A robust assessment of the risks, their implications and likelihood of becoming a reality can only be carried out through close discussion with the community organisation that is seeking to take on the asset alongside a rational and thorough analysis of the business case. However, it should be acknowledged that risk is inherent in all forms of enterprise, and the existence of risk in itself is rarely a good reason to avoid community asset transfer. Only where risks are significant (in impact and likelihood of occurring) should the local authority consider conditions that restrict use or enable the ‘clawback’ of value.
Community empowerment needs to be the fundamental aim behind asset transfer (see Scottish Government & COSLA Community Empowerment Action Plan, 2009), which also fits clearly with the wellbeing powers granted to Local Authorities under the Local Government in Scotland Act 2003.
Section 14 of the Guidance Notes on Asset Transfer Requests outlines the use of conditions to protect the discount. "In the case of asset transfer to community bodies, disposal at less than market value, or with other support or concessions, may be justified by reference to the expected benefits to be delivered by the project. In that situation, relevant authorities sometimes seek to protect themselves against the risk that the benefits may not be delivered by including clauses in the contract requiring some form of restitution if the project fails."
