Community Empowerment (Scotland) Act 2015 - part 5 asset transfer: findings report review

4. Findings

4.1 Is Part 5 of the Community Empowerment (Scotland) Act 2015 being implemented as intended by Relevant Authorities?

4.1.1 Introduction

The 2021-2022 and 2022-2023 annual reporting templates included four questions that asked Relevant Authorities about their experiences of asset transfers. A total of 70 responses were received over the two years, 38 in 2021-2022 and 32 in 2022-2023. Nineteen of the Relevant Authorities reported in both years and the total number that reported at least once was 47. Of those 47, 20 were Local Authorities, seven NHS Boards, six education providers, five transport partnerships, and nine organisations that are individually named on Schedule 3 of the Act.

4.1.2 Overview of responses

Based on all the information received, an overview of responses for each of the four questions is summarised below to help inform if asset transfer legislation is being implemented as intended by Relevant Authorities.

a. Has the legislation made things easier or more difficult to work with communities on asset transfers? Please provide some comments on your experiences as a Relevant Authority engaging with this legislation.

Local Authority responses to this question indicated that they view asset transfer legislation positively and consider it a tangible example of community empowerment in action. A few noted that they had experience of transferring assets to communities prior to the legislation being introduced but acknowledged that the legislative framework, supported by statutory guidance and specific timescales, has shifted the balance of power towards communities and provides a transparent and effective route to work with on asset ownership. They also highlighted that the legislation has helped to increase visibility and greater awareness within communities of the possibilities afforded by asset transfers. Another element mentioned by some Local Authorities was that asset transfers provide greater consistency of process across Local Authorities. The right for Community Transfer Bodies to request an internal review and Scottish Government appeal was also found to be an empowering aspect of the legislation by some Local Authorities.

Some Local Authorities reported that the asset transfer process can be complex and can involve extensive staff time from a number of departments including legal, finance, planning and their communities teams. They stressed the importance of meaningful and transparent engagement with the Community Transfer Bodies prior to beginning the formal application process as one of the key components to achieving a successful outcome.

The majority of Local Authorities who responded have put better processes and additional resources in place to respond to enquiries. They recognise that the legislation can be difficult to navigate for some Community Transfer Bodies who may not have the necessary skillsets or support, to allow them to achieve a successful outcome. It was suggested by a few Local Authorities that the availability of case studies as part of the asset transfer statutory guidance, along with examples of questions and answers, would be useful to help respond to some of these issues.

It was also highlighted by a few Local Authorities that, whilst supportive of the legislation and the benefits it affords Community Transfer Bodies, at times a transfer using the legislation can be more onerous for both parties than a negotiated sale, largely due to best value considerations. All Relevant Authorities have a duty to secure best value in their operations; however, acknowledge that best value does not always mean the highest possible price. They also have to consider social value^[1] implications and this can be challenging to evidence when considering asset transfers as part of the overall decision making process. To provide greater clarity on social value for asset transfers, the Asset Transfer Social Value Guidance was published in 2021 by the Scottish Government with input from the National Asset Transfer Action Group.

It was also highlighted by one Local Authority that the Scottish Public Finance Manual which provides guidance on the proper handling and reporting of public funds, makes no specific reference to asset transfer legislation. The manual does include a section which describes the duty of best value in public services and contains guidance for accountable officers. It was suggested that better alignment between the asset transfer statutory guidance and this section of the manual would be helpful.

A few Local Authorities explained that, for smaller and marginalised groups, providing the required information in their asset transfer application can be onerous, especially around quantifying community benefits. They commented that some smaller Community Transfer Bodies underestimated the financial costs involved to progress their application, for example, feasibility studies, community engagement and business plan drafting. It was highlighted that access to discretionary grants could go a long way to relieve pressure on community organisations navigating through the asset transfer process. For example, the Scottish Government’s Scottish Land Fund supports communities to become more resilient and sustainable through the ownership and management of land and land assets including asset transfer.

Alongside the Local Authorities, responses from other Relevant Authorities provided helpful insights into their experience of asset transfers and similarly indicated that the legislation has been welcomed. Several of these responses commented that the legislation had helped regulate the asset transfer process, making it easier to work with communities, particularly where a Community Transfer Body might not have a clear understanding of the process or the requirements they have to fulfil.

A number of Relevant Authorities reported that asset transfer legislation has raised awareness of the opportunity to take on public assets outwith Local Authorities, particularly for community organisations who might not normally be aware of these rights, contributing to community empowerment. However, a few commented that negotiations on asset transfer with the Community Transfer Body outwith the legislation can sometimes be easier to take forward. A few Relevant Authorities commented that the current statutory guidance, case studies and toolkits produced to support organisations, has increased awareness of the benefits and challenges of asset transfer legislation.

b. Where can things be further improved, and what needs to change?

