Asset Transfer- from the inside

January 11, 2015

An article about Asset Transfer from one of Can Do Communities Co Founders.

Asset Transfer- from the inside.

I am Marvin Symes co-founder & director of social enterprise Can Do Communities. We assist charities & community groups across England with support for their organisations or projects. In recent times because of the challenging economic conditions Local Authorities have needed to cut their costs, one of the ways they have done this is by transferring Community Buildings into Community Ownership at less than market value this is known as Asset Transfer. Of course the ‘real’ reason for an asset transfer is not even better use of a public building (although this often happens) it is primarily the Community Ownership bit, IE without certain restraints that the LA might have -people living in their community know it best and can tap into all kinds of resources that an LA cannot.

The Organisation that I help run has a team of people from Business Planners, Surveyors, Community Solicitors, Governance specialists etc., that run around  the country advising people about asset transfer and what makes a sustainable community group or community building. Two years ago we were asked by Peterborough City Council to consider taking on one of their former play community centres, now this was an interesting proposal, we have been advising on Asset Transfer but had never physically been through the process of exploring  ownership of a building ourselves as an organisation.

Fast forward 18 months and we have experienced first-hand what ‘our groups’ have experienced, trying to navigate through an asset Transfer ‘exploration’ ,and it’s important to note that it should be an ‘exploration’ not a quick and dirty deal because taking on a building on a peppercorn just  seemed attractive at the time. First thing to say is that myself and other fellow co-founder probably ended up spending half of our working week for 18 months  running the community centre. We tried to put the place on a solid footing realising that we needed to bring in £27,000 just to keep the place running per annum. We luckily found 2 core tenants to occupy parts of the building- a family gymnastics club and a start-up day nursery. The income from these 2 organisations should have covered the running costs, but then unexpected things happen like; tenants don’t pay on time, the heating stops working, there’s a guy wandering round on site without permission amongst the nursery children!, and I’m not making this up there are birds nesting in the gymnastics hall roof making a mess and because of nesting regulations – you can’t move them for 3 months!

I haven’t even mentioned the daily phone calls and emails made to the Council about this and that, all the time our core business needed our time and running the centre kept dragging us away, all of this work for the centre was on a voluntary basis. Two years on and we hope we have the left the building in good shape and a new organisation has taken over the management of the centre.

There is a very long list of things to consider when exploring Asset Transfer, here are just a few; Get a Building Survey early on to see the state of the building, Obtain the running costs from the LA asap, ideally obtain a grant to carry out every part of a pre-feasibility check on the necessary due diligence for asset transfer, construct a robust  Business Plan asap (this is the major task that the LA will want to see carried out), make sure your organisation is fit for purpose IE governance etc., ensure you have a good community solicitor in your corner when negotiating a lease or freehold, if you have core tenants then make sure proper contracts around tenancy arrangements are properly drawn up and agreed, ensure you have a good contact at the Local Authority that leads on asset transfer and stick with them as a single point of contact.

Make sure the community around the building have been consulted; listen and provide the stuff that they need! – Most of all think Business, community Business.

More information around the support that Can Do Communities can provide around Asset Transfer can be found at www.candommunitites.co.uk or by calling the helpdesk on 01733 200906