Asset Transfer Policy High Value Assets (with a value in excess of £15,000 and/or highly complex)

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 falls 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 of 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 high value asset will be determined by an Asset Transfer Board chaired by the Portfolio Holder for Economic Growth, Assets & Property and consisting of Portfolio Holders and Senior Council Officers as set out in paragraph

8.2 below which will meet on a quarterly basis or as appropriate to consider all such requests. All such requests will be considered and decided upon following the submission of an Asset Transfer Application Form and where considered appropriate supported by a Business Plan.

The Asset Transfer Board will after considering recommendations from the Corporate Director for Assets & Property determine the most appropriate arrangements for a transfer on a case-by case basis taking into consideration factors such as applicant preference, financial and legal considerations etc.

The different types of arrangement are broadly:

• freehold transfer-this is where an asset is permanently transferred to a local organisation in accordance with Dorset Council’s standard terms and conditions
• long term lease. 25 years or more in relation to a building in accordance with Dorset Council’s standard terms and conditions
• short term lease or other management arrangement. A lease less than 25 years or license to occupy or other tenancy agreement in accordance with Dorset Council’s standard terms and conditions

These three options are Dorset Councils preferred approach.

4.2 Other types of solutions that might also be considered are:

• Community Use Agreement with a local organisation or a local school to protect community use access and prices with zero subsidy and risk transfer to the third party within a partnership working agreement.
• management contract a long-term lease, contract and service specification to a specialist service delivery provider which may link to a capital investment by a third party with zero subsidy, full risk transfer and potential income share.
• Service Delegation Agreements. These are usually used where there is a large number of small non-strategic open space land parcels which are most efficiently and successfully managed via a service delegation agreement, In these cases a fixed term tenancy of 7 years (less 5 days) will be granted given that a lease of this length is exempt from s123 ‘best consideration’ tests. Longer leases would be considered but the costs of legal fees and due diligence could prove prohibitive.

4.3 There is a policy presumption that where an asset is to be transferred this will be offered on the basis of a long-term lease or freehold transfer basis, rather than short lease arrangements. This is in order to maximise local control and provide opportunities for the applicant to consider investment in the asset and/or other funding opportunities.

4.4 This policy does not set out a preference or hierarchy in regard to the choice of freehold or leasehold transfer in order to enable consideration to be given to the best option on a case by case basis as determined by the Asset Transfer Board dependent on the value of the asset.

4.5 Short term lease arrangements may be considered under pilot arrangements; however, it is recognised that they may hinder the applicant in planning and investing in community service without long term certainty.

4.6 In regard to freehold transfers the Council will reserve the right 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 and determined by the Asset Transfer Board, as appropriate, on a case-by-case basis.

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 and provident Societies with an asset lock
• community interest company limited by shares

Criteria B

Organisations can be:

• legal entities
• non-profit making
• 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 so as 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 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 in isolation 

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 An Asset Transfer Board will consider all Asset Transfer Requests for any asset whose value exceeds £15,000 and will oversee the transfer programme.

This Board will comprise the Cabinet Portfolio Holders and senior officers within the Council namely the Corporate Director of Property & Assets, Representatives from Finance & Legal and other appropriate Service Directors as required.

The Board will make recommendations to the relevant decision makers (the Portfolio Holders) on the detail of the transfer agreement terms and sign off.

8.6 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.

8.7 In considering the best terms for an individual asset transfer a recommendation will be made on the appropriate rental or capital subsidy, if required, below market value in order to maximise the use of the asset for community benefit. Rental or 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
• investigate alternative interested parties or uses for the site
• 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 application will be considered by The Asset Transfer Board who will determine if the application passes the Stage 1 assessment, if more than one applicant those that are being shortlisted for consideration and the next step options which are:

• business Plan required before decision
• application rejected

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

11.1 The council wishes to ensure that the transfer is successful as such a business plan will be required where an asset request is of value greater than £15,000

11.2 The council recognises that completing a business plan will take the applicant time and effort and will only ask organisations that meet all of the eligibility criteria

11.3 Where it is agreed to carry out a pilot of a widespread devolution of properties a single business case will be required.

11.4 Where a business plan is required it is anticipated that supporting evidence will also be requested on the following areas:

• health & safety arrangements in place
• safeguarding arrangements
• staffing and/or contractual arrangements
• insurance
• operational procedures and maintenance management
• governance

11.5 All business plans will initially be evaluated by the Property Dept and presented to the Asset Transfer Board who will recommend to the Portfolio Holders, for their determination, 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 to place it on hold for further investigations into other possible options or to reject it.

11.6 The council will consult local member(s) and Community Boards prior to a decision on transfers that require a business plan.

12.1 Dorset Council will determine the basis of legal agreements for the transfer of an asset following either acceptance of the application or the approval of a business plan (where appropriate).

Any such terms and conditions stipulated by the Council will be non-negotiable.

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

12.3 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 & Property.

13.1 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,

13.2 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.

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

14.1 All asset transfers are unique, and it is difficult to provide specific timescales. However, Dorset Council will endeavour to:

14.2 Pre-Application

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

14.3 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) a period of between 8-12 weeks from receipt of an application (note this may vary depending on meeting dates of the Asset Transfer Board and volume of requests received) should be allowed.

If more applications are received than can be processed. 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).

14.4 Stage 2

Allow applicant(s) 6-8 weeks if full business plans are required and make final decisions within 8-12 weeks following submission of Applications or 14-20 weeks if full business plans required (timescales may vary depending on Asset Transfer Board meeting dates and volume of business cases received).

14.5 Stage 3

Work with successful applicant(s) to agree a realistic timetable for final completion of the asset transfer with a target timescale of 12 weeks (dependent on type of transaction and Legal casework).

15.1 The council may wish to undertake ad hoc reviews so as to ensure the Community benefits are being delivered as per the bid submission and to reserve the right for assets to revert if the proposed benefits do not materialise.

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) 

A Business plan may also be required at stage 2 in relation to transfer requests over the value threshold of £15,000 for properties.

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. Process stops or 
2. Assets Available , Asset Value determined to be in excess of £15kapplication within policy-Local Members informed/consulted-process continues for possible determination by Asset Transfer Board

Then 

Asset info released and Application considered

Then 

1. Organisation does not meet criteria. Process stops. or 
2. Organisation meets the minimum criteria – process continues if competition preferred group identified

Stage 2

Application for Asset Transfer considered by Asset Transfer Board and business plan submitted if required. 

1. Application not supported – Asset Transfer not able to be recommend for approval. Process stops or 
2. Application is supported – Asset Transfer is able to be recommend

Stage 3 

Process continues through delegated authorities and Legal Services instructed, then 

Community Asset Transfer complete and handed over to organisation and takes responsibility for Asset

Application form