Relevant Authorities who responded to this question provided extensive feedback on where things can be improved and what changes are needed to further improve the asset transfer process. A number of Relevant Authorities highlighted the need for Community Transfer Bodies to have better awareness of the timescales involved in the asset transfer process. They provided examples of the length of time that it can take when negotiating the final terms and conditions of transfer including any discounts, planning permission considerations, access to external funding and business planning. Another example provided was that more clarity on how Community Transfer Bodies are constituted to be eligible for asset transfer would be helpful and tailored support should be provided to community groups experiencing inequality, due to the administrative demands of the asset transfer process.

A few Relevant Authorities also noted how more information from a Community Transfer Body to support their application including robust costings, could make it easier for the Relevant Authority to consider and respond to the request. They noted that the statutory guidance^[2] recommends ‘outline only’ in an application which is unhelpful and can cause delay. One Relevant Authority commented that asking for more detailed information may make them appear overly prescriptive, but that they are undertaking this approach to ensure the sustainability of the Community Transfer Body’s application. As well as the support provided by COSS, it was suggested by one Relevant Authority that independent legal support for Community Transfer Bodies with a good understanding of the asset transfer process would be beneficial for groups.

Several Relevant Authorities who submitted responses for this question were interested in seeking clarification on how to deal with multiple asset transfer requests and withdrawn requests, particularly around statutory timings and restrictions to selling the asset. They reported that this part of the process is ambiguous and explained that updates to the statutory guidance, with good practice examples, would help clarify this.

One Local Authority raised the need for clearer guidance on the conditions of transferring the asset from a Relevant Authority to a Community Transfer Body following a successful asset transfer request under the legislation. These conditions are sometimes referred to as clawback and the Local Authority noted that at times this lack of clarity can negatively impact the benefits of the asset and clearer guidance was suggested to address this. This is to protect the value of the asset and ensure it (or the value) remains in community control. To ensure that Local Authorities meet best value obligations and protect public resources, the placing of burdens or other protections is recommended in the asset transfer statutory guidance. The same Local Authority highlighted that a number of external funding bodies can refuse to provide funding to groups that have an economic development burden^[3] greater than five years. This can sometimes place Local Authorities in a contradictory position and they felt required clarification at a national level.

Finally, it was highlighted by one Relevant Authority that more capital grant funding was needed for community bodies to help upgrade newly acquired assets that need essential improvement work, as Community Transfer Bodies have highlighted particular challenges around limited availability of flexible financial sources to fund redevelopment of assets following transfer.

c. Are you aware of what support is available to you when engaging with this legislation and how you can access this? Please provide comments where possible.

All Relevant Authorities who responded to this question stated they are aware of the substantial support available when engaging with the legislation and how to access it, in particular support provided by COSS including resources on the COSS website. Two Local Authorities highlighted the value of a knowledge hub that has been established and open to all Local Authorities to facilitate shared learning. One Local Authority highlighted that an internal asset transfer working group with representation from different departments meet monthly to discuss asset transfers.

Members of Scottish Government agencies including Forestry and Land Scotland, Scottish Water, NatureScot and Highland and Islands Enterprise have operated a similar support network for the last few years and this has enabled the sharing of learning including good recording practices.

These examples of Relevant Authorities supporting each other to develop their asset transfer policies provides evidence of a more joined up approach being adopted throughout the country that is helping further embed the policy nationally and the development of best practice.

d.What would you like to see now, to further empower Scotland’s communities?

Several of the Local Authorities that responded to this question highlighted the need for additional resources to enable them to work more closely with communities. The role of community development services was also suggested by a few Local Authorities as a potential important internal partner to support the asset transfer process as well as property, estates, and legal services. The enhanced availability of start-up and capital development funds would be welcomed to support the delivery of community projects following acquisition of land and buildings. Sources of capital and revenue funding to support asset transfer were noted by a few Local Authorities as helpful, including the Scottish Land Fund and the UK Government Community Ownership Fund.

One of the other Relevant Authorities made reference to the challenges of consultation fatigue and duplication for Community Transfer Bodies in relation to evidencing engagement on community asset purchase, ownership or management proposals. They suggested that Local Place Plans, which were introduced by the Planning (Scotland) Act 2019 and contain a new right for communities to develop proposals for their local area, could be the central mechanism for evidencing community-mandated proposals and that it should be explored. They also suggested that more research is needed to identify rural deprivation, hidden poverty, and community resilience or fragility, so that a nationally consistent and more nuanced set of metrics can be developed to measure this. They felt longer-term community development support and multi-year funding for development workers was required to support this approach.

