Benefits and risks of a Community Asset Transfer
A Community Asset Transfer can have many benefits, which are usually dependent on how the asset can be developed, used, and enhanced by the local community. However, there needs to be careful consideration of whether the land and/or buildings acquired will be an asset or a liability.
Asset transfers can also present a risk to local authorities, which are helpful to understand if your organisation wants to present a case for taking over an asset.
-
Benefits of a Community Asset Transfer to a community organisation
This is a list of positives that come from a Community Asset Transfer to a community organisation.
Read more- provides a secure and long-term home to deliver activities
- can help to attract more participants and volunteers
- provides the opportunity to generate income and become financially sustainable
- the asset can become a focal point for the local community, where other services are offered
- can encourage organisations to change their legal structure and become incorporated, reducing the risk to the individuals running the organisation
- creates opportunities to engage with local communities and create partnerships
- involves local people in the design, development and running of the asset to help encourage their buy-in and support
- keeps money within the local economy through more use of the asset
-
Benefits of a Community Asset Transfer to a local authority
There are also benefits from the transfer of a community asset to a local authority.
Read more- can contribute towards local policy objectives including health and wellbeing, volunteering, education and employment
- can result in the development of a local asset that was previously unused, underutilised or unfit for purpose
- community organisations often have access to funding streams, which local authorities aren’t eligible for
- it reduces the cost to local authorities of managing and running the asset
- creates stronger relationships and builds trust with the local community.
-
Risks of a Community Asset Transfer to a community organisation
You should always consider the negatives from transfering community assets to a community organisation.
Read more- land and buildings only become assets if the organisation taking them on can make a small surplus, which is then reinvested into the on-going running of the asset, or as a minimum break even with allowances for maintenance and repairs. Otherwise, land and buildings could become a liability and may prove costly
- it’s important for community organisations to understand if the asset needs any significant refurbishment or redevelopment and, if so, how these costs will be covered. Organisations are encouraged to check if there’s any restrictions on the asset which may impact upon their ability to carry out certain works or deliver certain activities
- to help make sure a Community Asset Transfer is successful in the long-term, a detailed viability assessment should be carried out before agreeing to the asset transfer. A viability assessment will help determine if the asset is likely to be financially sustainable
- external factors such as pressure from the local community or competing organisations shouldn’t influence the decisions to agree an asset transfer. The decision to commit to an asset transfer should only be made if the organisation taking it on is confident of the asset’s potential to be financially viable, manageable, and meet their needs.
-
Risk of a Community Asset Transfer to a local authority
If a community asset is transfered into a local authority, there will also be a series of considerations that'll need to be taken into account.
Read more- before agreeing to an asset transfer a local authority should be confident that the transfer is in the best interest of both the local community and the organisation taking it on. If there’s more than one organisation who expresses an interest in the asset, the local authority will need to decide who’s best placed to take it on.
- whilst uncommon, there’s a risk that once the asset is transferred it will be badly managed or not looked after. Local authorities should be aware of this and are likely to want to see evidence of planned maintenance and good financial planning. This shouldn’t be a reason for local authorities to not consider Community Asset Transfers, as the risk of not doing anything with an underutilised or failing asset is often greater.
- to support local authorities mitigate against the risks, The Ministry for Housing, Communities and Local Government have produced a guide on managing the risks associated to asset transfers. The guide is based on practical advice and experiences of both local authorities and community groups.