To ask the Scottish Executive whether local authorities are permitted to charge peppercorn rents to voluntary organisations and, if so, under what circumstances and what legislation regulates the conditions under which this may be done.
Under Section 74(2) of the LocalGovernment (Scotland) Act 1973 as currently in force, local authorities requireministerial consent to dispose of any land for a consideration that is less thanthe best that can reasonably be obtained on the market. Under current guidance,consent will generally be given to local authorities to charge low rents to voluntaryorganisations, where one or more of the following criteria have been met:
the intending buyer or lesseeis performing a charitable or public service function to the benefit of the localcommunity, and the local authority can show that the organisation or activity thussupported is consistent with public benefit and that the intending buyer or lesseeis unable to afford the asset at its current valuation.
the intending buyer or lesseewould be using the asset to promote economic development or regeneration withinthe council’s boundaries, such that the local authority can demonstrate a businesscase for the asset transfer at the discounted value.
the intending buyer or lesseeis a public sector or voluntary body which intends to use the asset for public purpose,and the local authority can show that the activities thereby supported are consistentwith the authority’s published policy objectives.
the local authority can demonstratethat the overall cost to the authority of the transfer is outweighed by consequentsavings to the council in pursuing a published policy objective.
the value of the asset is low,such that the income forfeited by the transfer is less than the cost of maintainingthe asset, and transfer is to be at nominal value with the purchaser paying thelocal authority’s legal expenses and costs of transfer.
Section 11 of the Local Governmentin Scotland Act 2003 has yet to be brought into force, but will amend section 74(2)of the 1973 act. The Executive has consulted on proposed new regulations under thisprovision. In general terms, these regulations would allow local authority disposalof land for a consideration less than the best that can reasonably be obtained forsmall value landholdings, and for disposals where the difference between the bestconsideration that can reasonably be obtained, and the proposed consideration, isless than a marginal amount to be stated in the regulations. They would also allowthe Scottish ministers to specify further circumstances and procedures by whicha local authority may dispose of land for a consideration less than the best thatcan be reasonably obtained.