What is a Community Asset Transfer?

What is a Community Asset Transfer?

• Who can take on a Community Asset Transfer?

  Any community organisation can take on a Community Asset Transfer from their local authority.

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  There’s no obligation for local authorities to agree a Community Asset Transfer, but many do as they recognise the benefits, such as increased investment and use of an asset, which help to secure its long-term future.

  Whilst any community organisation can take on a Community Asset Transfer, it’s important to ensure that their workforce, often voluntary, has the capacity, enthusiasm and skills to manage, maintain and perhaps develop an asset which may be unused, need repair or require investment to improve it.

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• What powers do local authorities have to transfer their assets?

  All local authorities have the power to sell, transfer the ownership, or lease the land or buildings they own. Typically, local authorities try to achieve the highest possible price or rate when transferring the ownership or management of their assets.

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  However, government legislation known as General Disposal Consent, gives local authorities the ability to sell, transfer the ownership, or lease their assets at a lower price to community organisations, as long as this benefits their local community and improves the physical, social, economic and environmental wellbeing of local people.

  Usually, Community Asset Transfers comply with this legislation, meaning assets can be offered to community organisations at a lower, more affordable price.

  To secure an asset under General Disposal Consent, a number of arrangements can be put in place between a local authority and a community organisation. These include:

  • a long-term lease below market rental value
  • the sale of the freehold below market purchasing value
  • through a peppercorn rent.

  A peppercorn rent refers to a minimum payment, of usually £1, from the community organisation to the local authority.

  This is simply to ensure there’s a contract in place and a documented exchange between the two organisations. In the case of a Community Asset Transfer, the local authority would hand over access and usage of their asset, and the community organisation would pay the peppercorn rent.

  Local authorities aren’t required to put a Community Asset out to tender or to the market but are required to follow their normal procedures when selling, transferring ownership or leasing an asset and will need a robust case to support why the asset transfer would be beneficial.

  This may mean that community organisations have to submit a ‘bid’ for the asset which would likely include a business plan and management plan. A management place outlines how you will manage and operate any asset once you’ve taken them on.

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• How do local authorities justify a Community Asset Transfer?

  There are several considerations for local authorities, when justifying a Community Asset Transfer.

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  Some of these factors include:

  • identifying how an asset transfer will benefit local people.
  • demonstrating how the asset transfer can help to deliver local strategies and policies (including a Community Asset Transfer Policy, Playing Pitch or Sports Facilities Strategies)
  • using a qualified valuer to determine any below market rental or purchase value
  • ensuring the organisation receiving the asset is community owned and not-for profit, so it’s not individuals who benefit
  • reviewing business plans and management plans to ensure the financial viability of the community organisation.
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