Local Government and Communities Committee

Meeting date: Wednesday, November 30, 2016

Official Report 630KB pdf

---

Community Empowerment (Scotland) Act 2015 (Parts 2, 3 and 5)

Agenda item 2 is evidence on parts 2, 3 and 5 of the Community Empowerment (Scotland) Act 2015. I welcome Kevin Stewart, the Minister for Local Government and Housing. Good morning, minister, and thank you for coming. I also welcome the Scottish Government officials David Milne, Ian Turner and Jean Waddie, who are from the community planning and empowerment unit. Thank you very much for coming along this morning—it is appreciated.

One of the instruments that we will consider, the draft Asset Transfer Request (Designation of Relevant Authority) (Scotland) Order 2017, is laid under the affirmative procedure, which means that the Parliament must approve it before the provisions come into force. At such sessions, the minister would ordinarily attend to provide evidence in relation to the affirmative instrument. However, given that the committee agreed to consider the suite of community empowerment regulations as a package—there are several of them—we will also ask questions on the negative instruments that will be considered later on the agenda. Following the evidence session, the committee will be invited under the next agenda item to consider a motion to recommend approval of the affirmative instrument. That will be followed by an item asking members to confirm whether they wish to take any further action in relation to the negative instruments. Are we all following that? I hope so.

I know that the minister would like to make some opening remarks.

I am delighted to be here to talk about community empowerment and I am very pleased to be bringing parts 2, 3 and 5 of the Community Empowerment (Scotland) Act 2015 into effect. I have been working with and for communities for some time, from my days working in the community on Aberdeen City Council to my time as convener of this committee’s predecessor and now as minister. This is a very important issue for me. I want our communities to be in control and to have opportunities to shape the decisions that affect them.

The 2015 act marks an important step in that process, and the parts that we are focusing on now are perhaps some of the most significant aspects of it. We want our public services to work more effectively together and with communities, drawing on everyone’s knowledge and abilities to achieve the best possible outcomes in the areas that will make the greatest difference to people’s lives.

Community planning is where all that comes together. The 2015 act sets out a process in which communities and public service providers will come together to decide on their top priorities for their areas and how to address them. That includes planning at a locality level for communities that experience particularly poor outcomes, while of course taking into account the distinctive needs of different communities.

I believe that more local focus is the key to encouraging communities to get involved. Once they are involved with community planning, and once authorities see the benefits of working with community bodies in that context, I am sure that that will help to promote greater participation across all areas of council work.

If communities feel that they are not getting a chance to be involved in decisions about services, they will be able to make a participation request. That is another part of giving communities the confidence that they have the right to be heard and to be taken seriously, and making sure that public authorities also get that message loud and clear.

Asset transfer is a powerful way to support communities to become more sustainable, to improve outcomes and to reduce inequalities. The Scottish Government has supported community ownership for many years; there are many examples around the country of projects that have made a huge difference in their area. Members heard from community stakeholders at an earlier session about the benefits.

However, there are still too many community bodies that are thwarted in trying to take over land or premises that could be providing real benefits to local people. I hope that the legislation in part 5 of the 2015 act will unlock some of those cases. It will make sure that authorities make a decision within a reasonable time and provide a proper explanation for any refusal, which is open to appeal to Scottish ministers.

It is a statutory procedure and inevitably a degree of process is involved. These are public assets and it is right that community bodies have to show that they are ready to take them on and have a realistic, sustainable plan with broad support from the community. Where they can do that, they should be given the opportunity and the support to make a go of it.

Of course, we cannot legislate for behaviour and attitudes. We cannot force people to get on. A culture change is needed to embed community empowerment in all corners of the public sector—it is happening, but it will take time. Legislation is a start; it sends a clear message to public authorities about how we expect them to act and it will give communities the confidence that they have the right to have their proposals taken seriously.

Thank you, minister. We move to questions from members.

Thank you for coming again, minister.

The committee has taken evidence from various people expressing the fear that local authorities could take different approaches to asset transfer and could if so minded—this is my phrase—wriggle out of it under your legislation. How can you ensure a consistency of approach?

