Community Empowerment (Scotland) Act 2015 - asset transfers: social value guidance

1. Introduction

1.1 Ownership or control of land and buildings is a powerful tool for communities to drive change and achieve their own goals. In the first place it provides a base for activities and services that might not otherwise be accessible to members of a particular community, and can provide jobs, training and bring income to the local area. More widely, it can provide stability and sustainability for the community organisation, allowing them to develop new initiatives and support other developing groups, and it can create a stronger sense of community identity, cohesion and involvement.

1.2 The Community Empowerment (Scotland) Act 2015 introduced a right for community bodies to make requests to all local authorities, Scottish Ministers and a wide-ranging list of public bodies, for any land or buildings they feel they could make better use of. Community bodies can request ownership, lease or other rights, as they wish. The Act requires those public authorities to assess requests transparently against a specified list of criteria, and to agree the request unless there are reasonable grounds for refusal.

1.3 The Community Empowerment (Scotland) Act 2015 does not say how much should be paid to purchase an asset using asset transfer legislation, whether it should be at market value or at a discount. In submitting an asset transfer request, the community transfer body has to state how much they are prepared to pay, alongside the benefits the project will deliver, and the relevant authority has to decide whether to accept that price. This can be challenging for both the community transfer body, and also the relevant authority. Relevant authorities must consider social value as part of their overall asset transfer request assessment, including when considering the price offered.

1.4 The Scottish Government is unable to direct relevant authorities to a specific approach, tool, or technique to use when considering social value in the asset transfer context, however it is widely understood that these decisions can be difficult to make. This has also been acknowledged by Audit Scotland, who have carried out their own work on community empowerment, and along with other scrutiny bodies produced a Principles for community empowerment document (published July 2019) which although aimed at scrutiny bodies also provides relevant authorities with a shared framework of what good community empowerment looks like.

1.5 There is no requirement to obtain a valuation for the purposes of the Act, however, both the relevant authority and the community transfer body are likely to need to understand the "market value" of the asset, for accounting, borrowing or funding purposes, and to ensure transparency about the amount of any reduction from market value.

1.6 The question of calculating social value has been raised regularly over the years, and in the asset transfer context has been identified through a number of sources including the Glasgow Caledonian University Three Year Evaluation Report on asset transfer activity in Scotland; the findings of the Scottish Parliament Local Government and Communities Committee Report: Community Empowerment: Taking Stock of Participation Requests and Asset Transfers Four Years On ; and an evident theme of the sessions of the National Asset Transfer Action Group.