Scottish Public Finance Manual

Property acquisition, disposal and management

Scope

This section gives guidance on procedures and safeguards required when handling acquisition, management and disposal of land, buildings and other rights in property. The guidance in this section is also applicable to plant, equipment, machinery and vehicles.

There are specific exceptions to this scope (see appendix).

Applicability

The guidance applies to all organisations to which the Scottish Public Finance Manual is directly applicable. The principles should also be applied by all organisations to which the SPFM is directly applicable in cases where they have an interest in a disposal by a third party e.g. where funding is being provided as part of a financial package involving proceeds from a disposal.

Definitions

Links to relevant guidance:

Review/Update

Lead area: Scottish Government Property and Construction Division.

For update/review of this principle please refer to the Guidance and Procedure available on Saltire or from the Governance and Accountability team, this includes information on ministerial approval.

Accessibility guidance is available on the SG intranet.

Background

Assets are either non-current or current assets. Non-current assets are defined as a resource controlled by an organisation as a result of past events and from which future economic benefits are expected to flow to the organisation:

• non-current assets – property, plant and equipment, intangible or financial assets (investments) – are assets with an expected life of more than one year
• current assets are cash or other assets which can reasonably be expected to become cash in the normal course of business, including assets held for sale, stocks, debtors, accrued income and payments in advance

The acquisition of property usually necessitates an initial capital outlay and normally leads to longer term financial commitment. There is scope for substantial financial loss if such transactions are not handled properly.

Ministers remain clear that, in considering future office accommodation needs, the presumption should be in favour of suitable solutions from within the Government estate - Public bodies must contact Property & Construction Division regarding the Single Scottish Estate programme. In addition, should the renewal, extension or otherwise continuance of a commercial lease be under consideration as a preferred option, public bodies must seek early approval in principle for the proposed direction of travel from the Minister for Public Finance before developing a full business case.

Accountable Officers have a duty to ensure that the assets for which they are responsible such as land, buildings or other property – including stores and equipment – are properly and well managed. Robust systems should be put in place to ensure that the accuracy and integrity of information held on registers, databases and inventories is safeguarded and readily available. Investment registers, records of attractive items and systems for the management of stores and equipment must also be maintained. All other bodies to whom this guidance applies are required to maintain their own asset registers. 

Single Scottish Estate

Single Scottish Estate (SSE) – The SSE programme will help us have a more efficient approach to public sector property management that will deliver value for money, save public funds and reduce public sector property footprint enabling progress towards our net zero estate targets and supporting the best delivery of services to the public.

We will do this by building on existing good practice and working collectively with public sector bodies to develop and deliver targets to retain the right size and condition of estate in the right place at the right times across all publicly funded bodies in Scotland, ensuring that the size of our estate is sufficient to accommodate business delivery and reflects changes in working practices.

More information is available on Single Scottish Estate on the Scottish Government website.

General principles

The Scottish Ministers’ policy is that property holdings must be kept to a minimum. The decision to acquire a property must be part of an overall strategic plan for the organisation's needs. Property commitments, whether purchases, leases or any other form of agreement can be very expensive to reverse. Before acquiring any additional property, options for satisfying the requirement from within the Government estate must be fully considered. In generating strategic asset management and implementation plans, organisations should consider the Scottish Government’s “Estate Strategy – Central Estate”. 

Property holdings must be kept under regular review, using InSite and information on plant and equipment held on each organisation's  own robust  asset management system or register as appropriate. Once surplus assets have been identified they should be sold as quickly as possible, subject to value for money considerations.

To achieve value for money for surplus assets organisations must either:

1. obtain the best possible price on the open market, or
2. dispose of an asset at less than Market Value to deliver wider public benefits consistent with the principles of Best Value, or
3. transfer under the Guidelines for the Transfer of Property within the Scottish Public Sector, or
4. when considering asset transfer applications made under Part 5 of the Community Empowerment (Scotland) Act 2015, public service providers should refer to Section 82 of the Community Empowerment (Scotland) Act 2015 which outlines decision making criteria including Best Value considerations.

To ensure value for money is achieved and high standards of propriety and transparency are maintained, staff and advisers must be carefully supervised and clear separation of responsibilities kept between the valuation and disposal processes. When evaluating options for the treatment of surplus assets, consideration of the disposal of assets to community bodies should be included, where appropriate. This consideration should be consistent with the principles of value for money and feasibility (economy, efficiency and effectiveness), where wider public benefits may be achieved.