One thing that I always do in such cases—and I am sure, convener, that this committee will scrutinise what happens as the 2015 act is rolled out—is to look closely at what is happening across the country. We have fairly good examples of local authorities that already embrace aspects of the 2015 act without its being enforced.

There may be a reticence in some places to go along with all of this. I talked about people and we cannot legislate for people; there may be some folk out there who think that this is not the right thing to do. What we will do is scrutinise closely what is going on across the country. I have talked about the rights of appeal to Scottish ministers if that is required and we will look closely at how many folk have to resort to an appeal process to get what they want. I hope that, like me, the committee will keep a very close eye on scrutiny to see whether any areas need to be tightened up.

I want to look the positive aspects of this. As we see the roll-out, people across the country will be enthused by the provisions. I hope that politicians locally will also be enthused by them. I am sure that we will very quickly see the benefits of people taking control of assets and being involved in shaping services.

I asked a question about this issue last week. We can all see the benefits of community empowerment, but where a community body takes over an asset, there is obviously a risk that it might fail. What do you think would happen if it failed? What would happen to the asset?

We are embarking on a new journey here, but one of the things that has concerned folk in the past is how we treat failure. Without a doubt, there will be cases where things do not succeed. I asked the Accounts Commission in a recent meeting that it and Audit Scotland take cognisance of the fact that this involves new work where people will be taking control of things for the first time, and to take account of that if there is failure.

We have to look at instances where that happens—I hope that there will not be a lot—and see how local authorities and others react to the situation. I hope that we would see a level of co-operation to ensure that folk are supported to the utmost. In that regard, this committee has heard me talking previously about community capacity building—the committee knows that I hate that term, but I cannot think of anything else. I hope that rather than just see failure, we can put in the help that is required to get folks through.

However, where there are failures, we will have to see through the contracts that are drawn up what can be done for the asset if there is a failure. I would expect local authorities and other public bodies to ensure that there is accountability in that regard. I will bring in one of the civil servants here: Jean Waddie.

There is provision in the guidance on how the relevant authorities can protect their investment if things go wrong. There is advice about making provision for whether the asset should come back to the authority that previously owned it and how it might get money back if it has given a discount on the asset.

Can you expand on that? What is that guidance?

The guidance states that it is up to the relevant authority to decide what is appropriate in the circumstances. Obviously, if a community body pays the market value for an asset and the authority does not give the body a discount on the asset, the body is just the same as any other buyer. That means that the asset becomes theirs, but if they fail, the asset gets sold.

Because of the forms of organisation that community bodies have to take on to be eligible to do asset transfer, they have to have provision in their constitution that says what happens to any remaining assets if they fail, after all liabilities are cleared. They might end up having to sell the property to fulfil debts, but something can be put in the contract to say that the property comes back to the organisation that it was bought from if the community body folds. Something could also be put in the contract that says that if the body does not deliver the benefits that were expected and there was a discount, they have to pay back the discount to the relevant authority. A range of measures can be used in different circumstances, as appropriate.

I also point out that the guidance highlights that any arrangements about payback should be proportionate and not restrict the community body’s ability to develop its activities. There is a range of things in the guidance in that regard.

Thank you. Do you want to follow up on any of that, Graham?

No, that will do for now. Thank you.

A number of members have indicated that they want to speak; I want to stick with asset transfer.

Welcome, minister, and thanks for coming along this morning. I have a question about what are inelegantly called ALEOs: arm’s-length external organisations. You have helpfully provided the committee with a letter about them. I understand why those bodies are not included in the act but can be added by ministerial order. I have constituents who are extremely keen to go, on 23 January next year, on assets that are owned by EDI Group, which is wholly owned by CEC Holdings Ltd, which is wholly owned by the City of Edinburgh Council. What would be the procedure to invite you to add a body such as EDI Group to the list of relevant authorities?

10:00  

In my letters to the committee I mention the development of a robust legal definition of ALEO, which Audit Scotland is going to consider. It is important that we get the definition right. Your predecessor committee also wrestled with the issue.

