A Comprehensive Guide to Community Asset Transfer

A Comprehensive Guide to Community Asset Transfer

This briefing examines community asset transfer. It provides a short introduction to the topic and looks at community asset transfer within Scotland, England, Northern Ireland, United States and Australia. It also provides a case study(ies) demonstrating community asset transfer in each of these countries. Finally, it provides a brief commentary on community asset transfer in New Zealand and offers a local case study example.

What is a Community Asset Transfer?

‘Community asset transfer’ is the transfer of management and/ or ownership of assets (usually land or buildings), from a statutory body (such as a local council or government agency) to a community organisation (such as a social enterprise or a NGO/ charity) at less than its full market value – in order to further local social, economic and or environmental objectives (Local Government Association UK, 2012).

It’s a ‘tried and tested’ approach in the United Kingdom, (where more than 1,000 assets have been transferred) and research has found that “asset transfer empowers citizens and communities by enabling them to positively influence the development of resources and services in their area”.[1]

Community asset transfer requires a high trust partnership between the statutory body and the community to work successfully and, critically, the NGO or charity must have the capacity and capability to maintain the asset.

What are the Benefits?

Community asset transfer can be an effective way of:

  • Providing communities with security and a means of generating income (e.g. through social enterprise and using the asset to get investment).
  • Improving flexibility and responsiveness (e.g. shared services in community centres) and therefore access to services and positive outcomes for communities.
  • Securing long-term savings for councils.

Examples of Community Asset Transfers

Community asset transfer in Scotland

The Development Trusts Association (DTA) Scotland is the national body for development trusts in Scotland. DTA Scotland assists interested communities in exploring the benefits and relevance of the development trust approach, providing resources, training and support to communities wishing to establish a development trust.

The Community Ownership Support Service COSS, delivered by the DTA Scotland, is funded by the Scottish Government to support the transfer of publicly held assets into community ownership.

The website has a very good ‘policy and research’ page that can be found at: http://www.dtascommunityownership.org.uk/about-coss

 

Current situation

At present, a number of Scottish local authorities have established asset transfer schemes to allow communities to take control of assets within their area. However, there is not a uniform approach across Scotland, and the process is often unclear, hence the creation of COSS.

 

Incoming legislation

In June 2015, the Scottish Government passed the Community Empowerment (Scotland) Bill. Once enacted it will give local authorities and public bodies a statutory duty to weigh up the benefits of transferring their land and buildings to communities by:

–   Giving the initiative to communities to identify property they are interested in, and placing a duty on public authorities to agree to the request unless they can show reasonable grounds for refusal.

–   Noting the intention is not for the focus of asset transfer requests to necessarily be on buildings and land considered surplus to the public sector’s requirements, but on “what the community seeks to achieve and what property would help them achieve that.”

To support the implementation of the Bill, COSS will see its funding increased to £400K over the next year. COSS has already supported nearly 50 asset transfers across Scotland.

 

Scale and value of community asset transfers in Scotland

Generally it is difficult to obtain definitive information on the scale and value of disposals/ transfers to provide an accurate Scottish national picture and trends. However, in 2012 COSS commissioned a report called Community Ownership in Scotland: A Baseline Study. The study identified 22 community asset transfers between 1999 and 2012 at below valuation or market price.

The majority of these asset transfers were from local authorities, five transfers were from the private sector and four were from third sector organisations (including the Church of Scotland). The research was only concerned with the transfer of ownership title; it did not cover assets transferred through a lease or management arrangement.

The study also found that taking ‘community assets’ and housing in community ownership together, there are an estimated 75,891 assets owned by a total of 2,718 community-controlled organisations in Scotland. These assets have an estimated combined value of over £1.45 billion. A summary of the scale of community-owned assets, by category, is shown in the table below.

 

Table 1: Scale of assets in community ownership in Scotland

Category No. of assets No. of bodies holding title* Estimated value Percentage of total estimated value
Housing 73,151 84 £0.8 billion 55.2%
Community / village halls 2400 2400 £0.49 billion 33.8%
Other ‘community assets’ 340 287 £0.16 billion 11.0%
Total 75,891 2,718 £1.45 billion 100%

* several organisations hold title to assets in more than one category

 

Highlands and Islands Enterprise

Highlands and Islands Enterprise (HIE) is the Scottish Government’s economic and community development agency. HIE’s role is to develop sustainable economic growth across the region. To achieve this it creates infrastructure for future investment, assists large and small businesses with growth aspirations and has a unique role strengthening communities. This includes supporting and developing social enterprise. HIE work activity is guided by the Scottish Government’s Economic Strategy and the Scottish Economic Recovery Plan.

Community asset ownership is a cornerstone of their work to enable resilient rural communities. Such assets provide a base
 from which to generate income, deliver local services, and stimulate development. Part of their work involves matching the needs of the community from the initial idea, through the asset purchase process, and on to long-term asset development (Building Our Future. HIE Operating Plan 2014 – 2017).

