The Scrutiny Inquiry Panel - Community Assets met on Monday 11 March 2024 to discuss community asset transfers, focusing on due diligence, risks, barriers, guidance, and support. The panel also agreed to reschedule a future meeting.

Community Asset Transfer - Due Diligence, Risks, Barriers, Guidance and Support

The panel received a report and heard from Councillor David Hopkins, Cabinet Member for Corporate Services and Performance, and Geoff Bacon, Head of Property Services, regarding the process of Community Asset Transfer (CAT). The discussion highlighted that by the time proposals reach the property and legal teams, much of the consultation and groundwork has already been completed by the applicant groups.

A key theme throughout the discussion was the need for increased resources to support organisations making CAT proposals. Geoff Bacon emphasised that while the transactional property aspects of CATs are straightforward, the support and guidance required for organisations to become properly constituted, financially sustainable, and to understand their rights, responsibilities, and risks are crucial. He noted that the council generally reacts to expressions of interest rather than proactively seeking them, as this approach filters groups with genuine commitment.

Concerns were raised about the difficulty of achieving inclusive engagement with entire communities, with the understanding that not everyone will be satisfied with a proposal. The process involves Integrated Impact Assessments and Cabinet reporting, with input from advocate services.

Risks associated with CATs include disputes within or between groups, and the potential failure of a group, which could lead to the surrender or forfeiture of a leasehold interest. Mediation between groups with differing aims can also be a complex process.

Councillor Chris Holley OBE asked about the requirement for Welsh Government approval for leases under seven years, and was informed that under the General Disposal Consent Order, such approval is not needed.

Further questions from Councillor Holley focused on the process of verifying information in expressions of interest and how to improve the CAT process. Geoff Bacon explained that the verification of information and consultation processes would be handled by the advocate service. He also touched upon the valuation of assets, stating that his team of charter surveyors would provide an indication of value based on open market value, and if necessary, the district valuer would be consulted.

Jamie Rewbridge, Strategic Manager for Leisure Partnerships, offered support and advice on the expression of interest (EOI) process. He explained that the formal EOI process, implemented with the new CAT policy, has been tested primarily within cultural services. He described the EOI as a robust mechanism for assessing the seriousness of applications, followed by dialogue, and potentially a business plan as a further test of robustness.

The issue of competing interests from different organisations for the same land was discussed, with the assurance that all interested groups would be involved in the process, as CAT is ultimately for the benefit of the community.

Councillor Will Thomas raised concerns about the lack of clarity and updates during the asset transfer process, suggesting a need for a log to track progress. Councillor David Hopkins acknowledged the frustration but explained that the process is lengthy due to the involvement of multiple parties and the demands on the legal team, emphasizing the need for due diligence to protect public land.

Geoff Bacon elaborated on the complexities that can arise during the legal stages, particularly concerning public liability insurance, building maintenance, and the transfer of budgets. He stressed the importance of trust between the group and the council, and the need for independent advice for organisations taking on assets.

Councillor Wendy Fitzgerald shared examples from Pennsylvania where community councils and volunteer groups successfully manage assets like village halls and sports fields, illustrating that communities can operate assets successfully, though it requires hard work and can be challenging.

Councillor Robert Francis Davies provided a cautionary tale about the Patti Pavilion, highlighting the significant responsibilities and potential liabilities for trustees of charities, even more so than directors of limited companies. He stressed the importance of a robust business case, a skilled committee, and seeking independent legal advice.

Councillor Geoffrey (likely referring to Councillor Chris Holley OBE) inquired about how the council measures the sustainability of a CAT application and whether there is ongoing support. Geoff Bacon stated that it is largely a matter of trust and faith, and that while the council assesses the potential liabilities and ambition of a business case, being overly robust could deter many applications. He noted that if a CAT fails, the asset reverts to the council. He also mentioned that while initial works might require landlord's consent, regular check-ins on all leased properties are not feasible due to resource limitations and the sheer number of leasehold interests.

Finally, the panel agreed to cancel the meeting scheduled for 25 March and move those agenda items to the meeting on 22 April 2024.