4.1.3 Conclusion

This part of the review has considered if asset transfer legislation is being implemented as intended by Relevant Authorities and has considered responses from 47 Relevant Authorities on four questions. As discussed above, responses indicate that asset transfer legislation is contributing to community empowerment and much has been learned through experience since it came into force in 2017. This has highlighted key learning which has informed the following findings:

4.1.4 Key Findings

• Relevant Authorities view asset transfer legislation positively and although at times can be considered a complex process to navigate, it has provided a legal framework to work to and greater consistency nationally
• Relevant Authorities have put better processes in place but highlighted that at times, Community Transfer Bodies can underestimate the complex legal process involved. Better awareness raising is required to address this and early meaningful engagement is key to achieving a successful outcome
• The asset transfer process can be particularly challenging for some disadvantaged or smaller Community Transfer Bodies and more work needs to be done to address inequalities – more targeted support from Community Development services was highlighted as important in this space
• More support is needed for Community Transfer Bodies post-acquisition including access to capital funding
• Requests for updates to the asset transfer statutory guidance including case studies and questions and answers is a common theme in the review
• Exploring an update to the Scottish Public Finance Manual to align better with the asset transfer statutory guidance could be beneficial for Relevant Authorities
• All Relevant Authorities who responded to the review reported good awareness of support available for asset transfers including from Scottish Government and COSS

4.2 Is Asset Transfer legislation empowering Community Transfer Bodies to make a positive difference in Scotland’s communities?

4.2.1 Introduction

This section of the review explores the extent to which asset transfer legislation is empowering Community Transfer Bodies to make a positive difference in Scotland’s communities.

To help answer this question, two reports provided by COSS were considered following a request for information from the Scottish Government. The COSS Consultation Report^[4] contained information from COSS who were asked by the Scottish Government to consult their networks and gain feedback from those that have engaged with the legislation. COSS sent a questionnaire to all their contacts on the COSS client database known to have used asset transfer legislation, and they also shared the questionnaire with Third Sector Interfaces5 (also known as TSIs) to try to capture the experiences of groups navigating the asset transfer process without COSS support. They also held interviews with six community organisations representative of the issues arising out of their initial survey analysis. These interviews were carried out by COSS staff between January and May 2022 (although not by advisers who had worked directly with respondents on their asset transfer applications).

The COSS Asset Transfer Implementation Report^[6] provided information on general trends and some specific issues emerging since asset transfer legislation was enacted in January 2017. As part of this report, COSS provided comments on implementation of the legislation and outcomes for communities. The information provided is based on the experience of their advisers supporting communities navigate the asset transfer process and the various consultations they have undertaken. As outlined in section 1.2 above, COSS is funded by the Scottish Government to support the implementation of asset transfer and their insights are provided from a perspective of an organisation that is wholly supportive of asset transfer and community ownership, and is committed to seeing the legislation work well in practice.

Information was also gathered from three community workshops hosted by the Scottish Government in partnership with COSS and held in Dumfries, Edinburgh, and Inverness between June and September 2023. Attendees included individuals from community organisations, public authorities, and third sector organisations who shared their experience of asset transfers.

Another key part of this review was learning from a two year pilot project which looked at a central model of support for community groups considering asset transfers.

Finally, findings are presented from Rural Assets: Policy and practice insights from the devolved nations which was a UK wide study led by researchers from Glasgow Caledonian University between 2022 and 2024 on rural communities experience of land acquisition. The Scottish Government was a key contributor to this work which was conducted separately and independently of this review, but has provided important information about the positive impact of asset transfer legislation in Scotland and the learning to be gained.

4.2.2 COSS Consultation Report Summary Findings

The COSS Consultation Report has provided helpful information from a survey which received 40 responses from 38 community groups with an awareness of asset transfer legislation. The COSS survey found that most respondents were interested in ownership of assets requested (29 respondents), and a further 20 responded to the survey with an interest in leasing or managing an asset instead. Overall, the majority of respondents to the COSS survey (21) felt in light of their experience, Part 5 had helped them achieve benefits for their community. Support from TSI’s was also highlighted by respondents to the survey as valuable, and respondents commented that governance, community engagement, and options appraisals were three areas where support was least needed and their greatest strengths lay.

The COSS survey concluded that Part 5 of the Act has succeeded in providing community groups with a more prominent, rights supported, route to the use of land and buildings for community benefit. It was perceived that the full benefit of the rights, however, have been undermined by the negative experience too many groups continue to have. Areas highlighted by COSS requiring improvement include:

• the inconsistent availability of information from Relevant Authorities on asset transfer and the processes underpinning it
• the availability of information by Relevant Authorities on the assets and the internal processes required to enable community groups to navigate that route
• the lack of clarity and poor experience many community groups have of the validation stage of the asset transfer process
• the lack of support for key elements of the process including valuation, technical design survey and legal costs

The interviews COSS conducted with six community organisations also highlighted a lack of information on some Relevant Authority websites, in addition to disproportionate requests and onerous requirements to provide information and a lack of support or engagement with the Community Transfer Body. On infrastructure, the support of third sector organisations was highlighted as important. It was suggested that some changes to timescales for decisions in the legislation may help improve outcomes.