 

Social Investment Scotland – provides funding to enable community asset transfer

Social Investment Scotland (SIS) was established in 2001 by the Scottish Executive, Scottish Enterprise, Highlands and Islands Enterprise, Communities Scotland and four banks – Bank of Scotland, Clydesdale, Lloyds TSB and Royal Bank of Scotland – which provided the initial capital base. The Co-operative Bank supplied further capital in 2010. SIS is Scotland’s principal not-for-profit provider of loans to the third sector.

SIS provides loans to charities, community organisations and social enterprises, which might find it difficult to access finance from another source. This is achieved through a variety of funds and financing that SIS administers. One such fund is the Scottish Investment Fund which SIS manage on behalf of the Scottish Government. The fund has over £30 million available for investment.

Although, the SIS is not exclusively in the business of community asset transfer, some of the SIS funded organisations have been the recipients of community asset transfer. There are some good case studies (called customer stories) across a range of sectors including: arts and culture, childcare, community, employment training and education, environment, renewables and social care.

These are profiled on their website: http://www.socialinvestmentscotland.com/resources/case-studies/

 

Scottish case study: the Assynt Foundation

The Assynt Foundation was formed in 2004 in order to push forward a community purchase of 44,000 acres of land and waterways in Assynt, in the North-West Highlands. In 2005, the group successfully raised the funds and purchased this land on behalf of the local community.

The Foundation’s objectives were to manage the land and its assets in a sustainable way for the benefit of the local community and the wider public. However, the state of Glencanisp Lodge, the main building on the land, had been rapidly deteriorating and was unsuitable for use, and heating costs, financially and environmentally, were huge.

Social Investment Scotland provided a loan of £200,000, which was vital for the project to go ahead, making up a substantial shortfall in funding, and also aiding cash flow during the project works. The Lodge now provides a community venue for educational, arts, and community activities as well as generating income to help maintain the estate.

Assynt has plans to renovate more out-buildings as tourist accommodation as well as the conversion of renovated buildings into much needed affordable housing. Future plans include expanding the number of community activity projects, providing workspaces for local residents and exploring hydropower on the estate as another income stream.

Community asset transfer in England

The government-funded Asset Transfer Unit (ATU), part of Locality (the organisation formed by the merger of the Development Trusts Association and Bassac, British Association of Settlements and Social Action Centres), supports organisations in community transfer.

‘Locality’ is an UK expert on asset transfer, bringing land and buildings from the public sector to community ownership and management. Through the ATU, Locality promotes and supports community asset transfer and also helps organisations in a number of ways to manage and develop assets.

 

English case study: Heart Headingley www.heartcentre.org.uk/

Headingley Development Trust in Leeds was established in 2005 by a group of local residents concerned about the rapidly changing nature of the area. Headingley is a relatively affluent part of Leeds with a high proportion of student residents.

Around 2005, Headingley Primary School was to become redundant, with the likelihood of it being converted to student flats. The Trust was determined to find an alternative future for the school.

Although the school was already about to come onto the market, the Trust realised that this would be a long term battle, and they set about developing a range of other initiatives including a:

  • Whole food shop acquired through a community share issue
  • Farmers’ market
  •  Pig and fowl co-operative.

The school was in need of repair and remodeling in order to convert it to community use. The total cost of refurbishment was around £1.3m, financed through a community share issue plus loans and grant funding.

The transfer took place in 2010 and the building is now well used by local people as a community centre, with a main hall and a variety of smaller rooms for hire. Rooms are let on a sessional or longer-term basis and have operated as childcare facilities and band practice rooms.

The Trust puts on regular community events itself, and runs a high quality café within the building. Businesses are also catered for, with flexible deals available in a popular open plan setting. This combination of uses provides a variety of income streams, but the building still uses a number of volunteers as well as paid staff in order for it to be sustainable.

 

English case study: The Wolseley Trust www.wolseley-trust.org/

The Wolseley Trust is located in Plymouth, Devon and is owned and operated by the Wolseley Community Economic Development Trust (The Trust). Its aim is to improve the health and wealth improvement opportunities for local people by encouraging local businesses to develop and prosper.

The Plymouth area is subject to multiple deprivation and was in need of regeneration and jobs. The Trust is a very good example of community asset transfer, a strong council partnership and using a community engagement way of working. It is a large social enterprise and is made up of the Wolseley Business Park on one site, and the Scott Business Park and Jan Cutting Healthy Living Centre, which are both co-located on another site.

The Wolseley Business Park contains 25 business units, a nursery, café and catering facilities, and a supermarket. The Scott Business Park contains 34 business units, and is co-located with the Jan Cutting Healthy Living Centre which provides a meeting place for the local community. Its facilities include a suite of consulting rooms, computer and broadband internet access, a multi-purpose hall, meeting rooms for hire, office space and a community café.

