Locality: community ownership

Community enterprise and you

19 October 2011

Annemarie Naylor looks at the role of the property professional in relation to Locality, a nationwide movement with ambitions for changes in community ownership

Locality’s vision is for 'every community to be a place of possibility'. We have a 'more than profit' membership made up of over 600 inspirational community organisations from across the UK, as well as more than 200 associates (local authorities, consultants, national NFP organisations, etc). Our members are multipurpose and community-led in nature, with expertise in community asset development, social enterprise, community voice and advocacy. Together, they own assets worth over £750m.

Asset Transfer Unit

Since 2007, following the publication of Making Assets Work: the Quirk Review, we have worked with our members to spearhead the community asset transfer agenda; in particular, we have established the Asset Transfer Unit (ATU) with backing from central government to support the estimated 1,000 asset transfer initiatives under way each year in England alone (see Final Evaluation of the Asset Transfer Unit – Car Parks and Castles: Giving Communities the Keys, (SQW May 2011) ). There is practical interest in this work throughout Scotland, Northern Ireland and Wales. During the same period, we have also provided capital and business plan development support alongside investment programmes totalling more than £100m to promote sustainable community asset ownership.

There is enormous variety in associated projects. Communities actively pursue the acquisition, development and management of a range of assets for community benefit – from former public toilets, car parks, youth and community centres, pubs and post offices, to what were once town halls, working piers and inhabited castles. The ATU has even been approached to explore the feasibility of transferring Crown land beneath the sea to an innovative community organisation interested in developing it as a not-for-private-profit eco-diving destination.

The term ‘community asset transfer’ ordinarily refers to the transfer of land and building assets from the public to the not-for-private-profit sector at less than market value, in the service of social, economic and environmental well-being. At present, local authorities benefit from the General Disposal Consent provisions contained within Planning Circular 06/03. They are also encouraged to explore compulsory purchase orders in the service of community aspirations to acquire and develop assets. In future, added to this, communities are also expected to benefit from the Right to Buy provisions outlined within the Localism Bill.

A growing area

Looking ahead, assets held in community ownership are set to grow. At a national level, the policy context continues to encourage and enable community asset ownership – underpinned by the UK government's Localism and 'Big Society' agendas, as well as its aspirations for public service reform and new mutual service providers. Locally, the implications of dramatic reductions in public sector spending connected with assets deemed to be ‘of community value’ are already apparent – with local authorities keen to solicit the ATU’s support to progress multiple asset transfers related to Capital and Asset Pathfinder work, together with a 30% increase in enquiries from individual community groups between January and March 2011, compared with the same period last year.

It is therefore timely that RICS has published its Land and Society Commission report. Property professionals are being encouraged to engage in the growing marketplace of community asset acquisition, development and management. However, while the range of property services is required as much by communities involved in developing assets as they are by public and private sector organisations, there are some important differences. And, contrary to received wisdom, the vast majority are wholly unconnected to the capacity and skills of individual community organisations.

Case Studies

Davis Langdon Facilities Consulting and Community Asset Data

Davis Langdon Facilities Management Consulting has been working with the Asset Transfer Unit to develop a toolkit to help with the cost of ownership decisions involved in the ongoing transfer of assets from the public to the third sector. At the outset, the project sought to provide a tool to enable a reasonably informed assessment of condition to be translated into an ongoing profile of expenditure over a given period. There were, however, a number of assumptions about the structure and availability of the information available for the transfers of assets deemed to be of community value which proved, on market testing, to be over-optimistic to say the least.
The key points were:

  • transfer recipients’ understanding of the one-off and transactional costs involved
  • the technical ability of the transfer parties to assess condition and to translate this into a cost base
  • the availability of historic cost data for assets under transfer and visibility of maintenance records
  • the familiarity of the sector with technical terminology and asset component descriptions (the jargon).

The initial aim was to prepare a model that assisted asset transfer recipients to make an informed decision about the likely cost of ownership and lifecycle replacement issues. What became apparent after a series of workshops was that the toolkit needed to step back and provide information on all of the costs associated with the transfer process. This resulted in a series of guide sheets, each of which came to a ‘stop/go’ decision based upon the assessed risk associated with the level of information available and the experience and capacity of the transfer recipient.

Further study and structured telephone interviews with local authorities revealed that there were other procedural complications relating to lease terms, their ability to offer freehold transfers and clawback criteria. There was also a paucity of data relating to individual assets typically deemed to be of community value as a result of estate-wide management practices. All of this contributed to a widening of the need to provide initial guidance for the transfer recipient, and to embed additional key questions at an early stage of the process.

