Options appraisal

In carrying out an options appraisal, it should be borne in mind that an asset transfer request must be agreed to unless there are reasonable grounds for refusal - so retention of the property may not be an option, unless perhaps as landlord.  

Previously an options appraisal for the future use of the asset was a useful tool, covering both retention of the property by the relevant authority and disposal to the community organisation at less than best consideration, in order to identify the current and likely on-going costs and benefits associated with each option.  For example, if the property was retained, it would involve the costs of maintenance, security and/or demolition as well as the potential  lost opportunity enabling new or maintaining existing services in the community. With regard to asset transfer, costs to the local authority might include the potential loss of capital receipt or of market rent (where this is realistic).

A way to demonstrate resources are being put to good use is to demonstrate Best Value. Best Value is the requirement to make arrangements to secure continuous improvement in performance whilst maintaining an appropriate balance between effectiveness and economy. It also requires due regard to equal opportunities requirements, and to contribute to the achievement of sustainable development.
There are seven Best Value themes  within the Act and public bodies across Scotland have a duty to secure Best Value for public money and can sell, or lease, at less than market value where there are wider public benefits to be gained from a transaction. In making a case for the transfer of an asset, the Best Value themes will be evident, to a greater or lesser extent, in the community transfer body and the related benefits that will accrue in pursuing positive outcomes for a more prosperous and fairer Scotland. The matters which the relevant authority must consider include the following types of benefit:
  • Economic development
  • Regeneration
  • 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.
Asset transfer at less than market value is justified when these additional benefits empower communities and align with local and national priorities to enable the delivery of Best Value across the public sector as a whole. Such benefits arelikely to align with one or more of the Scottish Government‘s National Outcomes, which all Scottish public authorities are required to have regard to in carrying out their functions (under Part 1 of the Act). They may also contribute to the relevant authority‘s policy objectives or local priorities determined through Community Planning, but the value of benefits should be judged on a broad basis, not only in relation to the particular authority to which the request is made.
In identifying the benefits of the proposed asset transfer, consideration could also be given to the following:
  1. The contribution it will make to the local authority’s corporate objectives / strategies and the purposes set out in the ‘Disposal of Land by Local Authorities (Scotland) Regulations 2010’ (ie economic development or regeneration,  health,  social or environmental well-being) and the Community Empowerment (Scotland) Act 2015.
  2. Direct savings to the local authority arising from the transfer (as above)
  3. Further benefits to the local authority and its community partners, for example enhanced or complementary service delivery
  4. Contribution to community empowerment and increasing the capacity of local community groups.

In most cases, placing a monetary value on the above benefits (other than point 2) is unlikely to be cost effective. See the Evaluating benefits section.