Councils 'not using asset transfer laws'

By David Ainsworth, Third Sector, 20 August 2008

Local councils should be given better incentives to transfer assets to community groups, according to one of the third sector's largest property owners.

Andrew Croft, head of charity office space provider Can Mezzanine, said councils were not using community asset transfer laws, which allow them to sell property cheaply to the third sector, because they were worried about losing revenue.

Croft said charities should make deals that allowed councils to retain some profits from future sales.

"We spoke to councils across London when the Government introduced the laws, but no one was interested," said Croft. "I think they were worried about conserving their assets.

"Charities must recognise that we can't expect councils to give something away for nothing - we should be able to reach an arrangement that benefits everyone. Councils should be happy to have an asset work for their community in the short term, and still have the chance to make money from it in the long term."

Richard Stokoe, head of news at the Local Government Association, agreed that councils were reluctant to transfer assets. He pointed out that councils were open to accusations of negligence and favouritism whenever they sold buildings at less than market value.

But Stokoe also warned that Croft's proposal might fall foul of the bureaucracy surrounding council activities, especially state aid rules, and suggested instead that charities should ask to pay peppercorn rents on underused buildings.

"Councils might be happier to transfer the running of a building to a charity if they retained ownership," he said.

New users register here FREE for full access