Mr. Eddie Taaffe:

The fund is in place and local authorities have been active in drawing it down and acquiring land. The main reason CPOs have not been more of feature is that local authorities have had a land bank to deliver on. They have been focusing on delivering the associated projects, but they are now looking farther out. At present, there are 30,000 to 35,000 social houses in the local authority pipeline. Local authorities were focusing on activating their existing landbanks and getting projects through planning and finished on site. Now they are starting to say they need to start talking about delivery in 2028, 2029 and 2030. They have been acquiring land but land is really not available on the market in many cases. The alternative is CPOs.

To be fair, CPOs are a last resort. We like to do things by agreement. There is a misconception about CPOs. They are more expensive than buying land by agreement because the market value must be paid. There is a risk to local authorities in using CPOs. For example, I was involved with one where the valuer said the land would go for anything between two given prices, but there was a very significant difference between the two. It can sometimes be difficult enough to quantify what the final CPO cost will be, but we are certain that it is a matter of market value plus a percentage. Under the CPO headings and rules, one has to pay for injurious effects, disturbance and reinvestment costs, which all add to the cost. One of the things we like to see is a formal underwriting process. For example, when we purchase lands compulsorily for a TII project, we know we will be reimbursed for the costs, whereas with a CPO for housing we have to make a claim and there is a level of uncertainty. One of our submissions is that we want underwriting of the CPO cost. Ultimately, if we cannot reach agreement, the CPO cost is determined by a property arbitrator. There is a risk associated with the price that the property arbitrator will ultimately set for land, and we need to be sure that we can recoup it.