Asset Transfer Policy, Low Value Assets (less than or equal to £15,000)

2.1 Dorset Council has responsibility for land and buildings through various means:

• owned Assets. Dorset Council hold either a freehold interest or long lease (virtual freehold, usually in excess of 100 years) of the asset
• dedicated assets. Dorset Council has responsibility to maintain land due to a historical contractual obligation but does not have the freehold ownership for example areas of public open space or play areas under planning agreements
• statutory responsibility. Dorset Council has the responsibility for maintaining assets and provide services under legislations, for example highway land or closed burial grounds

2.2 The disposal of assets by Dorset Council broadly fall under two types:

• market sales-where ‘best consideration’ is obtained widely interpreted as the best price/market value (as defined by the Red Book)
• disposal at less than best consideration. This could either be a transfer for a nominal sum or reduced purchase price but will certainly be lower than the market value

2.3 Assets will be considered for transfer where one or more of the following benefits will be provided:

• the transfer of the asset will provide social, economic or environmental well-being benefits to the local community (for example through the ability to manage and regulate ‘open spaces’ at a local level)
• the transfer would be a ‘tidying up’ exercise passing incidental pieces of land and landscaping or parts of these to a local level
• the asset has the potential to provide for a community facility which a parish/town council, third sector or community group has demonstrated that they have the skills, drive and access to resources to deliver (for example a village hall)
• the transfer of the asset will enable the continuation of a service or use of a facility to the local community that Dorset Council is no longer able to provide (for example public conveniences)
• a community partnership can be entered into based on public access to and use of an asset
• it is believed that a town/parish council or other community group would be able to secure a grant and/or have access to funding streams not available to Dorset Council

2.4 Dorset Council reserves the right not to dispose or transfer its assets to others for reasons including but not limited to:

• the financial impact or potential impact from loss or income or the benefit of a capital receipt which outweighs the social value being created in isolation
• adjoining/surrounding land not being transferred
• potential for redevelopment either with or without Dorset Council land
• historic and or complex land issues which would make a disposal/transfer resource prohibitive to Dorset Council
• there being a large number of small non-strategic open space land parcels that require significant due diligence and incur significant legal costs and may be best served through a service delegation agreement
• there is a statutory responsibility and any transfer would also require the transfer or undertaking of any service responsibilities

 

3.1 The scope of this policy document applies to community asset transfers.

3.2 Community asset transfer involves the transferring of land, buildings or other property assets (referred to as assets throughout this document) from a statutory body to a Town and Parish Council or community organisation in order to achieve public benefit.

3.3 The application of this policy may be triggered by either external requests from local organisations and/or triggered by Dorset Council through identifying that an asset is declared ‘surplus’ to requirements following a review of a particular asset or part of a programme of possible asset transfer reviews.

3.4 Those Assets that are currently outside the scope of this Policy are detailed at Annex B

4.1 The transfer of the responsibility for a low value asset will be determined by the Corporate Director of Property & Assets in conjunction with the Portfolio Holder for Economic Growth, Assets & Property and the Portfolio Holder for Customer & Community Services.

All such requests will be considered and decided upon following submission of an asset transfer application form.

4.2 There is a policy presumption that where an asset is to be transferred this will be offered on the basis of a freehold transfer in order to maximise local control and provide opportunities for the applicant to consider investment in the asset and/or other funding opportunities.

4.3 The Council will undertake to contract for any freehold transfers in accordance with Dorset Council’s standard terms and conditions to include conditions on any transfer to protect the future community use of the property by way of restrictions, preferential arrangements for Dorset Council use, future sale of the property by way of an equitable share in any benefits derived and financial, project failure or there no longer being a requirement through the use of reversionary mechanisms.

Any conditions will be considered by the Corporate Director of Property in conjunction with the Portfolio Holders for Economic Growth, Property & Assets and the Portfolio Holder for Customer & Community Services.

5.1 The following eligibility criteria would apply. 

Criteria A 

The Asset Transfer Policy is open to:

• Parish or Town Councils
• unincorporated charitable organisations
• companies limited by guarantee with charitable status
• Community Interest Companies limited by guarantee
• Community Benefit Industrial & provident Societies with an asset lock
• Community Interest Company limited by shares
• other organisations or clubs that satisfy Dorset Council’s due diligence checks

Criteria B

Organisations can be:

• legal entities
• non profit making
• local clubs or organisations
• have community and or social objectives
• be located within the boundaries of Dorset Council area or can demonstrate that they provide services within the area to residents

Criteria C

All community assets must remain open to the wider public. This does not disqualify special interest proposals or groups; however, evidence must be provided of how the asset will be used in an inclusive way.

Criteria D

Applicants must provide full contact details for the organisation including someone with the relevant decision-making authority.

Criteria E

Applicants must provide supporting evidence where required and complete all sections of required forms.

5.2 Dorset Council will not consider expressions of interest from organisations which are political or with political affiliations, organisations engaged in supporting candidates for political office, individuals or businesses who intend to primarily run the service or use the asset for commercial gain.