It is the responsibility of the Accountable Officer in each Directorate or organisation to whom the SPFM is applicable, to ensure that, where information is held on InSite, it is accurate and kept up to date. Information within InSite must be maintained to ensure accuracy and should be updated when changes occur as often as required. This information maybe used for reporting and it's accuracy is essential. There must be at least an annual validation exercise which organisations will be made aware of in advance by Property and Construction Division.

Requirement to seek professional advice

Business areas within the core SG, Crown Office and Procurator Fiscal Service, SG Executive Agencies and non-ministerial departments must seek advice from Property and Construction Division at the earliest opportunity when considering a significant investment in a leased asset or acquisition/disposal of property of interest. Other organisations, where required to do so under the terms of their framework document, should seek advice from Property  and Construction Division. Indicitave timings can be found in the Property Controls guidance.

Scottish Government Legal Directorate (SGLD) does not undertake conveyancing work. External solicitors must be appointed to deal with any disposals, except in the case of Transport Scotland and such other bodies as have their own arrangements. In all cases, suitably qualified and experienced solicitors must be used. For any lease being acquired in the name of Scottish Ministers, SGLD framework suppliers must be used and Property and Construction Division can provide support in engaging them.

It is essential to obtain early professional advice covering planning, marketing and negotiation of sales or acquisitions from suitably qualified and experienced specialists.

Valuation advice must be obtained from a suitably qualified Valuer who has sufficient current local and national knowledge of the particular market, and the skills and understanding to undertake the valuation competently. Valuation advice can be obtained from a private sector valuer or the Valuation Office Agency or, where an SG body employs internal valuers, they may undertake work on behalf of their own organisation so long as there is no conflict of interest. In all cases, the Valuer used must be a professional member of an appropriate body, such as the Royal Institution of Chartered Surveyors or the Institute of Revenues Rating and Valuation.

Disposal of assets

Where there are wider public benefits, consistent with the principles of Value for Money and Feasibility (Best Value), to be gained from a transaction, disposing bodies can consider disposal of assets at less than Market Value. This includes supporting the disposal of assets to community bodies, where appropriate. Otherwise, assets are to be disposed of at Market Value, as defined in the RICS Valuation – Global Standards (Red Book) effective from 31 January 2025 but reflecting any special value and the effect of any voluntary conditions imposed by the seller.

Public bodies should make use of the enabling facilities set out in the SPFM around disposing of assets at less than Market Value where the wider public benefit of doing so can be demonstrated.

Guidance and support are available to ensure options appraisals are comprehensive and appropriate budgetary provision is in place. When an asset is sold at less than Market Value the extent to which the price is less than Market Value constitutes a Gift. The prior approval of the relevant SG Finance Business Partner (or equivalent) must be obtained for the making of any Gift not covered by a specific delegated authority. SG’s Subsidy control Team and, where appropriate, the SG’s Property and Construction Division may also be asked to advise. SG's Directorate for Financial Management, Property and Construction Division and Subsicy Control Unit will assist with examining any affordability issues, accounting and reporting requirements where a disposal may constitute a Gift, and any potential Subsidy Control implications as appropriate.

Asset registers

Under resource accounting and budgeting, asset registers are a key part of financial management systems and must be capable of meeting the accounting requirements of the Government Financial Reporting Manual. The registers must contain details of all owned non-current assets whose value or original purchase price is over the organisation's capitalisation threshold. Asset registers must be computerised and the widespread use of commercial asset management software packages means that the structure and detail held will be dictated by the software but, as a minimum, information held must be capable of maintaining Asset Registers and provide data to calculate capital charges. The minimum information required for the Asset Register is:

• asset location
• date of acquisition (i.e. purchase date)
• initial capital expenditure (purchase price)
• useful economic life of the asset
• user cost centre
• source of funds (e.g. Government, donation, leased)

Business areas within the core SG must ensure that the Directorate for Financial Management is made aware of all acquisitions of property, whether for accommodation or for other purposes, in order that they can be listed on the Asset Register.

Records of "attractive" items (e.g. those vulnerable to theft) whose value falls below the capitalisation threshold should also be maintained by the holding body. Inventories of works of art must be kept in accordance with advice provided by the Government Art Collection.

Requirement for internal advertising of surplus land and property assets

Prior to offering land and property assets for sale elsewhere, all disposing bodies to which the SPFM or NHS Property Transaction Handbook is applicable, including bodies sponsored by the SG, must notify Property and Construction Division of the surplus asset in order that it may be internally advertised; a process known as The Trawl.

