Policy paper

Heathrow north-west runway community compensation explanatory briefing

Published 21 June 2018

This was published under the 2016 to 2019 May Conservative government

© Crown copyright 2018

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This publication is available at https://www.gov.uk/government/publications/heathrow-north-west-runway-and-community-compensation/heathrow-north-west-runway-community-compensation-explanatory-briefing

The Airports National Policy Statement

The proposed Airports National Policy Statement (NPS) sets out a package of compensation for local communities which could be worth up to £2.6 billion, or up to ten times the value associated with the previous third runway proposal. The NPS says that compensation must be in place, at least to the level of:

  • 125% of market value, plus Stamp Duty and reasonable moving costs, for all owner-occupied homes within the compulsory acquisition zone and Heathrow Airport’s own voluntary purchase zone. This offer is considerably more generous than required in statute (estimated total value: £550 million);
  • full noise insulation for residential property most impacted by expansion and a contribution of up to £3,000 towards noise insulation for residential property further away from the airport (estimated total value: £715 million); and
  • insulation and ventilation for schools impacted by expansion (estimated total value: £40 million)

The NPS makes clear that in addition to the measures above a Community Compensation Fund (CCF) worth up to £50 million each year must be established and could fund local facilities and mitigate environmental impacts. The NPS says the government will consider separately how local authorities could benefit through a retention scheme from the estimated £30 million per year increase in Heathrow Airport’s business rates.

An applicant is required to work with the recently established independent Heathrow Community Engagement Board and consult publicly on the details of each component of the community compensation package in the NPS. This could include the terms of the property purchase and noise insulation measures and the details of the CCF, including the size of the fund and what it should be spent on.

Legally binding and enforceable

The compensation package will be legally binding and this can be achieved in three different ways. Much of the package can be imposed as requirements in the development consent order (DCO). In some circumstances a section 106 agreement could be used where, for instance, a financial contribution to a local planning authority is needed. Or a developer could enter into a private contract. Heathrow Airport Ltd recently consulted on a proposal to bind itself to its property purchase pledges through a contract.

The Planning Act 2008 grants the relevant planning authority significant powers to investigate a breach of any requirements, to apply for an injunction or to prosecute under criminal law. In the Crown Court the fine is unlimited. A section 106 agreement is enforceable as a contract, meaning injunctions may be obtained to compel performance and damages are available if it is breached.

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