Many assets such as those that we are talking about might be administered by an ALEO but be wholly in the ownership of the local authority. An ALEO’s name being over the door of a building does not mean that the building is not owned by the public body. It is a matter of negotiation between the public body—in the case that Andy Wightman is talking about, the council—and the community organisation, to ascertain whether the asset can be transferred.

The difficulty is that ALEOs come in many legal forms, so developing and securing agreement on a robust and precise legal definition would be a major undertaking. As I said, Audit Scotland will do more work on ALEOs in 2017-18, which we hope will inform developments. I will bring in Jean Waddie to add to what I have said, if you do not mind.

May I clarify something? My question was not about the definition of ALEO—

Hand on a second, Mr Wightman. Does Jean Waddie want to say something?

No.

Okay.

My question was not about a definition of ALEO, but about relevant authorities that meet the criteria in section 78, as EDI Group does. EDI Group is a company that is

“wholly owned by one or more relevant authorities”.

In fact, it is owned by other companies that are wholly owned by the relevant authority, so there is no doubt in my mind that EDI Group meets the statutory criteria in section 78. There is no need for complex definitions.

My question is what would be the process whereby someone—a member of the public, a member of the Scottish Parliament, the City of Edinburgh Council or anyone else—would persuade you to include EDI Group, or any other group that meets the requirements of section 78, in the schedule of the 2015 act.

At the moment, designating individual ALEOs as relevant authorities might not be effective—there would be nothing to stop the local authority creating a new body, for example. Existing definitions of ALEOs include private or community organisations that are mainly funded by a local authority or by companies that are owned by public bodies, including the Scottish ministers.

There is work to be done on the definition of ALEOs—we can come back and look at all that. However, I go back to my original point: in some cases, an ALEO’s name might be over the door of a building, but the building might be wholly owned by the council, and the possibility of asset transfer should not necessarily be limited, as far as I am concerned.

I am aware of that, but I am talking about property in relation to which the title deeds are in the name of a company that meets the definition of “relevant authority”. I do not want to focus on one case, but in the case in my constituency the property is owned by EDI Group, which meets the definition of a relevant authority that ministers could include in the schedule. I am asking what the process is whereby someone who wants a relevant authority to be put in the schedule can invite you to consider doing that and make that case to you. What is the process to which you would respond?

Minister, before you answer that, I have a point on which I think we all want clarity. I thought that the additional powers in secondary legislation that you would have for adding relevant authorities to the schedule would be used in the round. I did not think that only one potential ALEO could be petitioned on; I thought that you would look at ALEOs more generally. Could it be done for one individual ALEO?

We would have to look at ALEOs in the round. I will bring in Jean Waddie to speak on the matter, then I will comment.

The legislation allows for individual bodies to be named. That has to be done through a statutory instrument, as we are doing with Historic Environment Scotland. However, in general, we do not name non-statutory bodies in legislation, because they can just change their names. If we were concerned that a local authority was trying to use an ALEO as a way of avoiding an asset transfer, naming the ALEO in legislation would not prevent the authority from doing that.

That is what I was trying to get across in my previous answer to Mr Wightman. We should allow Audit Scotland to deal with definition and we should consider adding other bodies later.

Okay. Andy—do you want to follow up on that?

Okay. I was referring to relevant bodies that meet the requirements under section 78. I just want to know how the process would be undertaken. Anyway, I will move on with another question.

Is it on asset transfer?

It is not, so I will come back to it.

Right. Does any other member have a question on asset transfer?

We have seen in many local authorities a real appetite and enthusiasm for making asset transfer work. My council—Perth and Kinross Council—has had capacity workers trying to engage people on asset transfer. I have also seen in my council area an ALEO being re-evolved into a different organisation in order to be part of what the Government is trying to achieve.