4.2.3 COSS Asset Transfer Implementation Paper Summary Findings

The COSS Asset Transfer Implementation Paper provided helpful insights on general trends and some specific issues emerging since asset transfer legislation was enacted in January 2017 and made a number of observations. The extensive information provided by COSS is not all included in this report, however key points are summarised. These include proposed updates to the asset transfer statutory guidance such as encouraging proportionate approaches to transferring assets outwith the legislation particularly in relation to leases; including clear details of support available on governance and eligibility criteria for Community Transfer Bodies including signposting to external support; strengthening guidance on how to deal with multiple Community Transfer Bodies interest in the same asset; and exploring any changes to State Aid^[7] following the UK exit from the EU. Other key observations are:

• more robust information is required and ways to encourage compliance should be explored as asset registers published by is varied despite Section 94 of the Act stating that each Relevant Authority must establish and maintain a register of land and make it publicly available
• Community Transfer Body membership numbers for asset transfer ownership requests should be reduced from the current 20 to 10 to align with Community Right to Buy Land legislation
• introduce a 10 working day response time to a formal asset transfer request
• include information on non-financial benefits of asset transfers and obtaining joint valuations
• annual reporting requirements should be reviewed to capture more information on community groups and assets transferred, and for Relevant Authorities to return their reports to Scottish Government annually
• the need for post-acquisition funding support as the single most important issue if asset transfer ambitions are to be realised

COSS highlighted challenges that some Community Transfer Bodies experience when a public asset is managed by an Arm’s Length Executive Organisation^[8] (sometimes referred to as an ALEO), due to lack of transparency of who owns the asset. COSS suggests the issue of ALEO transparency is explored and more clarity is provided by the Scottish Government. This issue was also previously raised by then Local Government and Communities Parliamentary Committee in 2021 and was discussed at the National Asset Transfer Action Group. This review has found that only a very small number of Community Transfer Bodies have been affected and providing information in the asset transfer statutory guidance will be explored to provide more clarity.

4.2.4 Learning from a ‘Hub and Spoke’ Model

To explore novel approaches to embedding asset transfer with a focus on supporting areas experiencing inequalities, COSS in partnership with the Scottish Government supported a two year pilot exercise in Barmulloch, Glasgow during 2021-2022. The ‘Hub and Spoke’ model of support was coordinated by a local organisation, the Barmulloch Community Development Company (BCDC), and funded jointly by the Scottish Government and COSS. It trialled a peer led support approach to asset transfers with BCDC supporting local groups through the process, helping with their applications, advising on funding, and signposting to other support channels where necessary in the North and East of Glasgow, and supported 11 local groups progress their asset transfers over a period of 18 months.

Learning from the Hub and Spoke model has shown that a targeted model of support for smaller and newer organisations can yield positive results. A local anchor group such as BCDC with experience of working with local partners can be crucial in making connections for new groups who otherwise may have struggled to do so. For example, links to funding sources, advice on taking on assets outwith legislative methods, and relationship building.

This model demonstrated an innovative approach to achieving short term outcomes to support local organisations take on public land or buildings using asset transfers, who otherwise may not have engaged with the process. It also showed the potential to upscale to other areas of Scotland and could be adapted in different local contexts.

4.2.5 Overview of findings from Community Workshops

The community workshops held in 2023 and organised by Scottish Government and COSS provided further information from those with experience of engaging with the asset transfer process. The workshops found that when provided, support from the Relevant Authority is valued as it makes the process smoother and more transparent for the Community Transfer Body. Areas where support was needed included at the expression of interest stage of the process including clear guidance on validation, accessing funding and post-acquisition support. Another key point raised was the need for clearer asset registers as also outlined by COSS above.

4.2.6 Rural Experiences of Community Asset Acquisition

Rural communities can sometimes face particular challenges that affect community resilience and wellbeing, and the acquisition of local assets can play a role in strengthening local networks and community empowerment.

The project “Rural Assets: Policy and Practice Insights from the Devolved Nations”^[9] was led by researchers from Glasgow Caledonian University with input from Bangor University, University of Highland and Islands, James Hutton Institute, Anglia Ruskin University, Community Thinking Organisation, and Derry and Strabane District Council. It was funded by the British Academy and the Nuffield Foundation collaboration on Understanding Communities. The Scottish Government was a contributor and was interested in gaining a better understanding of the experiences of rural communities using asset transfer legislation.

