Part 1
ITEM NO.
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REPORT OF THE STRATEGIC DIRECTOR OF CUSTOMER AND SUPPORT SERVICES,
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TO
DEPUTY CITY MAYOR
9th April 2013
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TITLE: Disposal of Assets Listed as of Community Value
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RECOMMENDATIONS:
THAT the process and evaluation grid included in this report is adopted as a structure for
evaluating bids for the acquisition of council properties listed as Assets of Community
Value.
BACKGROUND DOCUMENTS:
Report: ASSETS OF COMMUNITY VALUE – PART 5, CHAPTER 3 OF THE LOCALISM ACT
2011 and ASSETS OF COMMUNITY VALUE (ENGLAND) REGULATIONS 2012 (approved
17th December 2012)
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KEY DECISION: Yes
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DETAILS
1
Background
1.1
The council has recognised that the transfer of some of its properties to
community organisations is a positive approach to enhancing social
cohesion, maintaining services/activities in financially constrained
environments, and creating social capital.
1.2
The council has adopted a policy to process applications for assets to be
listed as of Community Value. It is recognised that a number of properties
listed or likely to be listed in the future will be owned by the council.
Therefore the council needs to adopt a fair and transparent method for
dealing with the disposal of listed assets and manage the potential
incompatibility of objectives inherent in the process.
In terms of the Localism Act 2011 “disposal means disposal of the freehold
with vacany possession or the grant or assignment of a q
The moratorium process will establish timescales within which the council
will operate. In addition it is likely that one or more “bids” to purchase such
properties will be from community organisations and it will be necessary to
establish an approach to measuring the value of such bids in comparison
with bids from more commercial approaches.
2
Evaluating Bids for Assets listed as of Community Value
Where the council is the owner of a property listed as an Asset of
Community Value and determines to dispose of the property it will be
restricted by a number of delays imposed by statute which are designed to
enable community groups (as defined) to prepare and make a bid for the
asset.
Given the intention of the legislation, it is likely that the council will receive
one, or more, bids to acquire the property from community groups. It is also
likely that those bids will seek to promote non-monetary values as well as
include financial clauses. Therefore the council needs to establish a way of
evaluating those bids against each other and against more ‘traditional’
commercial approaches.
(Note: under the General Disposals Consent 2003, the council may transfer
property at less than its market value without permission from the Secretary
of State provided that the purpose for which the land is transferred is likely
to contribute to the promotion or improvement of the economic, social or
environmental well-being of the area. However the Commission
Communication on State Aid Elements in Sale of Land and Buildings by
Public Authorities still applies. Circular 06/03: Local Government Act 1972
general disposal consent (England) 2003 states that “When disposing of
land at less than best consideration authorities are providing a subsidy to
the owner, developer and/or the occupier of the land and property,
depending on the nature of the development. Where this occurs authorities
must ensure that the nature and amount of subsidy complies with the State
aid rules, particularly if there is no element of competition in the sale
process. Failure to comply with the rules means that the aid is unlawful, and
may result in the benefit being recovered with interest from the recipient”).
It is therefore proposed that a 2-stage approach is adopted for property
listed as an Asset of Community Value;
1)
At the point at which the property is
declared for disposal (or at the point that it is listed – whichever is
the later) a decision is made as to whether the council is prepared to
dispose at less than the market value.
2)
If the answer to 1) is YES, all bids are
evaluated against the criteria set out in Annex A. If the answer to 1)
is NO then the market value of the bids will be the only criteria
considered.
EQUALITY IMPACT ASSESSMENT AND IMPLICATION:
ASSESSMENT OF RISK: HIGH
SOURCE OF FUNDING: n/a
LEGAL IMPLICATIONS: Provided by the Manchester and Salford City Council combined
legal services division:
FINANCIAL IMPLICATIONS:
OTHER DIRECTORATES CONSULTED:
CONTACT OFFICER: David Horsler x6994
WARD(S) TO WHICH REPORT RELATE(S): All wards