Revocation and modification orders and the compensation

A local planning authority can take back a planning permission it has granted. Section 97 of the Town and Country Planning Act 1990 lets it revoke or modify a permission where it appears expedient to do so, having regard to the development plan and any other material considerations. The reason you almost never see it happen is section 107, which makes the authority pay compensation for the abortive expenditure and the loss that follows.

Revocation of planning permission is therefore a real risk rather than a common one. For a developer holding a permission that the council has since decided it dislikes, the practical questions are when the power can still be used, what the process gives you, and what the authority would have to pay.

The power to revoke or modify a permission

Section 97 gives the authority a discretion, not a duty, and it is exercised by making an order. The order can revoke the permission entirely or modify it to such extent as the authority considers expedient, which in practice means altering conditions or cutting back what is permitted.

The statutory test is loose. Expediency, judged against the development plan and other material considerations, covers a change in policy, new information about the site, or a decision the authority now regards as wrong. There is no requirement that anything has gone wrong with the application or the applicant.

Two related powers sit alongside it. Section 100 lets the Secretary of State make an order after consulting the authority. Section 102 allows a discontinuance order aimed at an existing use rather than a permission, which is dealt with below.

None of these is an enforcement power. Enforcement deals with development carried out without permission or in breach of condition. Revocation deals with permission that was properly granted and is still valid.

The stage at which it can be used

Timing is the developer's main protection, and it is set out in section 97(3).

Where the permission is for building or other operations, the power cannot be exercised after those operations have been completed. Where the permission is for a change of use, it cannot be exercised after the change has taken place.

Two consequences follow, and they explain most of the tactical behaviour in this area.

The first is that partial implementation does not stop an order in respect of what has not yet been built. Section 97(3) protects the operations already carried out, not the remainder of the scheme, so a site with foundations in the ground and nothing above them is still exposed.

The second is that a lawful material start changes the position materially. Where a developer becomes aware that an order is being considered, implementing the permission properly, with the pre-commencement conditions discharged and the works amounting to a material operation in fact, is the most effective response available. Keep the evidence carefully, in the way described in building a compliance file after permission is granted, because the date and nature of the works will be contested if an order follows.

Confirmation, objections and the right to be heard

An order under section 97 does not take effect when it is made. Section 98 requires confirmation by the Secretary of State, and until that happens the permission stands and can be implemented.

The procedure gives affected parties a hearing. The authority serves notice of the order on the owner, the occupier and any other person who in its opinion will be affected, and those people may require an opportunity of appearing before, and being heard by, a person appointed by the Secretary of State. That is an inquiry-style process, and it is where the substance of the case is argued.

Section 99 provides a shorter route where nobody objects. The authority advertises the unopposed order, serves notice, and if no objection is received within the period stated in the notice, it may confirm the order itself without reference to the Secretary of State. That period is short, and missing it forfeits the hearing. The publicity rules that apply are the same family of requirements covered in publicity for major development.

So the first thing to check on receiving notice of an order is which route the authority is using, and what the objection deadline is.

How compensation is assessed

Section 107 creates the liability. Where permission is revoked or modified, the authority pays compensation to any person with an interest in the land who has incurred expenditure or suffered loss.

The heads of claim are:

• Expenditure on work carried out which is rendered abortive by the revocation or modification, including the preparation of plans and other matters preparatory to the work.
• Any other loss or damage directly attributable to the revocation or modification, which in practice is usually the depreciation in the value of the interest in the land.

Claims are made to the local planning authority within the period prescribed by the Town and Country Planning General Regulations 1992, so the deadline needs to be identified from the regulations as they currently stand rather than assumed. Disputes about the amount are determined by the Upper Tribunal (Lands Chamber).

What is compensable is narrower than developers expect. Abortive expenditure is evidenced by invoices and is rarely argued about. The larger head, the reduction in land value, is a valuation exercise comparing the value of the interest with the permission against its value without, and it is where the money and the argument are.

Keep the records that support a claim from the outset: professional fees, survey costs, ground investigation, section 106 negotiation costs, finance costs and the appraisal that underpinned the land purchase. A contemporaneous appraisal is worth more than one reconstructed afterwards.

Why authorities use the power so rarely

The liability sits with the authority, and it is unbudgeted. A revocation on a consented residential site can produce a claim well beyond anything a planning department could absorb, which is why proposals to revoke are usually stopped by a finance officer rather than a planning one.

Three practical consequences.

1. Authorities prefer to negotiate. Where a council wants a scheme changed, it will usually seek a section 73 application or a revised scheme rather than an order, because both are free to it.
2. Where an order is made, it is often because the compensation exposure is small, for example on a permission that has not been acted on and where the land value change is limited.
3. The Secretary of State's confirmation requirement adds a further filter, and orders that look disproportionate do not get confirmed.

That is not a reason to be complacent. A developer holding an unimplemented permission on a site the council now wants for something else should treat the possibility seriously, particularly where a new local plan allocates the land differently.

Discontinuance orders for an existing use

Section 102 is the parallel power for uses and buildings that are already there. An order can require a use to be discontinued, impose conditions on its continuance, or require buildings or works to be altered or removed.

Like a revocation order, it needs confirmation by the Secretary of State under section 103, with the same right for affected parties to be heard. Compensation follows under section 115, covering depreciation in the value of the interest, disturbance, and the expense of carrying out works required by the order.

Discontinuance is aimed at long-standing uses that have become unacceptable, typically a noisy or polluting operation in what has become a residential area. It is rare for the same reason: it is expensive.

What to do on the day the notice arrives

Work through this sequence.

1. Read the order to see whether it revokes or modifies, and exactly what it would leave in place.
2. Identify the procedural route, section 98 confirmation or section 99 unopposed, and diarise the objection deadline that day.
3. Object in writing within the period, and require the opportunity to be heard. Doing so removes the unopposed route and takes the matter to the Secretary of State.
4. Establish the implementation position. Have the pre-commencement conditions been discharged, has a material operation been carried out, and can it be evidenced with dated photographs, site records and invoices?
5. Assemble the compensation evidence now, whether or not you expect the order to be confirmed.
6. Check the collateral consequences, including the effect on any Community Infrastructure Levy position, which is dealt with in CIL liability notices, assumption and the surcharges.
7. Take advice on judicial review where the order appears to have been made for an improper purpose or without regard to a material consideration.

The written case against confirmation is a planning case rather than a legal one. It sets out why the permission remains acceptable against the current development plan, what has and has not changed since it was granted, and what the authority's own evidence base says. PlanScope can draft that Planning Statement for review by a qualified planner before it goes to the Inspectorate.

This is general guidance, not legal advice; check the position with your local planning authority or a qualified professional before relying on it. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.