The project ran from 2022 to 2024 and compared rural asset acquisition approaches across the four UK devolved nations. It aimed to understand the impacts of the processes of community asset acquisition upon the empowerment, resilience and wellbeing of rural communities.

The report found that Scotland is often viewed as the most advanced nation in the UK for community asset acquisition due to the presence of Part 5 of the Community Empowerment (Scotland) Act 2015, and also including the Land Reform (Scotland) Act 2003 and the Land Reform (Scotland) Act 2016.

Their research found that capacity and knowledge building around the legislative process was needed across the UK, including opportunities for shared learning from other rural communities who have been through the process. It recommended that further resourcing and training is required to provide consistency, accountability and adoption of community asset transfer (and community empowerment more broadly) across all Relevant Authorities, and, in particular, training is required around keeping to timescales, proactively changing resistant cultures, and reducing levels of bureaucracy.

However, their report^[10] found that Scotland is the most advanced nation in the UK in term of policy and law for community asset acquisition, and further opportunities should be identified to share learning with the other UK nations around what works (and what hasn’t worked so far), and in particular the differences that legislation had made since its introduction.

4.2.7 Conclusion

This section of the review explored the extent to which asset transfer legislation is empowering Community Transfer Bodies to make a positive difference in Scotland’s communities. It includes learning from two COSS reports, three community workshops organised by Scottish Government in partnership with COSS in 2023, a two year pilot project which looked at a central model of support for community groups and a UK wide study on rural communities experience of land acquisition.

Although from a small sample size, the COSS survey found the majority of respondents felt asset transfer legislation had helped them achieve benefits for their community. However, areas highlighted by COSS requiring improvement included better asset transfer information on Relevant Authority websites, more transparency relating to the validation stage of the application process and more support for other key elements such as valuation, technical design and legal costs. Feedback from the 2023 community workshops held by Scottish Government and COSS reiterated these challenges.

COSS’s insights on general trends and issues based on their extensive experience supporting asset transfer since it came into force has suggested a number of areas for improvement in the asset transfer statutory guidance. They observed that more robust information is required on asset registers, reducing the Community Transfer Body membership numbers from 20 to 10 to align with Community Right to Buy Land legislation was needed and also introducing a 10 working day response to a formal asset transfer request. COSS also suggest greater information was needed on non-financial benefits of asset transfers and joint valuations, better annual reporting and the need for post-acquisition funding for Community Transfer Bodies.

Learning from the Hub and Spoke Model has demonstrated the value of peer support at a local level and how a targeted model of support for smaller and newer organisations can yield positive results. The community workshops highlighted areas where more support is needed to ensure a smoother process.

As well as the data outlined above, the “Rural Assets: Policy and Practice Insights from the Devolved Nations” project has provided helpful information in relation to how rural communities across the UK are engaging with community asset acquisitions. The report found that Scotland is viewed as the most advanced nation in the UK for community asset acquisition due to the legislation in place and proposed opportunities should be identified to share learning with the other UK nations around what works.

4.2.8 Key Findings

• Asset transfer has helped Community Transfer Bodies achieve benefits for their communities and has provided community groups with a more prominent, rights supported, route to the use of land and buildings for community benefit
• Community workshops held during 2023 found that more support for local groups was called for at the expression of interest stage, the decision making processes, how to access funding and post-acquisition support
• The review has highlighted that updates to the asset transfer statutory guidance are required to make the process clearer
• Legislative proposals are suggested by COSS including changing the requirements for Community Transfer Body membership numbers and introducing a timeframe to respond to formal asset transfer requests
• More robust information is required on asset registers published by Relevant Authorities to help communities identify assets that may be available through asset transfer as outlined by Section 94 of the Act
• Greater clarity is needed on the use of ALEOs and their role in the asset transfer process
• COSS highlight that the need for post-acquisition funding support as the single most important issue if asset transfer ambitions are to be realised
• The value of peer support at a local level and how a targeted model of support for smaller and newer organisations can yield positive results and this could be upscaled to other areas of Scotland
• Research has demonstrated that Scotland is viewed as the most advanced nation for community asset acquisition due to the asset transfer legislation and opportunities should be identified to share learning with the other UK nations around what works

4.3 Are the appeals and reviews mechanisms working as intended?

4.3.1 Introduction

Asset transfer legislation includes an appeals and review mechanism for Community Transfer Bodies, and this process is co-ordinated by the Scottish Government’s Public Service Reform Directorate. Asset transfer requests must be assessed by the Relevant Authority against a specified list of criteria laid out in the Act, and requests must be agreed unless there are reasonable grounds for refusal. However, under Part 5 legislation a Community Transfer Body can seek a review or appeal if their asset transfer request is:

• refused
• agreed but the terms and conditions in the decision notice are significantly different from those in the request
• no decision notice is issued within the required period
• agreed but no contract is concluded within the required time limit

The legislation provides for separate approaches to considering asset transfer appeals or reviews depending on the Relevant Authority.

