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Asset Transfer

In recent years there has been a lot of discussion surrounding Community Asset Transfer: the transfer of public assets such as community centres, libraries, green spaces etc. to community management and ownership. Asset transfer can mean many different things: from the transfer of the freehold, to granting leases of varying lengths.

If your organisation is interested in managing a community asset, you will first need to check whether your local Council has an asset transfer policy (this could be called a VCS Premises policy, Community Asset Transfer policy, etc). There should be details on their website, or speak to your local Council for Voluntary Service, who may be able to point you in the right direction. If you are based in London, Lorraine Hart’s recent report ‘Premises for the third sector in London’ may prove useful. 

Background

In 2007, the Quirk Review Report: Making Assets Work explored the issues and concluded that: “the benefits of community management and ownership of public assets can outweigh the risks and often the opportunity costs in appropriate circumstances”. Since the report was published there has been growing interest from both the public sector and community organisations in asset transfer. The way that different local authorities have dealt with asset transfer has varied widely: some already have policies in place, some do not as yet, some will consider transfer of freehold, others will only look at short term leases.

The Localism Act 2011

Following on from this, the Localism Act came into force in late 2011, with many of its measures coming into effect April 2012. The Act is designed to decentralise power from central government to the public, communities and local Councils.

The Localism Act contains some relevant provisions for local not for profit organisations:

The Community Right to Challenge gives local voluntary and community organisations the right to express an interest in taking over the running of a local authority-run service. The local authority must consider and respond to this challenge, and if it accepts it run a procurement exercise for the service in which the challenging organisation can bid. Taking over a service may well involve taking over the building that goes with it: for example, running a local library or community centre.

The Community Right to Bid allows voluntary and community organisations to nominate a community asset to be included on a ‘list of assets of community value’ which the local authority is required to maintain. When listed assets come up for sale or disposal the Act allows local community organisations a six week window in which to submit an expression of interest. If one is made, the organisation then has a period of six months to put together a bid and raise funds to bid for the asset when it comes onto the market. The owner of the property has a duty to consider all bids, but can accept any bid they choose: they do not have to accept the community organisation’s bid. 

Other provisions

Local authorities are able to transfer assets to community organisations at ‘less than best consideration’, i.e. below market value, under the General Disposal Consent (England) 2003, where the asset to be disposed of has an ‘undervalue’ of less than £2million.

The legislation requires that the transfer should help promote or improve the economic, social or environmental well-being of an area. For further information, see this link.


For more information on Community Asset Transfer, see:

The Asset Transfer Unit

Communities and Local Government Plain English Guide to the Localism Act