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Publication - Guidance

Community Empowerment (Scotland) Act 2015: asset transfer guidance for authorities

Published: 23 Jan 2017
Part of:
Communities and third sector
ISBN:
9781786527493

A step-by-step guide for relevant authorities on the requirements for dealing with asset transfer requests.

96 page PDF

857.6kB

96 page PDF

857.6kB

Contents
Community Empowerment (Scotland) Act 2015: asset transfer guidance for authorities
10. Decision-making process

96 page PDF

857.6kB

10. Decision-making process

10.1. To provide a robust decision-making process it is essential to bring together officers with key responsibilities within the authority, including property, legal, finance, and those with a focus on community development or community engagement. It may also be helpful to include, or obtain advice from, relevant colleagues in relation to the benefits that an asset transfer may provide, such as economic development or environmental improvements.

10.2. Relevant authorities with a remit focused on particular issues may find it helpful to seek advice from others, for example through the community planning partnership. This may be general advice or in relation to specific benefits included in a community body's proposals. Some of the proposed benefits are likely to relate to a specialist area on which advice may be required. For example a relevant authority may seek advice on assessing outcomes for mental health or on environmental issues. Community planning partners may also be able to provide insight in relation to the local context. Some relevant authorities are planning to recruit a panel of external people with appropriate experience to advise on asset transfer requests, although the final decision must rest with the authority itself.

10.3. Each relevant authority will need to establish its own procedures for obtaining approval of decisions at an appropriate level, within the time limit required. Information on the process should be made available to the public, including who makes the decision and expected timings for each stage.

10.4. Dialogue between the relevant authority and the community transfer body should continue throughout the process. Relevant authorities can request clarification or more detail on any issues they feel are necessary for their decision. This will help to avoid situations where a request is refused on the basis of a lack of information which the community transfer body could have provided if they had been asked. Authorities should also take care that the type of information and level of detail expected is appropriate and proportionate to the individual request.

10.5. If the relevant authority considers at an early stage that they are likely to refuse the request in its current form, but could agree to an alternative proposal, you could discuss this with the community transfer body and suggest that they submit a new request. However, this must be entirely at the community transfer body's choice. They have a right to persist with the request they want to make and receive a formal decision, which is open to review or appeal.

Matters to be considered

10.6. Section 82 of the Act states that, "where an asset transfer request is made by a community transfer body to a relevant authority … the authority must decide whether to agree to or refuse the request". Under subsection (5), "the authority must agree to the request unless there are reasonable grounds for refusing it".

10.7. It is not possible to give detailed guidance on what may be reasonable grounds for refusal, as this must be determined in the circumstances of each individual case. However, they are likely to include cases where the benefits of the asset transfer request are judged to be less than the benefits of an alternative proposal, where agreeing to the request would restrict the relevant authority's ability to carry out its functions, or where another obligation on the relevant authority prevents or restricts its ability to agree to the request.

Benefits

10.8. In reaching its decision the authority must consider the reasons for the request and the information provided in the request and in support of the request, and compare the benefits of the community transfer body's proposals with the benefits that might arise from any alternative proposal. Alternative proposals may be another asset transfer request, or another proposal made by the authority, or by any other person. If the relevant authority does not consider the property to be surplus, continuing the existing use would be treated as an alternative proposal; if the property has been identified for disposal, disposal on the open market could be an alternative.

10.9. In assessing the benefits of the request the relevant authority must consider whether agreeing to it would be likely to:

  • promote or improve
  • economic development
  • regeneration
  • public health
  • social wellbeing
  • environmental wellbeing, or
  • reduce inequalities of outcome which result from socio-economic disadvantage

10.10. The authority must also make the decision in a manner which encourages equal opportunities and the observance of the equal opportunities requirements. While some of this may come under the heading of promoting or improving "social wellbeing", it provides a focus for considering activities which may benefit particularly disadvantaged groups, or promote inclusion and understanding between different groups.

10.11. When comparing the benefits of other proposals to the benefits of the asset transfer request, the non-financial benefits of the other proposals should be considered, where possible, as they are for the asset transfer request. The price offered for the transfer should also be considered alongside the non-financial benefits. In its simplest form, you should consider what outcomes could be achieved with any profit or savings that might be made, or what impact any financial loss might have, compared with the benefits offered by the community project or alternative proposals.

10.12. Further guidance on the assessment of benefits and price is provided in chapter 13.

Ability to deliver

10.13. Considering whether a proposal is likely to achieve the benefits set out is not only a matter of whether the planned activities would lead to the suggested outcomes. It also requires an assessment of whether the community transfer body is able to successfully deliver the project, and make it sustainable. This should cover both funding and the capacity and governance of the organisation. Some issues to be considered might be:

  • has the community transfer body identified all the relevant costs of the project or activities?
  • have they identified appropriate and realistic sources of funding - for example, will they be eligible for any suggested grants, are any fees for activities affordable for their target market, do they have a viable business plan for any proposed commercial activities?
  • where relevant, have they identified how the project will be funded in the longer term?
  • do members have appropriate skills, experience and qualifications to deliver the project, or does the body have a plan for engaging people who do?
  • does the community transfer body have suitable governance arrangements for the scale of the project?
  • where relevant, do they have succession plans in place for recruiting new Board members / Trustees in future?

