To ask the Scottish Executive whether its rules and guidance allow and encourage local authorities to be flexible when selling surplus assets to local community organisations by charging less than market value, when such sales are considered to benefit the community as a whole.
Under Section 1(1) of the LocalGovernment (Scotland) Act 2003, local authorities are required to demonstrate“Best Value” in local government service provision by making the best use of publicresources, including land and property - keeping a considered and appropriate balancebetween cost, quality and price.
Any local authority wishing todispose of surplus asset(s) for a consideration less than the best that can reasonablybe obtained on the market, must also apply for ministerial consent under Section74(2) of the Local Government (Scotland) Act 1973 as currently in force. Under currentguidance Section 74(2) guidance, consent will generally be given to a local authorityto sell surplus assets to local community organisations where one of more of thefollowing criteria have been met:
the intending buyer or lessee is performinga charitable or public service function to the benefit of the local community, andthe local authority can show that the organisation or activity thus supported isconsistent with public benefit and that the intending buyer or lessee is unableto afford the asset at its current valuation.
the intending buyeror lessee would be using the asset to promote economic development or regenerationwithin the council’s boundaries, such that the local authority can demonstrate abusiness case for the asset transfer at the discounted value.
the intending buyeror lessee is a public sector or voluntary body which intends to use the asset forpublic purpose, and the local authority can show that the activities thereby supportedare consistent with the authority’s published policy objectives.
the local authoritycan demonstrate that the overall cost to the authority of the transfer is outweighedby consequent savings to the council in pursuing a published policy objective.
thevalue of the asset is low, such that the income forfeited by the transfer is lessthan the cost of maintaining the asset, and transfer is to be at nominal value withthe purchaser paying the local authority’s legal expenses and costs of transfer.
Section11 of the Local Government in Scotland Act 2003 has yet to be brought into force,but will amend section 74(2) of the 1973 act. Section 11 provides for local authoritiesto dispose of land for less than full value without seeking the prior consent ofScottish ministers, subject to a threshold amount being set in regulations.
The Executive has consulted ondraft regulations and is currently considering comments received.