Wealden District Council’s General Fund Asset Disposal and HRA Asset Disposal Policies set out the principles on which it will consider expressions of interest for the transfer of its assets. In doing so the Council needs to balance the aspirations and ambitions of its local communities with the stewardship of assets, with the wider corporate objectives and priorities and its place shaping ambitions.
This framework centres on the ambition to achieve mutual benefit for partners and local communities whilst helping to generate income for service delivery and protect against future liabilities for any newly formed unitary authority following Local Government Reorganisation (LGR).
The Council recognises that local control of assets can stimulate the involvement of local people in shaping their environment and communities, improving the social, economic and environmental wellbeing of the people that live there. However, the transfer of assets may not be appropriate in all instances; and must demonstrate how they will promote or improve the economic, social or environmental wellbeing of the community. Where opportunities do exist, this framework seeks to bring clarity and structure to the process as well as setting out expectations, responsibilities and timeframes.
The purpose of this framework is to set out the Council’s approach to the disposal of assets to give local communities greater local control and influence and to protect what is most important to them.
The Council seeks to be proactive and collaborative in respect of potential asset disposals ahead of LGR, responding to the needs and wishes of its local communities. This framework builds on the Council’s commitment to work with and provide clarity to parish and town councils and community interest groups on its approach to asset disposal and the options that may be available.
This framework is intended to support open engagement between the Council and its town and parishes and community interest groups, to influence place shaping ahead of LGR and to support delivery of the vision and objectives of the Council Strategy.
The disposal of assets to local communities must have regard to the following policy objectives:
- Achieve the promotion or improvement of the economic, social, environmental well-being for the area and its residents.
- Be financially sustainable for the Council and the purchasing town, parish or community interest group.
This framework must be read in conjunction with the following strategies and policies:
The purpose of this framework is to encourage open and honest conversations between the Council and its town, parishes or community interest groups. It is therefore important for the Council to set expectations at the outset in relation to assets that may not be eligible for disposal under this framework.
These assets will include:
- Assets that generate commercial income or have the potential to generate commercial income.
- Assets held to fulfil strategic priorities.
- Assets held for future capital realisation.
- Assets or land held for development by the Council or is likely to have development potential in the future.
- Vacant land or buildings that can generate a significant capital receipt.
- Land or assets comprising dwellings held in the Council’s Housing Revenue Account.
- Land held for the purposes of providing Suitable Alternative Natural Greenspace (SANG).
There may be exceptional circumstances whereby the Council will consider transfer of these types of assets where an overall transfer still results in a net saving for the Council, and these will be considered on a case-by-case basis as required.
The Council commits to taking an open and collaborative approach to discussions on the disposal of assets. To ensure a smooth process during discussions and any transfer, towns and parishes, or where appropriate community interest groups, will be expected to:
- Clearly demonstrate benefits to the community.
- Provide the supporting information in a timely fashion and in line with the timeframes outlined within this framework.
- Cover their own legal and other costs associated with the disposal.
- Provide evidence of its ability to fund or make provision to fund any assets in a sustainable way without support from the Council.
- Be open, honest and realistic in discussions about what can be achieved and at what cost.
The following sets out the principles which will support discussions on the disposal of community assets include:
Community Benefit
- Ownership of the asset must benefit the economic, social, environmental well-being for the area and its residents.
- Ownership of the asset must help deliver the Council’s and the community’s wider vision and aspirations for their area.
- Organisations must engage with partners or other stakeholders that may be impacted by the proposal.
Financial Sustainability
- Ownership of the asset must be financially sustainable for the Council and the purchasing town, parish or community interest group.
- The proposal must be sustainable and resilient over the medium to long term.
- Must be transparent over the impact of the asset on town and parish council’s or community interest groups’ financial and asset management plans.
Legal Compliance
- The Council and the purchasing town, parish or community interest group will ensure that all legal requirements in relation to the disposal and transfer of the asset are met in full.
- The Council and the purchasing town, parish or community interest group will comply with all relevant guidance and legislation pertaining to the disposal and transfer of the asset.
- All parties will ensure timely compliance with required timeframes.
