considerations.

“Environment mitigation is a massive part of the negotiation. It’s not just for the landowner but for the wider community,” Mr Thomas says. “We’ve had programmes of tree planting well outside the client’s interest because they know other people enjoy the local area and the views it offers.” 

But central to every negotiation is the process of attributing a value to the piece of land which is critical to the timely completion of the project.

Landowners may have to pay for advice if they want a detailed understanding of the importance of their land to an infrastructure project and by what date the company needs use of it, says Mr Thomas.

“In doing so we look to take a seismic shift from it being valued as a piece of farmland to being a unique component to securing deliverability of a project by a certain time,” he says.  

“Once trust has been broken by one side it makes the relationship more difficult”
Sholto Moger, Strutt & Parker

Any negotiation should also aim to end on good terms.

“The sheer scale of the projects means that they will take years, sometimes decades, from inception to completion,” Mr Thomas says. “Some affected landowners can have to deal with the fallout for an entire lifetime and this may involve future negotiations which will be built on past relationships.”

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Case study: farmland at Hinkley Point C

The construction of Hinkley Point C power station in West Somerset – the largest civil engineering project in Europe – is an example of a successful negotiated settlement, says Mr Thomas.

Confidentiality agreements cover the details of the deal struck between EDF Energy and the owner of the West Somerset land now being used to construct two nuclear reactors which the European Commission recently cites may cost as much as £24.5billion.

But Mr Thomas says: “This was a good example of how taking professional advice and making decisions based on matters of principle ultimately delivered a significant improvement on the original offer”

“Most importantly, [it] allowed a creative way of working with the developer to achieve tighter controls over the physical impact of the project and some significant funded benefit for the surrounding area and environment.”