When an asset transfer request is refused by a Local Authority, the Community Transfer Body can apply for an internal review by that Local Authority, as set out in Section 86 of the Act. If the internal review upholds the initial decision made by the Local Authority to refuse the asset transfer request, or if the Community Transfer Body disagrees with the review decision, they can then appeal to Scottish Ministers under Section 88 of the Act. These asset transfer appeals are considered on behalf of Scottish Ministers by the Scottish Government’s Department of Planning and Environmental Appeals who allocate an independent Reporter to the case.

When an asset transfer request is refused by other Relevant Authorities such as health providers, further education colleges and regional transport partnerships on the asset transfer list in Schedule 3 of the Act (see Annex A), the Community Transfer Body can appeal to Scottish Ministers under Section 85 of the Act. In these circumstances there is no internal review process included in the legislation, and appeals are considered directly on behalf of Scottish Ministers by the Department of Planning and Environmental Appeals independent Reporter.

If the asset transfer request is refused by organisations managing assets on behalf of Scottish Ministers such as Scottish Government agencies, the Community Transfer Body can apply for a review by the Scottish Ministers under Section 87 of the Act. In these circumstances, the legislation states the Scottish Government must establish an independent panel of three to consider the review and report their findings and recommendation to Scottish Ministers.

If an appeal or review request has been considered by Scottish Ministers and awarded to the Community Transfer Body, but no contract has subsequently been agreed within the required time limit, the Community Transfer Body can appeal to Scottish Ministers under Section 83 of the Act. Also, in these circumstances, the Scottish Government must establish an independent panel of three people to consider the appeal and report findings and their recommendation to Scottish Ministers. These appeals are rare and are likely to concentrate on contractual negotiations between the Community Transfer Body and the Relevant Authority.

In all cases the Department of Planning and Environmental Appeals Reporter or the independent panel must provide a report with a recommendation to the Minister with portfolio responsibility for asset transfer who will have the final decision on behalf of Scottish Ministers. There is no further route of appeal beyond this stage except a judicial review.

4.3.2 Appeals and Reviews Data

Since asset transfer legislation came into force on 23 January 2017, the Scottish Government has considered 16 appeals and one review submitted by Community Transfer Bodies. From the 16 appeals that have progressed to Scottish Ministers for decision, 12 related to Local Authority assets with nine for purchase, ranging from ownership offers of £1 to around £3 million, and three requests were made for leasing rights. Eight out of the nine appeals for purchase were upheld and therefore refused, with one granted.

One of the three appeals to Local Authorities for lease related to a 15 year lease for £1,500 per annum which was refused. The other two appeals were made for the same asset which was a five year lease for £1 per annum. The first appeal lodged to the Scottish Government was undertaken by a Department of Planning and Environmental Appeals Reporter, and Scottish Ministers granted the asset. The second appeal for the same asset was submitted by the Community Transfer Body as no contract was concluded and this is still ongoing and being considered by an independent review panel.

Four appeals that progressed to Scottish Ministers for decision related to NHS property, three of these requested ownership and one for lease. Two of the three decisions for ownership requests were upheld and refused, and one was withdrawn as the Relevant Authority and Community Transfer Body came to an agreement to transfer outwith the legislative process. The request for lease was granted which was a 25 year lease for land and buildings at £52 per annum.

Finally, the one review received for a Scottish Ministers owned asset to purchase 8.28 hectares of land for £95,000 was granted.

In summary, 11 appeals have been refused by Scottish Ministers, four appeals have been awarded, and one review has also been awarded. One appeal was being considered at the time of writing this report. Full details of each appeal and review that have progressed to Scottish Ministers for decision can be accessed in the Scottish Government asset transfer appeals and reviews summary document including Relevant Authority and Community Transfer Body names, relevant dates, type of request and asset, decisions and weblinks to all associated documents.

4.3.3 Overview of Learning from Appeals and Reviews

In the eight years that asset transfer legislation has been enacted, 16 appeals and one review could be considered a low number in the context of the number of asset transfer requests that have been made and awarded. Although this report cannot provide robust data for asset transfer activity due to the various differences in local recording practices, it is fair to conclude that from the information currently available on Relevant Authority websites, the numbers of asset transfer applications and those granted are much greater than those that have progressed to an appeal or review. For example, to put into context, from information published by Forestry and Land Scotland (one of a total of 95 Relevant Authorities), there has been more than 33 asset transfers awarded since 2017.

