The War Damage Commission was set up following the War Damage Act 1941. Under Treasury direction, the Commission received notifications and to made compensation payments in respect of damage by enemy action to land and buildings in the United Kingdom. Prior to the setting up of the Commission, the Valuation Office of the Board of Inland Revenue was responsible for the collection of war damage claims and an advisory committee chaired by Andrewes Uthwatt (later Lord Uthwatt) had reported to the Chancellor of the Exchequer in November 1939 and March 1940 on the principles for assessing damage. The 1941 and subsequent amending Acts of 1942 and 1943 were consolidated in the War Damage Act 1943 and supplemented by the War Damage (Public Utility Undertakings etc.) Act 1949. The War Damage Acts 1941 to 1943 incorporated to a large extent the recommendations of the advisory committee and provided that payment should be either the cost incurred in the repair of the war damage or, if this was uneconomic, a value payment on the basis of prices ruling at 31 March 1939. Following the 1941 Act, the Ministry of Health ceased to issue loans to local authorities under the Housing (Emergency Powers) Act 1939 for emergency war damage repairs, the cost of which was thereafter claimed direct from the Commission although in close liaison with the Ministry's regional offices. Cost of works payments could be made as soon as incurred but value payments were to be made at a date to be fixed by the Treasury which, for most claimants, was not until November 1947 although at an enhanced rate, the 1939 figure no longer being thought adequate.
In its early years the Commission exercised certain planning controls in specified war-damaged areas but in 1945 these functions passed to local planning authorities under the direction of the Ministry of Town and Country Planning. In 1947 the government decided that in order to make minimum demands on staff resources and accommodation the functions of the Central Land Board should be entrusted to the Commission.
The Central Land Board was established by the Town and Country Planning Act 1947, following the recommendations of the Uthwatt Expert Committee on Compensation and Betterment. This Committee had been appointed in 1941 by the Minister of Works and Buildings to analyse the problems of the payment of compensation and recovery of betterment in respect of public control of the use of land. The Central Land Board was under the direction of the Minister of Town and Country Planning and, under a separate Scottish Act, of the Secretary of State for Scotland. Its duties were to assess and levy development charges on new developments of land and to administer payments out of central funds to compensate the owners of land for loss of development value occasioned by the planning restrictions imposed by the Act. The Board was also empowered, with ministerial approval, to acquire land by agreement or compulsory purchase and to dispose of it for development.
When planning permission was granted for a development, a development charge was payable on the enhanced value of the land. In cases of default the Board could issue an order for payment, together with a penalty, enforceable as a land charge subject to appeal to one of the county courts or the High Court. Compensation for loss of land value caused by the Act was limited to owners of land whose value as affected by the Act was substantially less than its unrestricted value, and the total amount of compensation payable was fixed at a limit of £300 million, to be distributed in accordance with a scheme drawn up by the Treasury and approved by Parliament. From 1950 a register of land acquired and disposed of by the Board was kept, recording purchase and selling prices and stating whether it was acquired compulsorily or by agreement. The performance of the Board's functions was entrusted to the War Damage Commission as an economy measure. The Valuation Office of the Board of Inland Revenue acted for it on all matters of land valuation. In 1949 the new Lands Tribunal was empowered to decide disputes concerning the determination of the development value of land.
In 1951 the Board passed under the direction of the Ministry of Local Government and Planning and then of the Ministry of Housing and Local Government. The Town and Country Planning Act 1953 abolished development charges and the Board's powers of compulsory purchase, and directed that no compensation payments were to be made. However, this was modified in 1954, when a further Act allowed payments in certain cases where a claim under the Act of 1947 had been approved. The Board was dissolved in March 1959 and its residual functions transferred to the Minister of Housing and Local Government.
In 1955, the War Damage Commission had taken over the work of assessing and paying claims in respect of war damage to chattels formerly undertaken by the Board of Trade under Part II of the War Damage Act 1943. The Commission acted in this matter as agents, with the Board retaining responsibility for general policy. The War Damage Acts also made provision for certain contributions by property owners towards the expense of payments for war damage and responsibility for the collection of these was entrusted to the Board of Inland Revenue. At the request of the responsible government department the Commission's experience was, from time to time, placed at the disposal of certain other bodies at home and overseas concerned with compensation problems arising from the war and civil disasters. Under Part II of the War Damage Act, the Board of Trade was responsible for administering the compensation schemes for loans and damages to business as a result of enemy action. To carry out its work the Commission had a number of regional offices and associated technical centres under the general direction of its London Headquarters.
The War Damage Commission was dissolved under the War Damage Act 1964 which came into operation on 1 October 1964. Its residual work taken over by a War Damage Office of the Board of Inland Revenue except for functions concerning public highways which passed to the Ministry of Transport in England and Wales and to the Secretary of State for Scotland. The Board also took over the remaining responsibilities for the chattels scheme administered by the Board of Trade.
After 1 October 1974 there was no further right to any payment in respect of war damage although the Board had discretion to make a payment if delay had not been through the default of the claimant e.g. if damage was caused by a previously unexploded bomb. With the winding-up of the war damage scheme, the War Damage Office ceased to exist as a separate branch.