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

10. Calculating Best Value

10.1 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.

10.2 In making a case for the transfer of an asset, the Seven Best Value Themes will be evident, to a greater or lesser extent, in the community transfer body and the related benefits that will result in pursuing positive outcomes for a more prosperous and fairer Scotland. The Seven Best Value Themes (highlighted in section 13.3 of statutory guidance for relevant authorities) which relevant authorities must consider are:

• 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.

10.3 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 are likely 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 Community Empowerment (Scotland) Act 2015 (Part 1: National Outcomes).

10.4 It is recognised that measuring the value derived from community activity is not straightforward, especially for qualitative outcomes which may only be apparent in the long term, or cannot be directly attributed to one particular intervention. A number of methodologies have been developed for measuring social impact, including Social Return on Investment, Social Audit and others. They can sometimes be complicated and too onerous to be justified in relation to many community projects, and also all include a degree of subjective judgement at some level, and communities and public authorities may not agree on the value placed on different elements.

10.5 Best value does not always need to make the most difference for the largest number of people. There may be situations where the interests of smaller groups need to be prioritised, even if this generates a lower return on investment. Best value can be demonstrated in many ways including by the difference it makes to a community rather than solely by a simple economic return.

10.6 Methodologies including social return on investment tools can however be a good source of measuring social impact, however it is worth noting that community transfer bodies are also required to forecast their social impact. This can be difficult for groups to do, given their initiative has not yet started and are therefore unable to use many of these tools themselves.

10.7 To assess the asset transfer request relevant authorities should consider evidence provided based on matters including:

i. Value to relevant authority in existing use:

• feasibility and cost of relocation of services elsewhere
• potential revenue savings arising from transfer

National Outcome: Economy: We have a globally competitive, entrepreneurial, inclusive and sustainable economy

ii. Value for alternative use/redevelopment

National Outcome: Economy: We have a globally competitive, entrepreneurial, inclusive and sustainable economy

National Outcome: Communities: We live in communities that are inclusive, empowered, resilient and safe

National Outcome: Culture: We are creative and our vibrant and diverse cultures are expressed and enjoyed widely

iii. Value for proposed and other community purposes

National Outcome: Communities: We live in communities that are inclusive, empowered, resilient and safe

National Outcome: Culture: We are creative and our vibrant and diverse cultures are expressed and enjoyed widely

National Outcome: Health: We are healthy and active

iv. 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

National Outcome: Communities: We live in communities that are inclusive, empowered, resilient and safe

National Outcome: Culture: We are creative and our vibrant and diverse cultures are expressed and enjoyed widely

National Outcome: Health: We are healthy and active

National Outcome: Education: We are well educated, skilled and able to contribute to society

National Outcome: Poverty: We tackle poverty by sharing opportunities, wealth and power more equally

v. 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

National Outcome: Economy: We have a globally competitive, entrepreneurial, inclusive and sustainable economy

vi. Impact of project failure:

• to surrounding local environment
• to reputation of the parties
• to the service users
• to relevant authority's objectives

National Outcome: Economy: We have a globally competitive, entrepreneurial, inclusive and sustainable economy

National Outcome: Communities: We live in communities that are inclusive, empowered, resilient and safe

National Outcome: Culture: We are creative and our vibrant and diverse cultures are expressed and enjoyed widely

National Outcome: Poverty: We tackle poverty by sharing opportunities, wealth and power more equally

10.8 Following a detailed review and assessment of the information provided in an asset transfer request, a recommendation can then be made on the strength of the case to the relevant accountable officer. Further guidance on assessing Best Value can be found in chapter 13 of the Scottish Government statutory guidance for relevant authorities: Scottish Government Statutory Guidance Chapter 13