5.3 In addition to the eligibility criteria set out above the assessment of requests will consider the following criteria areas:

• community benefit
• local control
• sustainability
• governance of legal structure
• financial standing
• maintenance and ability to maintain and manage assets
• commitment

Further details on the assessment criteria are set out in Annex C.

 

6.1 Dorset Council is committed to applying the following principles in how it considers property transfer requests:

• being transparent in the process for asset transfers including timelines and decision making with as much information published online as possible
• providing timely information to local organisations to make an initial view on whether they are interested in discussing property transfer arrangements
• assessing property transfer requests fairly through the application of this policy
• no capital or other funding will be provided as part of the transfer and all future costs would be covered by the organisation taking on the asset
• no rents or charges will be applied for use by Dorset Council should there be any potential ongoing or temporary space requirement identified by the Council provided the requirement for such space is not unreasonable and does not exceed 25% of net internal area or of the available hours
• where assets are identified as being surplus and no interest in them has been expressed by other parties the Council will consider closure of a facility, cease maintaining an asset where it is safe to do so, ‘stopping up’ a building or facility’ and/or its possible demolition taking due regard of any historical significance and requirements to consult, allowing an asset to return to its natural state
• provision of a named contact and respond in a timely manner to all property transfer requests

 

7.1 The Asset Transfer Process is set out at Annex D and consists of the following elements as set out in paragraph’s 8 to 14 in the following sections.

8.1 Any organisation expressing an interest in particular assets will need to submit a request using the Council’s standard Asset Transfer Application Form as provided at Annex E.

8.2 The application will be initially screened by the Dorset Council’s Property Dept to determine whether they fall within or outside of this policy and whether the value of the asset being the subject of any request is below or above £15,000.

8.3 An evaluation will also be undertaken as to the financial impact or potential impact to Dorset Council weighted against the social value being created

8.4 Following consideration of any asset transfer requests a decision by Dorset Council and the respective applicant organisation is needed on the sign-off of individual asset transfers.

All such decisions will be taken in accordance with this policy and endorsed by the Cabinet Portfolio Holders for Property and Assets and Customer & Community Services as delegated by Cabinet.

8.5 The Council may need to balance the competing interests of community groups and an assessment will need to be made as to the option that will deliver most sustainable benefit to the local community.

8.6 In considering the best terms for an individual asset transfer a recommendation will be made on the capital subsidy, if required, below market value in order to maximise the use of the asset for community benefit. Market subsidies will only apply in relation to assets considered under this policy.

9.1 As part of Dorset Council’s commitment to the transfer of assets support will be provided to town and parish councils and community organisations, where required, to enable them to consider submitting an asset transfer application form.

In particular this will include:

• online guidance and information including template asset transfer application form
• a named contact to support organisations to submit asset transfer applications and to keep applicant updated at all stages of transfer process

10.1 On receipt of an asset transfer application form Dorset Council’s Property Dept will then:

• check that the application meets the policy criteria and the value of the asset
• check that the applicant meets the eligibility criteria to be considered and notify the applicant accordingly
• inform the applicant if there is more than one interested party and whether a shortlisting process is required

10.2 Once an application has been confirmed as meeting the policy criteria and the Council confirms it is willing to consider any such transfer Dorset Council’s Property Dept will then:

• notify the local member(s) and seek their views
• supply, if requested, the following information to the applicant
  • estimated maintenance costs
  • estimated value of the property (if any)
  • condition survey report and any other relevant information

10.3 Parishes/Town Councils & Community Groups may wish to undertake their own due diligence exercises and in doing so will be responsible for any such works and legal costs associated with them.

10.4 If the applicant wishes to then proceed with the transfer request, in light of this information, then the expression of interest will be considered by the Corporate Director of Property and Assets who will determine in conjunction with the relevant Portfolio Holders the preferred applicant (if more than one interested party), whether to agree to the transfer and any conditions that may form part of the transaction or reject it.

The guidance and expression of interest form is shown in Annex E.

11.1 All low value assets transfers will be offered on the basis of a freehold transfer following acceptance of the application. Any such terms and conditions stipulated by the Council will be non-negotiable.

11.2 Dorset Council’s standard form of contract/lease will be used for all asset transfers although the Council reserves the right to vary these at its sole discretion in exceptional circumstances.

11.3 The decision on the sign off of all transfers will be delegated by Cabinet to the Portfolio Holders for Customer and Community Services and Economic Growth, Assets and Property.

12.1 All applicants are entitled to appeal against an element of this policy if they feel that a decision has been unfair/and or there has been a breach of policy,

12.2 Appeals should be made in writing via the Complaints Team stating clearly the issue or reference to the part of the policy that has been breached, within 28 days of the decision being made.

12.3 The appeal will be managed in line with the Council’s stage 2 complaints procedure. Dorset Council’s decision is regarded as final.

13.1 All asset transfers are unique and it is difficult to provide specific timescales. However, Dorset Council will endeavour subject to the number and extent of applications and the workload priorities of the Assets & Property and Legal Directorates to seek to adopt the following.

