Community Asset Transfers
What is a Community Asset Transfer?
A Community Asset Transfer (CAT) is a phrase used to describe the process of transferring
full or leasehold ownership of physical assets (usually land and buildings) from
the public sector to a community-based organisation.
The Government is currently encouraging local authorities to review their property
assets for opportunities to transfer assets to community organisations. While local
authorities are under a duty to obtain best value on disposal, they do have the
power to transfer land and buildings at less than market value if a wider community
benefit can be achieved through the transfer.
There are a number of different methods of asset transfer including by licence,
rental agreement, lease, full repairing lease and transfer of freehold. The method
chosen will depend on a variety of factors including the capacity of the recipient
organisation and what the organisation wishes to do with the asset. One example
of a CAT is the transfer of council housing to a Housing Association.
The purposes of a CAT are diverse; examples include the conservation of historic
buildings, regeneration of an area and establishing a base for community service
delivery. A CAT may help a community group to become self-sustaining, by the opportunity
to stop paying rent, or to begin to generate income (e.g. from lettings) or even
raise finance (by using the asset transferred as security for a loan).
From the point of view of a community organisation there are risks involved, such
as ensuring the asset is self-sustaining, a lack of technical knowledge or management
skills, and the need for refurbishment to
make the asset fit for purpose.
Current Government policy on CATs
Current Government policy supports the principle of making a CAT where a good case
for this is demonstrated. Some of the key recent developments are highlighted below:
Background - The Quirk review
The Quirk Review, Making Assets Work: The Quirk Review
of Community Management and Ownership of Public Assets, took place in 2007
and is credited with being the start of current Government policy concerning CATs.
The review identified the benefits of local groups managing and owning assets, both
as a method of empowering communities and as an effective way of supporting local
government in achieving its aims at grassroots level.
The Government supported all of the recommendations outlined in the Quirk Review.
In 2007, it called upon the Development Trusts Association (DTA) and its partners
Community Matters, the Local Government Association (LGA) and Action with Communities
in Rural England (ACRE) to establish and deliver the “Advancing Assets for Communities
demonstration programme”. Thereafter in 2008, the White Paper “Communities in Control:
Real People, Real Power”, announced the Government’s intention to establish a dedicated
Asset Transfer Unit (ATU).
The Asset Transfer Unit
The ATU (a unit within the Department for Communities and Local Government)
was launched by the Government in January 2009 to provide expert advice and guidance
to support the transfer of under-used land and buildings from the public sector
to community ownership and management.
The ATU aims to promote and support CATs, both at a strategic level and in practice,
it aims to help projects become viable realities - increasing the rate at which
assets are transferred into community management and improving the quality of transfer
arrangements to safeguard the prospects of recipient communities for the future.
The ATU offers a number of services including briefings, seminars, advice, guidance,
training and best practice materials.
ATU Survey
An independent survey has been conducted recently on behalf of the ATU to investigate
the progress that has been made on the asset transfer agenda. The survey found that
there are 350 asset transfer projects currently underway from a sample of 119 local
authorities. From this sample the ATU estimates there may be close to 1,000 transfers
of local authority owned assets to third sector organisations in progress across
England.
The survey suggests that local authorities have tended to transfer assets predominantly
to charities as well as social enterprises including community interest companies.
Community centres are the most popular asset to be transferred. Parks , playing
fields, offices and schools are also popular choices. The most common reason cited
for a failed asset transfer was the inability of the recipient organisation to raise
the necessary funding.
Advancing Assets for Communities demonstration programme
The
ATU manages the Advancing Assets for Communities demonstration programme. The programme
offers expert support and advice to local authorities and their third sector partners
seeking to develop joint plans for community asset transfer in keeping with the
recommendations of the Quirk Review.
The fourth round of the programme has recently been
launched. A call for Expressions of Interest to join was issued on 10th November
2009 and the deadline for submissions is 22nd January 2010. The fourth round of
the programme aims to enable 30+ local authorities and their third sector partners
to benefit from the in-depth support on offer during 2010-11. Local authorities
who have not already participated in the programme are invited to apply now.
A recent report from the ATU, People, Places and Partnerships, shows that of the
50 local authority and third sector partnerships that received support from the
Advancing Assets Programme during 2007-2009, over a third are expected to complete
successful transfers before the end of March 2010.
One example is the Highfields Community Association (HCA) which serves the Highfields
and St Peter’s inner city area of Leicester working with culturally diverse communities
to raise aspirations and achievement levels. A transfer of the Community Centre
to HCA by way of a full repairing leasing agreement for a period of 25 years at
a peppercorn rent is currently being negotiated with the local authority.
Conclusion
The Government continues to support CATs where these will produce ongoing benefit
to the local community. In a press release dated 10 November 2009 the ATU quotes
Barbara Follett, Parliamentary Under Secretary of State at the Department for Communities
and Local Government as saying “Transferring assets to community management or ownership
in a thoughtful and supported way can bring real added social value, particularly
important in these straitened times.”
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For More Information Contact:
Peter Hill
TPP Law Limited
53 Great Suffolk Street
London SE1 ODB
t 020 7620 0888
f 020 7620 0778
e info@tpplaw.co.uk
Email: Peter
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