10.14. Consideration of these issues should always be proportionate and appropriate to the scale and type of project involved. A proposal to buy and redevelop a building to provide new facilities for a range of users will be a complex and long-term project which requires clear planning for several years and a range of professional skills. A proposal to provide sport activities for young people in school grounds in the evening may not need long-term planning, but the community body will still have to consider whether people with appropriate skills are available and potential additional costs such as affiliation to governing bodies or Disclosure checks.

Relevant authority's functions

10.15. The relevant authority must consider how any benefits relate to other matters the authority considers relevant, including, in particular, the functions and purposes of the authority. In many cases, the proposed benefits of an asset transfer request will contribute to achieving the relevant authority's outcomes, or to national outcomes more generally. However, there may be cases in which agreeing to the request would have an unacceptable impact on the relevant authority's ability to deliver its functions. This could be a direct impact, for example because the community activities would physically interfere with the relevant authority carrying out its operations, or require them to put alternative arrangements in place that substantially increase the costs. There may also be cases where the community transfer body's proposals conflict with a policy of the relevant authority. And affordability may be a factor, if the cost of the transfer would affect the authority's budget to the extent that it reduced its ability to deliver its functions, even after taking account of the value of the proposed benefits.

10.16. Where there is a direct impact on the relevant authority's operations, in some cases it may be possible to work with the community transfer body to make adjustments to accommodate both parties' activities. If the community body understands the difficulties they may be able to suggest innovative solutions. Alternatively, the relevant authority may be able to suggest other land in the area that the community body might use.

Obligations and restrictions

10.17. Another matter to be considered is any obligations that may prevent, restrict or otherwise affect the authority's ability to agree to the request, whether these arise from legislation or otherwise. For example, legislation may require a relevant authority to obtain special permission to dispose of certain property, or title conditions or planning restrictions may say that it cannot be used for certain purposes. The Act does not over-ride or alter any such obligations. They should be explained to the community transfer body at the earliest possible stage, as they may influence their decision on what property may be suitable for their needs.

10.18. If an obligation imposes an absolute ban on the transfer of the rights sought by the community transfer body, or on the use they propose for the land, that would be reasonable grounds for refusal. However, in many cases there are mechanisms available for amending or removing the restrictions. The relevant authority should consider the benefits of the asset transfer request first. If it would be inclined to agree to the request, and, if appropriate, considers it would meet the requirements for removing the restrictions, the authority can then investigate the possibility of doing so. For example:

  • If a lease prohibits subletting, the relevant authority could potentially ask the landlord if they would consider amending it in favour of the community transfer body. (This only applies if the landlord is not a relevant authority, or a company wholly owned by a relevant authority; otherwise the restriction in the lease is disapplied under the terms of section 92 - see paragraph 10.24.)
  • If permission is required from the Scottish Ministers (or any other person) to transfer the rights requested, if the relevant authority considers the request should be agreed, they should prepare a case to seek permission for the transfer.
  • In some cases an application to the courts may be required, for example if an asset transfer request relates to inalienable common good land. A proposal with strong support from the community is likely to strengthen the authority's case for disposing of the property.

10.19. In each of these cases, it may take some time to deal with the potential restriction on disposal. It may be necessary either for the relevant authority and the community transfer body to agree to extend the time allowed for issuing a decision notice, or for the agreement to the request to be conditional on the restriction being removed.

"Other matters" and community support

10.20. The final paragraph of section 82(3) requires the relevant authority to consider "such other matters (whether or not included in or arising out of the request) as the authority considers relevant". One aspect that we would recommend relevant authorities consider under this heading is community support for the proposals and any potential impact on other community groups.

10.21. The relative importance of wider community support will depend on the proposed project. It is particularly important if the request is for ownership or development of a key site, or will change the delivery of services, and which therefore affects people in their everyday lives. It may be less important for a lease of office space or an unobtrusive renewable energy scheme, for example, although any asset transfer could raise questions of value for money and equal treatment of different groups.

10.22. There are often differences of opinion within communities, and you should not expect unanimous support for a proposal. However, one of the intended benefits of community ownership and community-led activity is to increase community cohesion and resilience. A scheme that attracts substantial opposition and causes division in the community may not have a net benefit. It could also result in fewer people becoming involved or using the services.

10.23. If the request is from a body representing a community of interest, they should be encouraged to show how they have engaged with the geographic community in the area where the asset is located. A community of interest may be a subset of the local community, such as an equality group or sports club, or it may be drawn from a regional, national or even international base. In either case, the views of local residents who are not part of that community of interest should be considered. Equally, a proposal from a geographic community may reference support from communities of interest who may benefit.

Lease restrictions

10.24. If the request is for land which is leased to the relevant authority by another relevant authority, in certain circumstances restrictions in the lease do not apply, as set out in section 92 of the Act. The circumstances are that:

  • the land is leased by one relevant authority, or a company wholly owned by a relevant authority, to another relevant authority
  • the request is for lease or a right of occupancy of the land, and
  • no other person is entitled to occupy the land.

10.25. In this case, any restrictions in the lease which restrict the ability of the relevant authority to sub-let or share occupancy of the land, or restrict how the land may be used, do not prevent the relevant authority agreeing to lease the land to the community transfer body or allow them to occupy the land. This does not affect any restrictions on the power of the relevant authority to assign or transfer rights and liabilities under the lease, and the relevant authority continues to be subject to any obligations under the lease. For example, if the lease said sub-letting was not allowed, the relevant authority could agree to an asset transfer request for a sub-let, but would still be responsible to the landlord for any maintenance requirements included in the lease between them.


Contact

Email: Jean Waddie