Learning from the reports of the independent Reporters shows that the appeals and review process can be a time consuming and challenging experience for both Relevant Authorities and Community Transfer Bodies. Appeals and reviews can also take a long time to conclude depending on the complexity of the asset in question. For example, from lodging an appeal or review to the Scottish Government to a final decision, the average time taken to consider the request has been five to eight months, with the shortest appeal time so far taking five months to consider, and the longest appeal has taken one year and five months to consider; however, this was the first one ever received.

The appeal that has taken the longest time to consider to date is for a five year lease of community land at £1 per annum, and is still being considered, and was first received in June 2021. These timescales do not take into account any internal review undertaken by a Local Authority prior to the appeal to Scottish Ministers being considered.

The review that related to a Scottish Ministers owned asset to purchase 8.28 hectares of land for £95,000 which was granted, took one year and 10 months to consider. As this review was the first ever received, it also involved creating new processes to consider these requests alongside the actual review itself.

The extensive appeal and review reports provided by the Department of Planning and Environmental Appeals Reporters and independent panel since 2018 has provided helpful insight and learning, not previously available, on the opportunities and challenges relating to asset transfer legislation. The reports highlight a number of areas where procedures could be amended to acknowledge the uniqueness of asset transfers compared to standard property transactions.

For example, in the asset transfer report of Beatroute Arts a Community Transfer Body requested ownership of a building for £45,000 from the Local Authority. In their report to Scottish Ministers, the independent Reporter highlighted the opportunity for a tailored approach for asset transfers under Part 5 legislation that accounts for non-financial benefits, regeneration, contribution to public health, and social wellbeing. The Reporter found that flexibility of conditions of transfer may need to be adapted by Relevant Authorities to account for these benefits which can be challenging to account for in the assessment phase given their subjective and non-quantifiable nature.

A report submitted by the independent Reporter considering an appeal from Brechin Healthcare Group highlighted the non-tangible benefits of asset transfers and the challenges faced by in calculating the social value of asset transfer requests. In the asset transfer report of Brechin Healthcare Group, the independent Reporter considered a decision made by NHS Tayside to refuse an asset transfer requesting ownership of a building for £150,000. They noted the challenges in balancing community benefit with value. Reporters acknowledged that the Scottish Public Finance Manual makes no specific reference to asset transfer legislation and may benefit from updating to account for this, which was also highlighted by Relevant Authority feedback in section 4.1.2 of this report.

A report by the independent Panel that considered the asset transfer review from Knocknagael Ltd also observed that there was nothing within the Scottish Public Finance Manual to guide either the panel, or Scottish Government officials on the inter-relationship between the manual and asset transfer policy. They also noted that the manual section on best value gives no information on how competing value assessments are to be made. The Knocknagael review panel recommended that Scottish Ministers reflect, for the future, on the wording of the manual and its inter-relationship with community asset transfer policy.

The independent panel also highlighted the challenge of a Scottish Government department’s role as an independent Relevant Authority. Learning from the Knocknagael review highlighted that Relevant Authorities representing Scottish Ministers should be able to draw on expertise from other areas in the wider Scottish Government. This would enable the appropriate expertise to be consulted and could attend as witnesses to express their respective policy perspectives. The panel found this could help support reviews, however this would have to exclude officials from the Public Service Reform Directorate who co-ordinate all appeals and reviews.

4.3.4 Overview of Findings from COSS Reports

In the COSS Asset Transfer Implementation Report, COSS provided comments on the asset transfer appeals and review procedures based on the experience of their advisers.

From this experience, COSS’s view is that the review and appeals processes are some of the most complex areas of the legislation, can be challenging, time consuming and can affect the wellbeing of individuals involved in the process. COSS propose that one way to reduce some of these challenges is to increase the current 20 working day limit for a Community Transfer Body to appeal an asset transfer decision, as the current limit is insufficient time to deliberate and collate all the necessary evidence needed. This could provide more time to submit better quality applications and more importantly, enable improved negotiation following an agreement of an asset transfer request where the terms and conditions are unacceptable to the community. The 20 working days to conclude complex negotiations around conditions can at times be difficult and in some cases, the Community Transfer Body is compelled to appeal simply to preserve that right, when they would have preferred not to appeal. COSS propose increasing the timescale to appeal to three months.

COSS acknowledge that the time taken by Department of Planning and Environmental Appeals Reporters to consider appeals on behalf of Scottish Ministers has improved over time and this is outlined in the overview of appeals and reviews section above, with the average time being five to eight months. However, as Scottish Government Minister appeals have no legislative deadline to complete the process, COSS propose Ministerial reviews and appeals processes should be aligned with Local Authority review processes by introducing a six-month deadline for a decision to be made, with an option for extension if agreed by the community. COSS also propose that two separate documents for a Local Authority internal view and Ministerial reviews would aid clarity, or alternatively updating the statutory guidance including a flow chart would be helpful.

