New Towns Act 1946

Overview

The New Towns Act 1946 (9 & 10 Geo. 6 c. 68) is a UK statute that empowered government-appointed development corporations to designate and build entirely new towns to rehouse people from bombed-out and overcrowded housing after the Second World War.[1][3] Stevenage, designated on 11 November 1946, was the first; a first wave of ten towns followed by 1950 (including Crawley, Harlow, Hemel Hempstead, and Basildon), with later waves under successor legislation eventually producing 32 new towns across the UK, housing an estimated 2.8 million people.[1][2]

The act's financing model is what makes it a landmark case for land value capture: a development corporation designated an area of countryside as a new town, bought the land from its owners at agricultural-use prices, borrowed to build housing, commercial premises, and infrastructure (sewers, schools, roads), and then sold or leased the commercial premises and part of the housing at developed prices — using the resulting uplift, created by the town's own designation and construction rather than by the original owners, to pay off the development debt.[1] This restricted-compensation model applied most cleanly to the first wave of towns designated between 1946 and 1950, before the Town and Country Planning Act 1959 (7 & 8 Eliz. 2 c. 53) restored open-market value as the basis for compensation on the compulsory acquisition of land — its stated main purpose being "to put compensation for compulsory acquisition of land on a market value basis," ending the post-war "two-price" system.[4] The model strained financially in the 1970s as inflation raised borrowing costs, complicating its fiscal record, and the development corporations were eventually dissolved, with assets split between local authorities and the Commission for New Towns.[1]

See Also

• Land Value Capture — the general mechanism this program is a landmark case of
• Town and Country Planning Act 1947 — the companion planning statute that nationalized development rights the same era
• 1909 People's Budget — an earlier, contested UK attempt to tax land value directly rather than capture it via public development corporations
• Land Value Tax — the standing-policy analogue to this one-off capture mechanism

Sources

1. "New towns in the United Kingdom," Wikipedia — used for the act's citation (9 & 10 Geo. 6 c. 68), the development-corporation structure, the first-wave designation dates (Stevenage 11 November 1946, and nine further towns through 1950), the total of 32 new towns and 2.8 million residents, and the "Finance" section's description of land bought at agricultural prices and sold at developed prices to repay infrastructure debt, including its 1970s difficulties and the corporations' eventual dissolution. en.wikipedia.org/wiki/New_towns_in_the_United_Kingdom
2. UK Parliament, Housing, Communities and Local Government Committee, "Land Value Capture" report — used to corroborate the 32-town, 2.8-million-resident figure and the general land-value-capture framing of the new towns programme. publications.parliament.uk
3. legislation.gov.uk, "New Towns Act 1946" (full text) — used to confirm the act's formal citation and enactment. legislation.gov.uk/ukpga/Geo6/9-10/68/enacted — verified verbatim this pass: 1946 CHAPTER 68, long title "An Act to provide for the creation of new towns by means of development corporations, and for purposes connected therewith," cited as "the New Towns Act, 1946." The Act establishes development corporations as bodies corporate empowered to acquire, hold, and manage land (s. 2); compensation on compulsory purchase is determined by applying the provisions of the Town and Country Planning Act 1944 (the wartime "1939 values" restricted-compensation regime), corroborating the page's agricultural-price acquisition model for the first-wave towns.
4. Town and Country Planning Act 1959 (7 & 8 Eliz. 2 c. 53), Part I "Compensation for Compulsory Acquisition of Land" — used for the year and statute that restored market-value compensation, replacing the restricted post-war regime. The Bill's stated main purpose, per the Second Reading debate, was "to put compensation for compulsory acquisition of land on a market value basis" and to end the "two-price system." legislation.gov.uk/ukpga/Eliz2/7-8/53/contents — quotation from HL Deb 14 April 1959 vol 215 cc578-636, api.parliament.uk historic-hansard.