 

The development of Wolseley Business Park – a brief history:

The Wolseley Business Park was previously a school but became a derelict site. Following public consultation in early 1994, it was recommended that a redevelopment of the Wolseley site should include retail, business units and a community resource centre. The site was then purchased from Devon City Council, for management by the Trust. The Devon City Council and other supporting partners, which also included the Plymouth City Council, met the capital costs for the re-development.

A fundamental element of the project was the involvement of the local community. Regular design meetings gave way to a community forum and a local skills register was established to provide employment for local people throughout the development of the site.

Since then, over 260 jobs have been supported on the formerly derelict first site which has now been brought back into lively economic use. It gives local businesses an opportunity to develop in a supportive environment, with clear links to the other local business support services they may need.

The successful working partnership between the Trust and the city councils facilitated the expansion to the second site (a former local hospital). The Plymouth City Council obtained the freehold for the former hospital and invited the Trust to re-develop the site, repeating its earlier partnership. The second site contains the Scott Business Park and Jan Cutting Healthy Living Centre.

A number of other community asset transfer case studies (through Locality) can be found at: http://locality.org.uk/our-work/assets/

Community Asset Transfer in Northern Ireland

Murtagh et al (Community Asset Transfer in Northern Ireland, 2012) states there are various forms of asset transfer; from small-scale, peppercorn rents and licenses to the legal transfer of title to enable larger-scale social enterprises to develop. In Northern Ireland, transfers tend to be small-scale, where ownership is retained by a statutory sector landlord.

Community Asset Transfer also has the capacity to address the physical separation of Protestant and Catholic communities, reduce wasteful duplication of services and build shared resources, trust and relationships, even in the most divided communities.

  • The Suffolk-Lenadoon Interface Group used land and property owned by the Housing Executive to develop retail, childcare and training facilities. The scheme was jointly developed and managed by Protestant and Catholic communities and has helped build trust and reduce violence and anti-social behaviour.
  • The Ashton Community Trust in north Belfast started with a community share scheme, which subsequently enabled investment from central government and EU Structural Funds to build a multi-purpose community facility integrating childcare, commercial and community uses.
  • Kilcooley Community forum is an area-based regeneration organisation working on a disadvantaged post-1960s housing estate in North Down. The Housing Executive supported the development of an allotment scheme for local people, which supplies produce to an over-50s diners’ club.

More information can be found at: https://www.jrf.org.uk/report/community-asset-transfer-northern-ireland

Community Asset Transfer in the United States

It was difficult to find substantial examples of community asset transfer in the United States. This was mainly because of the complexity of the American federal and state government, and local government system. Additionally, their terminology is a little different, that is, they refer to ‘civic and public assets’ and ‘city governments’.

However, a magazine article (NewStart Magazine: The US approach to social enterprise-run assets, July 2014) indicated that in recent years, social enterprise had taken on a wide range of public services in the United States such as libraries, public markets, golf courses and zoos. Generally, the city governments retain ownership of the assets and the social enterprise is responsible for management of the asset.

Of interest, the article stated the major difference between United States and UK social enterprise involved the innovative use of taxation to support social enterprise in the United States. Whereby, public assets are also supported by taxes on commercial property, income and on sale of goods, services and property.

This provides money that is ring-fenced, and which shares the burden on individuals and lessens reliance on any one tax. The article noted that the success of ‘taxation support for social enterprise’ would be dependent, to a degree, on the socio-economic wealth of a city’s citizens, and would vary across states and cities.

 

United States example of Community Asset Transfer

Detroit’s Eastern Market, consists of 200 internal food and flower stalls. The market was strengthened by the transfer of management to a non-profit corporation in 2006. The City still nominates one-third of the board and did issue a $1.5m bond for repairs but has gradually withdrawn funding and control. The corporation must now sustain itself through rents from the food processing companies, wholesalers and retail vendors in and around the market and from foundation, grant money and fund-raising. Food stamps are taken (and matched by a state fund) so lower-income people are also served.

More information can be found at:

http://newstartmag.co.uk/features/social-enterprise-united-states-public-assets-taxation/

Australian case study: The Abbotsford Convent Foundation (ACF), Melbourne http://www.abbotsfordconvent.com.au/

The ACF is a not-for-profit organisation that owns and operates the Abbotsford Convent on behalf of the public. The Convent is situated close to Melbourne’s CBD with 11 historic buildings, gardens and car park spread over 6.8 hectares beside the Yarra River.

With a focus on creativity, culture and learning the Convent is now home to over 100 artist studios and offices for small businesses, a radio station, four eateries, an open air cinema, food and craft markets, two galleries, an extensive program of events and venues for rehearsals, performances, classes, workshops and conferences.