Finally, in the spirit of supporting community empowerment, COSS suggest that it would be helpful practically to ensure Community Transfer Bodies are informed in advance when important deadlines are approaching. For example when a Relevant Authority does not issue a decision notice within the allowed time but no extension is agreed, it can risk the community losing its right to review or appeal. COSS propose introducing a mechanism that either requires an Relevant Authority to notify the Community Transfer Body that the six months has passed, or remove the 20 working day limit for reviews or appeals where no decision notice has been made.

As outlined above COSS also provided a Consultation Report that outlined findings from a survey of individuals with experience of the asset transfer process and this includes information about reviews and appeals. Community Transfer Bodies view the opportunity in the legislation to appeal a decision on an asset transfer request positively. As already highlighted by COSS, those who took part in the survey agree that the experience can be challenging, in particular the time taken to prepare documentation, evidencing community benefits, secure funding at appropriate stages and navigating the legislative process.

4.3.5 Overview of Findings from Community Workshops

As outlined earlier, during 2023, three community workshops were facilitated by Scottish Government and COSS. A small number of attendees shared their experience of the asset transfer appeals and review process. This included feedback that 20 working days is insufficient time for community groups to prepare and submit asset transfer appeal documentation, that there is a lack of deadlines when an appeal or review is submitted to Scottish Ministers, and the lack of timeline for Relevant Authorities to make an offer to the Community Transfer Body following an appeal decision is unhelpful.

4.3.6 Conclusion

This section of the review has considered if the appeals and reviews mechanisms for asset transfer legislation are working as intended. This includes learning from the reports of the appeals and review processed by the Scottish Government to date. It also considered information about appeals and reviews in the COSS Asset Transfer Implementation Report and the COSS Consultation Report. Finally, information from three community workshops hosted by the Scottish Government and COSS was considered.

Since asset transfer legislation came into force in 2017, the Scottish Government has considered 16 appeals and one review submitted by Community Transfer Bodies. Eleven of these appeals have been refused, four awarded and one is currently in progress. The one review request that has been received to date was also awarded. Considering that asset transfer legislation has been in force for almost eight years the number of requests that have progressed to an appeal or review could be considered very low. Additionally, with the majority of those requests being upheld it indicates that the appeal and review processes in place are working, although Relevant Authorities and Community Transfer Bodies can at times find these difficult to navigate.

The appeal and review reports provided by the Reporters and independent panel has provided helpful learning that acknowledges the uniqueness of asset transfers and includes some suggestions for procedural improvements. For example reports highlighted that better flexibility of conditions of transfer should be considered by to account for the non-financial benefits, regeneration, contribution to public health and social wellbeing that asset transfers can contribute to. The Reporters acknowledge that these community benefits can be challenging to account for in the assessment phase, given their subjective and non-quantifiable nature, in particular calculating the social value of asset transfer requests. In two cases, one Reporter who led on an appeal and the independent panel who led on the review, highlighted that the Scottish Public Finance Manual makes no specific reference to asset transfer legislation and may benefit from updating to account for the inter-relationship between the manual and asset transfer policy. The review independent panel also highlighted significant learning from the first Scottish Government owned asset review and suggested that Relevant Authorities representing Scottish Ministers should be able to draw on expertise from other areas in the wider Scottish Government.

Feedback from the appeals and review sections in the two COSS reports commented that the appeals and review processes can be complex and time consuming but acknowledge that the time taken by the Reporters to consider these has improved over time. They propose changes to some of the legal timescales required in the appeals and review processes and aligning those with Local Authority internal review timescales. Better guidance was also proposed to aid clarity of process.

4.3.7 Key Findings

• Since asset transfer came into force on 23 January 2017, 16 appeals and one review have been received and numbers are low for an eight year period
• Asset transfer appeals and reviews are working well and despite their complexity and uniqueness, the majority have been upheld
• Significant learning has been gained from the appeal and review reports which include suggestions for procedural improvements
• One report highlighted that Scottish Government departments receiving a review on behalf of Scottish Ministers, should be able to draw on expertise from other areas in the wider Scottish Government
• The review found that the Scottish Public Finance Manual makes no specific reference to asset transfer legislation and may benefit from updating for better alignment
• COSS propose increasing the current 20 working day limit for a Community Transfer Body to appeal to three months and a that a deadline for Scottish Government appeals and reviews should be introduced to align with the six month internal review timescale for Local Authorities
• COSS propose to help improve clarity that two separate guidance documents for internal reviews and Scottish Government reviews are produced, or alternatively updating the asset transfer statutory guidance to reflect this