While arriving at a formal property valuation is solely the province of the appointed valuer, evaluation of the wider benefits (and costs) of the proposed disposal on the other hand will require a corporate approach. This may also be helped by consultation with external stakeholders with an interest in the objectives of, and anticipated outcomes from, the disposal.
Experience to date shows that it is often not practicable to establish the monetary value of many of the wider benefits likely to arise from disposals at less than best consideration. While practitioners of methodologies such as Social Return on Investment (SROI) and LM3 (Local Multiplier 3) have argued that the monetary value of most kinds of social or economic benefit can be arrived at, in many cases the costs of commissioning such studies (whether borne by the relevant authority or community organisation) are unlikely to be justifiable in comparison to the likely value of the benefits. This is particularly true when a community group will be taking on a facility and developing new services.
Therefore, a proportionate approach is recommended based on:
- The estimated significance of the benefit(s) in question.
- The value of the discount being proposed.
Section 13 of the Relevant Authority guidance for the Community Empowerment (Scotland) Act 2015 explains how assessment should be made and on what criteria.
The key is being able to identify anticipated benefits and describe them as being ‘more than’ or ‘less than’ the costs or benefits associated with any alternative for the asset, such as retention or disposal on the open market.
Types of benefit
- Economic development
- Public health
- Social wellbeing
- Environmental wellbeing
- Reducing inequalities of outcome from socio-economic disadvantage
- Any other benefits that might arise through the alternative use of the asset.
Reviewing Asset Transfer Requests
- Feasibility and cost of relocation of services elsewhere
- Potential revenue savings arising from transfer
b) Value for alternative use/redevelopment
c) Value for proposed and other community purposes
d) Level of community benefits
- Extent of community served
- Nature of benefits to be delivered
- Links to relevant authority's corporate priorities and outcomes
- Community need/demand for the services
e) Likelihood that benefits will be delivered over a 5-year period
- Strength of organisation
- Sustainability of business plan/project
- Sources and level of funding support
f) Impact of project failure
- To surrounding local environment
- To reputation of the parties
- To the service users/relevant authority's objectives
The Scottish Government guidance for relevant authorities, section 13 provides further details on asessing asset transfer requests.
Most Relevant Authorities use a scoring Matrix to assess and determine Asset Transfer Requests. Please get in touch with COSS as we can share good practice examples of assessment matrices.