However, my concern is one that others have touched on, which is that we need to ensure that there is no avoidance of asset transfer. It has already been touched on this morning that there might be attempts by councils to move a body into a new role, to give it a new name or to create a new body, which might provide the council with an avoidance process. What scrutiny and governance will be in place to ensure we could capture any such process that we thought was taking place?

Avoidance of asset transfer would not be particularly beneficial to a local authority. Alexander Stewart will know that there is a right of appeal to Scottish ministers in that regard. We should look at the matter in a positive light rather than concentrating always on the negative. Thus far, and without having all the provisions of the 2015 act commenced, we have already seen some very good work going on across the country. It would be particularly daft if local authority politicians tried to put in place major blockages to prevent people who are capable of doing so from taking over an asset, because folk can see what is happening in other parts of the country.

However, we sometimes get situations whereby illogicality takes place. That is why it is incumbent on all of us to ensure that the 2015 act is working appropriately in every part of the country. I reiterate that one of the provisions that is in place is the ability to appeal to Scottish ministers. That is obviously something of which folk who want to block asset transfer should be somewhat wary. I will bring in Jean Waddie at this point.

I do not have anything to add.

It was just in case I had missed anything.

You seem to have covered it all, because Ms Waddie does not have anything to add. Do you want to come back in on that, Alexander?

I acknowledge what the minister has said, and I believe that there is a real opportunity.

However, I have previously talked about the different experiences of two organisations with regard to asset transfer. One had found it to be very successful and a great opportunity because everything had gone right and it had managed to transfer the asset, so it was a win-win situation for everybody. However, in a very similar situation in another area, the process had gone all wrong. What the groups were trying to achieve was not too different, but one group felt that, miraculously, it had achieved transfer and everything had gone well, whereas the other group was left with a bad taste in the mouth because although it had gone through many hoops, the transfer did not work for it in the end and people were left disappointed. Massive enthusiasm had been created, but people were then disappointed and disillusioned by the whole process because it did not work.

Those things have happened without the provisions being in place. I, too, could give examples of good and bad. Without naming the organisation, in one place a transfer of a piece of land that had been derelict for a long while took more than four years to get legal agreement. That was because there was a little bit of risk aversion and the local authority obviously felt that it had to protect the asset—although I do not know what for, in the circumstances.

The 2015 act gives local authorities the ability and the back-up to proceed with greater speed and it gets rid of the risk aversion that exists in some, but not all, places. We can pick good and bad examples from what has gone on thus far. Some local authorities have made major movement in asset transfer without the legislation being in place, but others have not. The legislation will, I hope, allow local authorities to get on with the job so that people have positive experiences rather than the negative experiences that have happened because of risk aversion.

We have heard that, when there is a request for transfer of an asset that a public body has sat on and done nothing with for a long time, the body might suddenly move to dispose of it. It has been suggested that at a certain point in the process assets should be frozen to prevent public bodies from doing that. What is your response to the call for that to be brought into the legislation?

If I remember the Official Report of that meeting correctly, the suggestion was raised with the committee by Ian Cooke from the Development Trusts Association Scotland, who said that the guidance should be more robust in that regard, because community bodies must put in a lot of effort to prepare business cases for properties that could be sold, in the meantime. That is not really a matter for guidance or the regulations; it is set out in section 92 of the act: submission of a formal request is the only clear starting point that is available in terms of the legislation. The approach that has been suggested is similar to that in the community right to buy, under which when a community body registers an interest in land, the owner cannot sell it to anyone else until a decision has been made on the community’s proposals.

You are content that the balance is right in the act, in that respect.

I think that the balance is right.

We heard from Bruce Kiloh of Strathclyde partnership for transport that SPT and other public bodies might have a land bank or assets that form part of their future strategic interests, which might be a reason to turn down or refuse an otherwise reasonable request for an asset transfer. Is there anything in the legislation or guidance to say how long something can sit in a local development plan while nothing happens with it? Land could be designated for an airport rail link, a tram or housing but sit fallow for 10, 15, 20 or 30 years. If a community wishes to access it, at what point would it be reasonable to say to the body, “That might be your aspiration, but it’s been your aspiration for the past 20 years and the community now wishes to access the land”? Should there be such a limit on that strategic approach? Perhaps such examples are bad, but we could imagine a public body citing a strategic reason for not giving land, rather than just blocking a community. I am not saying that SPT was suggesting that, but that could be a downside to that approach.