Expressions of Interest
- Towns and parishes or community interest groups will submit Expressions of Interest (EOI) setting out the assets they wish to acquire.
- EOIs must include details of how the asset will achieve the promotion or improvement of the economic, social, environmental well-being for the area and its residents.
- EOIs must be accompanied by evidence of a resolution/decision in principle by the relevant town or parish council of its interest in acquiring the asset.
- EOIs will not be considered where they do not meet the principles and policy objects as set out the WDC General Fund Disposal and HRA Asset Disposal Polices and this framework.
- Community interest groups wishing to submit an EOI must meet with the eligibility requirements in Appendix 1.
Appendix 1
A community interest group wishing to submit an EOI must be constituted in one of the following ways:
- Companies limited by guarantee with charitable status
- Community Interest Companies, limited by guarantee
- Community Benefit Industrial & Provident Society with an asset lock
- Community Interest Company, limited by shares
- Charitable Incorporated Organisations
The organisation must also be:
- A not-for-profit corporate legal entity
- Have community and/or social objectives
- Located within the boundaries of the Council area
Invitation to Submit a Business Proposal
- The Council will consider the EOIs and confirm whether the organisation will be invited to submit a Business Proposal for the acquisition of the asset.
- Where an EOI is not taken forward, the Council will provide a written explanation of the reasons for this.
- The Council will provide organisations with the following information:
- Estimated costs for maintenance of the asset.
- Estimated market value of the asset (if any).
- Condition survey report (where available or to be commissioned and funded by the town/parish where not available and if required).
- Any outstanding loan or funding agreements in place.
Submission of a Business Proposal
- The Business Proposal must detail the following:
- Assessment of how proposals help deliver the Council’s and the community’s wider vision and aspirations for their area.
- Evidence on the ability to fund or make provision to fund any assets in a sustainable way over the medium to long term without ongoing support from the Council.
- Assessment of risks arising from the transfer and ownership of the asset and how these will be mitigated.
- Evidence that the asset is being acquired for the purposes of carrying out their statutory functions / company objects or for the improvement or development of their area.
Valuation
Where any asset is considered for disposal, the value must be established by a Royal Institution of Chartered Surveyors (RICS) Registered Valuer. Valuations will be undertaken in accordance with the RICS Guidance and best practice.
Where applicable, for low value assets officers will have discretion regarding the valuation process and my defer to the latest published end of year accounts
Legal Framework and Consideration
When the Council considers assets for transfer, it will carry out appropriate due diligence in relation to title and determine the relevant statutory basis to enable the transfer. In most cases this will be pursuant to the relevant provisions of the Local Government Act 1972 or Housing Act 1985.
The Council retains the discretion to dispose of an asset at an undervalue if it is satisfied that the conditions of any consents issued by the Secretary of State are met. In exercising that discretion, the Council will consider each Business Proposal and the financial impact on the Council.
In accordance with the Explanatory Note on Financial Decisions before Local Government Reorganisation, issued by the Ministry of Housing, Communities and Local Government, any discretion on reductions will apply solely to assets valued at under £100,000 and the level of reduction will be assessed in line with the table set out in Appendix 2.
Any transfer will be made in accordance with the Council’s Constitution.
Appendix 2
- Asset valued at up to £10,000 – A reduction of up to 75% may be applied depending on condition and liabilities
- Assets valued at between £10,001 and £50,000 – A reduction of up to 50% may be applied depending on condition and liabilities
- Assets valued at between £50,001 and £99,999 – A reduction of up to 25% may be applied depending on condition and liabilities
Legal Transfer
If an application is successful, the terms of transfer will be negotiated. Upon reaching mutual agreement, these terms will be formalised in Heads of Terms, following which the disposal will be progressed by the Council’s Corporate Assets Team with support from Housing Services (HRA land) and Legal Services.
A target timescale for the Transfer will be agreed at the time; however this will depend on the type of transfer and the legal work required.
Where appropriate, disposals will include provisions for securing a share of future enhanced values using overage and claw back clauses.
The applicant may be expected to meet some or all the Council’s transactional costs incurred, for example costs relating to legal or surveyor fees.