This procedure provides a mechanism for the transfer, at Market Value, of property held within the Scottish public sector. Where another body which is party to The Trawl expresses an interest to acquire the asset, the transfer must be undertaken following the Guidelines for the Transfer of Property within the Scottish Public Sector. The Trawl takes one month and must be completed before commencing marketing or entering into a commitment to sell elsewhere. Any parties expressing interest in acquiring a property through the trawl must be in a position to act quickly to complete the acquisition.

Once identified through The Trawl, a body which is not part of those to which the SPFM directly applies, can choose to agree to abide by the process as set out in the Guidelines for the Transfer of Property within the Public Sector and as such, direct transactions between the seller and the ultimate purchaser are possible. It is not necessary for the transaction to be facilitated through an initial purchase by a body to which the SPFM or NHS Property Transaction Handbook is applicable.

Detailed information is available in the appendix or from Property and Construction Division.

Disposal of plant and equipment assets

Plant and equipment assets which are surplus to requirements should be sold by public auction or tender. Payment should be required to be made before goods are released for collection or delivery. The law implies that any goods sold are of merchantable quality and fit for the purpose for which they are sold. If there is any reason to believe that goods may be faulty or sub-standard, it should be made clear that they are sold “as seen” and without any implied warranties as to quality or fitness.

Transfer of functions

Where assets are transferred without charge from one part of the public sector to another – including local authorities – as a result of a merger or transfer of function (Machinery of Government changes) the assets should be transferred at net book value. Transfers between parties within the SG’s resource budgeting boundary should include provision to cover depreciation. If it is necessary to amend legislation in order to enable a public body to undertake a function previously undertaken by another public body, then the amending legislation should cover the arrangements for the transfer of any associated assets. Any such changes should be agreed by Ministers, either specifically in legislation or on a case by case basis.

Public Private Partnerships

The investment appraisal for a Public Private Partnership (PPP) project may suggest that the option offering best overall value for money involves disposing of an operational asset (i.e. an asset which will form part of the project facility) at less than market value. However, if the value of the operational asset is fully reflected in reduced rental or service payments the question of a Gift does not arise.

Detailed guidance on PPP related disposals is available from Property and Construction Division.

Property transactions and financial accounting

There are rigorous financial accounting processes which must be adhered to when undertaking the disposal or acquisition of property. It is the responsibility of those undertaking any property transaction to ensure that all procedures have been properly followed. Further advice available from the Directorate for Financial Management.

Requirement to notify property controls team

Any decision regarding your accommodation should not be made in isolation. To help you consider your proposals in the wider SG context you should contact the Property Controls Team. The Property Controls Team will provide advice and guidance for any property matter, whether supporting the development of a proposal or scrutinising it to provide advice to Ministers. Public Bodies or sponsor teams should contact the Property Controls team, Property and Construction Division, as early as possible when considering a property matter, whether it falls within the scope of Property Controls or not. You should contact the team: 

• well in advance of any lease expiry, break option or rent review – preferably at least two years prior;
• if you are considering transferring property between public bodies or within different parts of the same public body (even if no transfer cost is envisaged)
• if you are considering any other leasehold discussions with landlords, tenants, MOTO occupants or subtenants;
• when you are updating your asset management plans;
• when you are recording accommodation property performance, environmental and cost information;
• if you are considering significant refurbishments or reconfigurations of existing property holdings;
• if you are thinking about appointing external advisors on property issues
• before declaring any property surplus.

This engagement is an essential element of the approval process for property transactions, as is engaging with your SG Finance Business Partner on developing the economic and financial case for change.

The Property Controls Team will engage proactively with organisations to provide support and challenge in the development of local asset management plans; to encourage good practice in asset use; and to develop a strategic forward plan for the acquisition, transfer and disposal of property across the central estate.

Contact Property Controls Team on propertycontrolsteam@gov.scot

Additional guidance and support

• Property controls: guidance for public bodies - gov.scot
• Single Scottish Estate - Public sector procurement - gov.scot
• acquisition of property guidance
• business needs analysis form
• space requirement questionnaire
• statement of need
• guidelines for the transfer of property in the Scottish public sector
• disposal of property guidance
• Internal advertisement
• management of property guidance
• Best Value in Public Services: guidance for accountable officers
• SPFM Best Value

Published: August 2018
Updated: September 2025