Community Asset Transfer (CAT)

2. Community Asset Transfer (CAT) Richard Bridge Head of Conusltancy,Training and Quality

3. What is CAT? • The term ‘Community Asset Transfer’ is defined as ‘where the Council transfers land or buildings into the ownership or management of a Voluntary and/or Community Sector (VCSE) organisation or social enterprise’’.

4. National context • The 2006 White Paper, Strong and Prosperous Communities • 2007 Quirk Review, Making Assets Work, • 2007 Empowerment Action Plan • Advancing Assets (AA) programme • Community Assets Programme (CAP) • 2008 'Communities in Control: Real People, Real Power • Asset Transfer Unit

5. National context • Big Society • ‘We want to pass significant new rights direct to communities and individuals, making it easier for them to get things done and achieve their ambitions for the place where they live’.

6. National context • Localism Act (2012) • Community Right to Bid • Community Right to Challenge • Public Services Act (2012) • Will require all statutory bodies to include a measure of social value in all their procurement decisions

7. CAT drivers • “The starting point is therecognition that optimising the use of public assets is not the primary objective: the over-riding goal is communityempowerment.” • Making Assets Work, the Government’s Efficiency Champion, Barry Quirk • Community led • Property led • Local authority corporate objectives

8. Transfer formats • Freehold transfer • Long term lease • Short term lease • An annual licence

9. Five structures for VCSE organisations • Unincorporated association - can be a reg. charity if objectives are charitable • Company limited by guarantee with charity status • Community Interest Company (CIC) limited by guarantee – cannot be reg. charity but is required to have an asset lock. • Community benefit Industrial & ProvidentSociety with an asset lock - cannot be a reg. charity • Charitable Incorporated Organisation –new format

10. Benefits of Charitable Status • Tax relief • More opportunities for grants and funding • 80% statutory rate relief.

11. CAT transfer terms • Less than market value • Recognise real value of social impact • Recognise the value of and contribution by the local authority • Asset lock • Co-production

12. Myth busters • Disposal at an undervalue • General Disposal Consent 2003 allows this without permission from Sec State as long as the land disposal contributes to the “promotion or improvement” of the economic, social or environmental well being of the area • And provided that the undervalue does not exceed£2m

13. Myth busters • State Aid requires all 4 of following in order to apply: • Aid granted by a Member State or through State resources • Favours certain undertakings or the production of certain goods • A distortion (or threat of distortion) of competition and • An effect on trade between member states. • Also • de-minimis current limit is 200,000 Euros over a 3 year rolling period. • generally accepted that there is not a competitive market across Europe for bodies providing “not for profit” services to meet the needs of their local communities

14. Risk Management • Risks v opportunity • Being Risk Aware • not Risk Averse

15. Common identified risks • Not locally controlled/democratic/ open to all and non profit distributing. • Does not have the capacity/ability/skills/experience to manage the asset • Does not have cash to refurbish the asset • Can’t afford to maintain the asset • Asset is captured by minority interest group • Asset is not open to all • Confusion about liability of organisation • Conflict between competing organisations for an asset • Little activity or usage of the building • Poor reach into wider community. • Asset has to be protected

16. Risk management • Council promotes co-production as the model -a true ongoing partnership of equals - fair, equitable and mutually beneficial • Risks need to be managed – setting criteria • Risk and balance of responsibilities should be shared appropriately. • Cannot expect to give away all risk but still keep total control. • Risk management tools

17. The opportunity • Local organisations often best placed to manage facilities in their local communities • It empowers local communities, puts local organisations in control, encourages pride of place • Deliver better services to meet the needs of the community • Local knowledge, use of volunteers and hands-on management contributes towards community empowerment

18. The opportunity • Financially –can generate wealth • Reduce dependency on grants. • Lower overheads and better value-for-money, • Apply for external funding • Secure loan finance • Contribute towards council social, economic or environmental objectives

19. Community groups and CAT • What is being asked of community groups and why?

20. What is being asked of community groups? • A local, non-profit distributing charity/community group/social enterprise • The asset or value of the asset is protected and preserved • A governing document that ensures local control, inclusivity, democratic and accountable. • Prove it has the necessary skills and experience to deliver. • A financial or business plan to ensure long term sustainability

21. What is being asked of community groups? • Meets a demonstrable local community need • Contributes towards community empowerment and • Helps to meet councils aims and objectives • Note re community groups need for independent advice

22. For more information • Community Matters Online Guidance and information • www.communitymatters.org.uk/onlineguidance • Community Matters Free Advice Service • www.communtymatters.org.uk/support • or phone 08454 847 4253 Monday, Wednesday and Friday mornings • Asset Transfer Unit (ATU) www.atu.org.uk • Richard Bridge, Head of Consultancy, Training and Quality, richard.bridge@communitymatters.org.uk • or phone 0207 837 7887