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
- The resources available to commission appropriate monetisation studies.
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.