The Convent had become derelict and run down and in 1997 a property developer won a tender to purchase the site. They planned to demolish the buildings and build apartments. Local people were opposed to this plan and formed the Abbotsford Convent Coalition. In 2004, the Coalition and the public finally won the fight to save the Convent.

The State Government of Victoria gifted the site to the public; with $4 million to commence the restoration works and the City of Yarra contributed $1 million. With this, the Abbotsford Convent Foundation was born as the custodian of the site to own and manage it on behalf of the people, with a focus on arts, culture and learning. A strong team was built to implement the strategy and vision and the restoration works began.

Currently, 60% of the buildings have been restored, hundreds of tenants fill studio and office spaces, the venues are filled with performances, workshops, rehearsals, conferences and meetings and there is an extensive program of events staged throughout the year. With close to a million annual visitors, the Convent is now one of Australia’s most popular cultural icons.


Australian case study: Charcoal Lane, Melbourne
http://www.charcoallane.com.au

Charcoal Lane, located in a 150 year old bluestone building, is a modern restaurant serving contemporary Australian cuisine infused with native flavours, employing and training disadvantaged indigenous and non-indigenous young people.

Charcoal Lane was established by Mission Australia (a large national community service organisation) as a social enterprise that also acts as a transitional labour market programme, creating training and employment pathways for disadvantaged youth in a commercial hospitality environment.

Charcoal Lane works closely with both the Victorian Aboriginal Health Service (VAHS) and Aboriginal Affairs Victoria (AAV). Belonging to the Victorian Government through AAV, the Charcoal Lane building is leased to VAHS, who have in turn sublet to Mission Australia. The business has not been required to pay VAHS the full market rate of rent during its three year establishment period, and the AAV also contributed to the initial fit-out costs.

Community Asset Transfer in New Zealand

Community Asset Transfer is a well-known approach in the United Kingdom, however it is not commonly practiced here in New Zealand (Thriving Communities: Auckland Council’s role in supporting communities to flourish – a discussion document, October 2012).

Jennings (2014) discusses community asset transfer in her report, Community Economic Development: Understanding the New Zealand Context. She suggests there is a real opportunity for community asset transfer with territorial authorities to be further explored.

Some council-owned assets have also been transferred to community organisations. For example, when the Auckland supercity was created, the ownership of surplus assets was sometimes transferred to a community organisation (Financing Community Economic Development in New Zealand, Jeffs. 2015). This also includes long-term leases for organisations
in council owned buildings and/or asset transfer of land and buildings to community organisations.

 

New Zealand case study: Community Business and Environment Centre Cooperative Society Ltd (CBEC) http://www.cbec.co.nz

The original purpose was to create jobs and support environmental sustainability in a high deprivation, low employment area (the Far North) and maintain local ownership of businesses and services.

It was achieved through creating environmentally sustainable businesses and community services that provide training and employment for local people with the profits going back into the community.

CBEC operates as a Cooperative Society, with limited purpose. They have charitable status, registered with the Charities Commission. CBEC has community “shareholders” who have voting rights, but no dividends are paid.

CBEC has approximately 45 paid permanent staff  plus casual employees and a gross annual turnover of approximately $3.5 million.

CBEC operates a range of community enterprises, including a bus service, environmental education, labour hire, the swimming pool, a home insulation service and a garden centre. And, until recently, they held the local waste management and recycling contract. (Note that when CBEC held the waste management contract that the local Council own the land and the buildings of the Kaitaia Recycle Centre).

The whole community has benefitted in a variety of ways. Income from the various enterprises has gone back into the Far North economy through local business and employment creation, wages, and by purchasing goods and services from local businesses. Additionally the area is becoming more environmentally sustainable.

 

Asset transfer from New Zealand government

The government return of significant assets to Maori/ Iwi through the Treaty of Waitangi claims settlement process can also represent asset transfer. This illustrates the concept of collective/community ownership by Iwi. It is providing Iwi with a vehicle for social enterprise development. In fact, the development of Iwi-based social enterprise development has increased following Treaty of Waitangi settlements (New Zealand Business Council for Sustainable Development and Westpac, 2005).

The government’s Social Housing Reform Programme is also an opportunity for asset transfer. The law change in 2013 to open up social housing (the housing stock is owned by government) to approved non-government providers to encourage a diverse and innovative approach to ownership of social housing. One such example is the New Zealand Housing Foundation, a not-for-profit charitable trust that delivers affordable housing for low income households through a co-ownership arrangement with individuals.

References

[1] Pratchett, Prof. L., Durose, Dr C., Lowndes, Prof. V., Smith, Prof. G., Stoker, Prof. G. & Wales, Dr C. (2009) Empowering communities to influence local decision making. Evidence-based lessons for policy makers and practitioners. London, Department for Communities and Local Government 

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