Charities must raise their game to prepare for asset transfers, says David Alcock, senior associate, community regeneration, at Anthony Collins Solicitors LLP
A significant squeeze on public sector funding inevitably means that costs must be reduced, and some local authorities are considering the wholesale transfer of community facilities to third sector providers.
The London Borough of Islington has been considering transferring 42 community centres to a new bespoke organisation, and others are likely to follow; this will result in the consolidation of public sector assets.
This consolidation will provide an unparalleled opportunity for community and third sector organisations in England and Wales to help the government achieve policy outcomes and lower public sector costs. But seizing the opportunity requires imagination, flexibility and an adaptable range of models for practical delivery.
Many community organisations are simply not ready to handle the process of transfer, so the public sector's temptation will be to continue to transfer to the highest bidder or the most convenient provider. But such an approach would fail to use enormous untapped potential.
There is often no appropriate organisation in which to hold key community assets for the long term. When this is the case, one model would be to set up an interim transfer body as an independently constituted third sector body, with a tailored governance structure, to receive the assets. This would hold the assets until the community infrastructure was ready for the transfer of properties to individual organisations.
This mirrors the approach taken by some local authorities to their community facilities, but with important differences: the interim transfer body would take a built-in, staged approach towards the explicit aim of long-term transfer to community organisations. There would be a deliberate focus on developing community capacity, and an open and transparent approach to the long-term transfer.
This is one of a range of models that could be developed in response to the new context. It could serve as a pilot to test the Conservatives' proposals for the 'community right to request', a plan to give communities more of a say in local authority decisions. Through it, a series of options could also be developed to support the Total Place initiative - the government's 'whole area' approach to public services.
Innovative partnerships between third and private sector providers that blur the unhelpful distinctions between social enterprises and the private sector could also provide new and flexible models.
For example, one organisation that is reviewing the relationship between its head office and a local business park is considering setting up an innovative partnership between a third sector provider and a private sector organisation experienced in premises management.
If constituted as a community interest company limited by shares, this would create an efficient and effective vehicle for community involvement in the ownership and management of a range of assets far beyond the relatively cautious approach seen to date.
To achieve this change, the public sector must explicitly recognise, at policy level, that the consolidation of assets should achieve a broad range of outcomes beneficial to communities as well as long-term cost savings.
We will have to see detailed development of a range of models to enable the possibilities described above, and this will have implications for managing procurement and for state aid.
We need to see imaginative discussions between policy makers and the third sector to encourage and enable community organisations and other social enterprises to raise their game in response to these changes. There will be no better moment than this to prepare to achieve these aims.