10:15  

On assets being set aside for strategic reasons, we all know that some major developments take a fair while to come to fruition, so that would be a good reason for saying that we cannot allow a transfer. Common sense has to be applied in such cases: a rail line might take 10 or 20 years. Some major projects that have taken place, or are taking place now, have taken a fair while—decades, perhaps—to proceed. It is incumbent on local authorities and other public bodies to consider the need to deliver the project and whether, when an asset transfer is requested, it would be fair and justifiable to refuse it.

Some assets will be needed for the long term. There is excellent guidance on what is known as “meanwhile use”. An authority can say that it knows that it needs to keep the land, but will not do anything with it in the next five years, so it can allow temporary use—for community gardening, for example. Things can be done so that land does not just lie there looking ugly for all that time. I have forgotten the organisation that produces the guidance, but it is excellent guidance.

Thank you. We will move on from asset transfer.

I would like to hear your thoughts on participation requests. The evidence that we have taken from organisations has all been pretty positive. You mentioned that good work is already being done. One of the concerns about the participation request aspect was the impact that it might have on already good relationships that public bodies have with their communities if they are formalised. I would like to hear your thoughts on that.

If there are already good relationships between bodies and public authorities, there is probably very little need for those community organisations to use participation requests. We can already see across the country local authorities that are taking cognisance of communities’ views when it comes to the shaping of services. In places that are already carrying out all that work, it would be rare for participation requests to be used. The likelihood is that participation requests would be made where the relationships are not so good and communities and community groups think that they are being ignored by the public body when it comes to the shaping of services.

Sometimes our hopes become reality and sometimes they do not, but my hope is that there is not great use of participation requests. I hope that the legislation will change the attitude of public bodies to ensure that the level of consultation and engagement with communities and community groups at the beginning of shaping a service gets rid of the requirement for use of participation requests. We already see some very good engagement and I hope that it continues. I hope that we do not see a huge number of participation requests. I do not foresee tensions being created because of the new legislation when there are already good relationships and communities are already fully involved in shaping services.

How do we educate everyone about that? What can the Scottish Government do to ensure that people know that participation requests are a sort of fallback position and that they are not the standard way that we want communities to engage?

Just as a wee follow-up question, do you think that the participation request process might be helpful where there is conflict in communities about how a service should be delivered? It could perhaps be used to resolve a situation in which there are two different communities of interest or when an issue stretches across localities.

I will probably bore the committee by saying something that I say regularly. I am extremely keen to ensure that best practice is exported right across Scotland. There are many bodies involved in this sphere—DTAS for example—that can help us to get the message across about where good practice is taking place and can try to persuade and cajole others to follow suit.

Where there are conflicting views in communities about the way forward or how a service should be delivered, rather than relying on participation requests—which in such circumstances may cause some difficulty—my first objective, if I represented those communities, would be to get people representing different opinions around the table to see whether there is any common ground. Where there is common ground, I would first look at what could be done to move forward on that. I would then try to work through the individual bits and pieces of conflict.

Thank you. That is helpful.

Before the end of this evidence session, we will come back and mop up some final questions on asset transfer. However, let us now look at some other themes.

I have a brief question in relation to the act rather than the statutory instrument. Do you have any plans to bring part 8, on common good registers, into force soon? Do you have a timetable for that?

I ask Jean Waddie to take that.

Work is going on to develop the guidance that is needed to bring that into force. I do not know of a date at the moment.

I say to Mr Wightman that I will look closely at that issue and write back to the committee. The committee is probably well aware that, during the scrutiny of the bill, I took a keen interest in the common good aspects of the bill because of difficulties that I faced in my past in determining whether land was held in the common good fund in Aberdeen. We are moving forward in that regard, and I will write to the committee with more detail on timescales.

