What I Walked Into: A 73-Page Wake-Up Call
Let me be brutally honest about what I inherited when I became clerk. The Council had accumulated quite a few assets over the years — we were in three long-term leases, had a large public park, a children's playground, and a four-storey Grade 2 listed community centre. But what we really hadn't grasped was the risk profile that came with these assets.
We had no condition surveys, no asbestos management, no Legionella risk assessments, no regular hazard checks, and no recorded playground inspections. When I brought in an external auditor to assess our health and safety compliance position, I ended up with a 73-page report containing 113 urgent recommendations.
This wasn't just untidy paperwork — it represented genuine risks to public safety, council finances, and potentially my position as the responsible person under health and safety legislation.
Understanding Community Asset Transfer
According to My Community (2020), community asset transfer is an established mechanism used to enable the community ownership and management of publicly owned land and buildings. In practice, this means the transfer of local authority "assets" to local councils.
Here's the fundamental question that every council needs to ask before taking on any transfer: if something costs you money every single year, drains your resources, and absorbs your time and capacity, is it really an asset or is it actually a liability?
Asset vs. Liability — Know the Difference
- An asset is something you own that has value, can generate income, or appreciates in value and can be sold for cash
- A liability is something that takes money out of your pocket regularly — loans, leases, ongoing service contracts, or any obligation requiring payment
The critical distinction: are you being transferred ownership (freehold), or are you being offered a 99-year full repairing lease? Because in financial terms, a 99-year full repairing lease isn't a gift — it's a massive responsibility.
Why We Do It (And Why We Should Be Careful)
Community asset transfers can be transformational for communities. The benefits are real: democratic control closer to service users, local empowerment, protection of services that might otherwise be lost, and access to grant funding not available to principal authorities.
But we need to be honest about the challenges: financial liabilities (especially with long-term leases), skills gaps (most local councils don't have estates teams), ongoing maintenance costs, community expectations, and limited capacity — most clerks are already stretched thin.
Assets are rarely transferred during times of plenty. They're handed down in times of crisis when budgets are tight and someone higher up is looking to cut costs.
The Insurance Reality Check
Insurance is not a one-off payment — it's an ongoing cost that can be significantly higher than what principal authorities were paying. Your insurer will likely insist on a reinstatement valuation, and you'll need a full condition report for planning and budgeting.
One thing that's easily missed is that most buildings are transferred after their original use has ended, often sitting empty for months or years. Insuring an empty building isn't easy. In some cases, all you can get is FLEEA cover (Fire, Lightning, Earthquake, Explosion, and Aircraft impact) — and even that comes with conditions.
Early insurer engagement is absolutely essential — build it into your timeline and budget before you sign a lease or agree to a handover date.
The Business Plan That Could Save You
In 2010, Connah's Quay Town Council took on a lease for a building and opened the Quay Cafe. They had a business plan, but it was vague, optimistic, and thin. By 2018, the cafe had drawn a cumulative loss of over £234,000, paid for through increased precepts. The Auditor General produced a report in the public interest — the strongest possible censure of a community council — stating that the Council had acted unlawfully.
The Essential 7-Point Checklist
Based on my experience and the lessons learned from others' mistakes, here's what every council needs to consider:
1. Terms of Transfer — Drive a Hard Bargain
- Is it leasehold (liability) or freehold (potentially an asset)?
- If freehold, is there a sunset clause limiting your ability to sell?
2. Prepare a Robust Business Plan
- Would your business plan survive audit scrutiny?
- Have you identified clear statutory powers?
- Is there a realistic exit strategy if income doesn't materialise?
3. Identify Health & Safety Responsibilities
- Are you resourced and trained for the duties the asset brings?
- Do you understand your role as the responsible person?
4. Sufficient Reserves to Mitigate Risk
- Have you made sufficient provision in reserves?
- Can you cover ongoing costs if income streams fail?
5. Speak to Your Insurer Early
- Have you spoken to your insurer before committing?
- Do you understand the full cost implications?
6. Get a Full Condition Survey
- Have you secured comprehensive condition reports?
- Do you understand what maintenance will be required?
7. Budget for Transfer Costs
- Have you budgeted for legal fees, surveys, and professional advice?
- Are you prepared for ongoing periodic assessments?
Practical Strategies for Council Officers
Negotiate hard: Push for freehold over leasehold. If it's a service that loses money annually, negotiate a cash transfer to go with it.
Demand surveys: Get a full condition report, electrical installation condition report (EICR), and asbestos survey completed before transfer.
Calculate true costs: Remember that principal authorities often use internal services that won't be available to you. Their accounts might show no repair costs because "the property department just fixes it."
Plan for periodics: Budget for reinstatement cost surveys every five years, along with all other periodic checks and certifications.
Consider governance: Sometimes running assets through a different structure (like a registered charity) can save significant costs — we save thousands on business rates this way.