13.2 Pre-Application

Allow for between 4 weeks for Applications to be submitted from time property is first declared surplus/advertised.

13.3 Stage 1

In order to assess and evaluate an application (particularly where a number of expressions of interest have been submitted for the same assets and a short listing process is required) and for an applicant once in receipt of all relevant information to confirm they wish to proceed a period of between 8-12 weeks from receipt of an application or from the deadline for submitting applications should be allowed.

Should an application be placed on hold the applicant will be informed within this timeframe of the time required by the Council to consider alternative options (dependent on the number of applications received and being considered at any one time).

13.5 Stage 2

Work with successful applicant(s) to agree a realistic timetable for final completion of the asset transfer with a target timescale of between 8-12 weeks.

16.1 Following the approval and adoption of this policy by Cabinet guidance and templates will be developed and published to support organisations to submit expressions of interest.

16.2 This policy will apply for all transfers as from the beginning of July 2021 and will not be applied retrospectively.

16.3 Where leasehold arrangements are currently in place this policy will be applied at the point in time where any such leases are due for renewal.

Local Government Act 1972 (1972 Act)-S123

sets out that Local Authorities must obtain ‘best consideration’ for all disposals

Local Government Act 1972: General Disposal Consent 2003 (‘General Consent order’)

gives permission for Councils to dispose at less than best consideration provided if the value foregone is less than £2m (in capital terms) and the transaction benefits the economic, social or environmental wellbeing of the area. If the value foregone is greater than £2m approval from the Secretary of State is required.

Local Government finance act (1988)

RICS Valuation. Professional Standards (“Red Book”)

defines market value when considering the price obtained from a disposal

Localism Act 2011

introduced the concept of local communities taking more control of assets in their area.

European Commission State Aid Rules

rules to avoid state aid rules which could distort competition to be reviewed post Brexit.

It is proposed that some types of properties are considered out of scope of this policy. This means that Dorset Council will not consider such requests under this policy.

The Council is undertaking a range of strategic property reviews to inform the best use of those assets for the benefit of all Dorset residents.

Some types of assets are best managed strategically and thereby retained by Dorset Council just as others are best managed locally.

The following property areas are out of scope:

• assets held for investment purposes both those assets that generate a net income for Dorset Council and those held for future capital, revenue regeneration or corporate realisations
• vacant land or buildings that may generate a capital receipt, regeneration revenue or corporate aspirations
• assets of a rural nature given Dorset Council’s role as a small holding’s authority
• education and statutory early years premises due to Dorset Council’s role as a Local Authority for education purposes (unless such assets have been declared surplus)
• care facilities that form part of a care contract
• residential properties given Dorset’s role as a Housing Authority
• land held for future development by Dorset Council or partner schemes as it would not be financially prudent to devolve land and be required to repurchase it in the future
• car parks owned and run by Dorset Council
• buildings used primarily as delivery sites for Dorset Council services
• potential buildings which may be considered as Community Access Points/Hubs in later years to ensure maximum potential for building redevelopment/investment
• vacant Land or buildings that can generate a capital receipt in excess of £10,000 which is the de-minimus level for capital accounting purposes

All applicants will be required to complete an expression of interest (EOI) 

Template Forms will be published online as part of a transfer toolkit.

These template forms will include sections to complete in relation to the criteria areas with an expectation that more detailed information would be provided where a business plan is required.

Assessment criteria area a. Community benefit 

EOI evidence - Statement of intended community benefits

Business plan evidence:

• strong track record of delivery of community benefit 
• evidence of community impact and residential consultation on proposal

Assessment criteria area b. Local control 

EOI evidence - Meet organisational eligibility criteria

Business plan evidence: - Evidence that residents will have a say in future decisions on the property

Assessment criteria area c. Sustainability

EOI evidence - Ability to manage property 

Business plan evidence:

• clear long-term plan for viability
• a risk assessment and how risks will be mitigated 

Assessment criteria area d. Governance and legal structure 

EOI evidence - Meet eligibility criteria 

Business plan evidence - Settled legal entity with proven ability to manage change.

Assessment criteria area e. Financial stranding 

EOI evidence - Established record of financial probity. 

Business plan evidence - Established record of financial probity with evidence of long-term plan.

Assessment criteria area f. Maintenance 

EOI evidence - Ability to manage property

Business plan evidence - Proven record of managing maintenance issues.

Assessment criteria area g. Commitment

EOI evidence - Willingness to participate in evaluation

Business plan evidence - Willingness to participate in evaluation and share learning.

 

Assets identified by the council to be surplus to requirement and can be considered for release or asset transfer application form received from Town/Parish councils or community groups.

Stage 1

1. Assets not available or application not within policy. The process stops or 
2. Assets available. Asset Value determined to be less than £15k. Application within policy. Local Members Informed/Consulted. determined By Corporate Director of Property with Portfolio Holders.

Stage 2 

1. Application Accepted - Legal services instructed terms of transfer drafted using standard lease/contract then, 
2. Community asset transfer complete and handed over to organisation and takes responsibility for asset

Application form