I apologise for arriving late. I am suffering from a bit of flu this morning, I am afraid. I ask my colleagues not to get too close.

I can see that they are being supportive of you, Mr Gibson.

Indeed—I like the way that they all leaped away.

Asset transfer is very desirable when a community is in favour of it, and I think that we would all like to remove as many of the barriers as possible that prevent that from happening. However, I want to ask about the converse situation. In North Ayrshire a few years ago communities were told, in effect, that they would have to take over community assets or the assets would simply be closed due to the removal of local authority funding. There was a bit of an outcry about that and, in the end, the asset transfer did not take place. There was a lot of anxiety in communities, though. Not every community wants to run an asset. A lot of people are quite happy to volunteer in a local community facility but they do not necessarily want to have to go through all the hassle of insuring and maintaining it and so on.

How do we ensure that while the act allows communities who want to take over assets to do so, it is not used as an excuse by public bodies to, in effect, dump—for want of a better word—unwanted assets onto community organisations that might not have the capacity or the desire to take over and run those assets?

I would be very unhappy if anyone was to use the act to try to foist assets onto communities—very unhappy indeed. The act is designed to allow those folks who want to take on those assets to do so.

It may well be that in the future, many communities that, at the moment, do not feel that they can take on assets will gain the necessary capacity and will move to do so, but I would be extremely annoyed if the act was used by any public body to try to foist assets onto communities that did not want to take control of those assets.

Thank you very much for that. Would there be any redress from the Scottish Government for communities in such a situation? A public body might just say, “This asset is costing us £X a year, so we will just tell the community that we are closing it and it will take it over,” which would basically be putting a shotgun to the heads of local community organisations. That is my worry.

Local authorities will always have the ability to consider issues around their estates and the assets that they have. It may well be that a local authority will choose to close an asset. We know that that happens fairly regularly, sometimes with the approval of the community and sometimes without it. However, I would not want a situation such as the one that Mr Gibson describes, with a local authority putting a gun to somebody’s head and saying, “Take it over or it will close”.

If a local authority chooses to close or dispose of an asset, there should be consultation with the community about that. There should be engagement about closure. Alternatives should be suggested to communities about where services that may be delivered in those buildings could be moved to. The act is about empowering communities, not about foisting assets onto people.

Mr Gibson has started a really good line of questioning. In my constituency, a local community centre in Cadder that was run by Glasgow Life, which is an ALEO, was closed. However, through work with the local authority, the land was transferred to a local housing association and there is now a new community centre there, which has been very successful. The housing association got £1.2 million of Scottish Government money to help to fund that.

That asset was a rundown liability for the ALEO. It cost a significant amount of cash to staff it and to repair it, and a cash saving was made by closing it. To follow on from Mr Gibson’s line of questioning, is there any guidance within the act or the statutory instruments on whether, when community groups—in this case, a housing association, to be fair—take on such an asset, the asset should come with a dowry, because there will be a significant financial saving to a public body or a local authority, as well as a cash receipt?

There is nothing specific in the guidance about that. There is not a great deal of specific advice on what should be done in relation to funding because the authority might be looking to use the money that it saves to invest in services somewhere else. Certainly, if the authority is getting a benefit from giving the asset to the community, it is always a good thing for it to support the community in some way if it can—with cash or by making a contract for services—to make a success of that asset.

10:30  

Beyond that, it is up to each public body to look at what takes place as part of the transfer. Further, as is the case in the example that you gave, convener, the transfer of the asset can open up the opportunity for the community to tap into other pots of funding. We have seen that a fair bit already, even prior to the 2015 act being in place. In the situation that you described, it sounds like the community managed to access funding from the Scottish Government. I am not aware of that example, but we all know of examples of situations in which funding that would not necessarily have been available to the local authority, such as funding from the lottery or other organisations or trusts, has come into play when a transfer has taken place.

That is helpful. I was merely pointing out a success story that featured all the partners getting together, because I wondered whether there was any guidance around that.

Members have no additional questions, so I thank the minister for his evidence.