The first version of the toolkit was tested and further refined to remove ‘technical speak’. Working with the ATU has emphasised the need for professional bodies and consultants to review the common parlance of the industry. We recommend taking a step back when dealing with non-technical clients within the community sector, removing technical jargon where at all possible and making few or no assumptions about the level of technical expertise of the end user of the project output. The final toolkit for practical deployment is expected to be released during autumn 2011.

Chris Bicknell is an Associate at Davis Langdon Facilities Management Consulting

Hastings Pier & White Rock Trust

The Hastings Pier & White Rock Trust is a small, unfunded but entrepreneurial community group succeeding against all the odds. Our experience in seeking to save Hastings Pier demonstrates how ‘real life considerations’ impinge on any ideal approach to working with property professionals. The underlying issue for the project has always been timing. The catch-22 of ownership and funding dictated a need to twin-track progress on both sides, and this set the strategy for our development which, in turn, impacted on our approach to professional support.

Challenges involved in saving the pier have so far included:

  • Ownership – the pier was abandoned by its last owner. Locality’s Compulsory Purchase Order (CPO) Project funded some initial support from Stan Edwards (national CPO expert). This kind of input can make a huge difference to credibility, and is perfect for opening up bottleneck situations
  • Engineering – Giffords have been working for Hastings Borough Council on and off since before the pier closed in 2006. We needed them to join a Technical Advisory Group but didn’t know how to procure/contract this. There is also a serious lack of skills in pier/marine engineering. Furthermore, in the middle of our development process the person who ‘knew the pier inside out’ – Bob Wareham from Quadmost Engineering – sadly died, and his son said that they could no longer provide the service
  • Costing – early figures of £17m, £24m and at one point £50m were rumoured without any clear idea of how the pier would be restored. Our innovative approach changes the whole basis for the costing, but we have not yet been able to get an engineering QS review
  • Planning consents – to progress the CPO requires permissions (even clearing the debris after the fire needed listed building consent), so we had to procure an architect prior to a Heritage Lottery Fund (HLF) decision. We gambled on success by finding the best architect through a robust Royal Institute of British Architects-managed Official Journal of the European Union tender process, leading to a bit-by-bit contract with de Rijke Marsh Morgan Architects (dRMM)
  • Commercial advice – we used a Community Builders feasibility grant to buy high-quality bespoke consultancy from Leisure Development Partners, and we have been able to seek further contract work from them at each stage at excellent value. This relationship will be stress-tested by HLF procurement rules.
  • Other challenges included the need to convince the Council and others of the credibility of the Trust and its team. Our commercial advisors Leisure Development Partners were crucial in this regard, and bringing John Collins on board as a non-executive director for the forthcoming People’s Pier Company (the management company that will operate the above-deck space) was a stroke of genius for £500/month including VAT. Once we had dRMM on board and got into the consultation, with help from Glass-House Community Led Design, the sense of professional dynamism increased and was a major contributor to our success with the HLF.

The problems

  • Timing and resource availability are often issues of disproportionate importance in community-led projects.
  • Rigid procurement approaches make it difficult to ‘buy a little as you go along’.
  • Professionals aiming to sell themselves for the longer term mitigate against DIY or capacity-building solutions, and create mistrust between clients and professional advisors.

Professional supporters must experience and understand the project from the inside while bringing the fresh eyes of the outsider. Resource must be available in real-time and at risk – in other words, each step forward should be resourced for its own sake, without necessary commitment to the whole project. New business models are required to enable the slow release of professional support, the trying out of different potential advisors and the ability to stick with those that are providing good value in a flexible way.

These new approaches are not just about contracts and payment schedules, but about attitudes and the recognition that innovative community-led projects require a bespoke service, not least because they will always be David facing Goliath.

Jess Steele is Treasurer of the Hastings Pier & White Rock Trust

Penny Lane Development Trust

Penny Lane Development Trust (PLDT) is a small charity based in Liverpool. The charity serves as a hub in the community where people can meet up and take part in activities while finding a sense of belonging, and gained government funding to refurbish the disused building on Grove Mount as a fully compliant community centre.

The PLDT management board is made up of local people with a variety of skills and knowledge that helped drive the project forward when the time arose – construction expertise included. This was paramount when selecting the right professional team to deliver our capital project.

The attitude of Gilling Dod, the appointed architects, to the Trustees was key to ensuring that other professionals would take this project seriously. They shared the passion of the Trust and understood the needs of the organisation. ISG Regions was successful in winning the tender, and work began on Penny Lane in June 2009.

To ensure that all parties were kept informed, a monthly site meeting was arranged whereby a representative from each organisation had the opportunity to discuss the progress and any issues or concerns. One of the early issues was the use of construction terminology. I decided that if I was going to be able to understand and take part in these meetings, I would need to understand what they were talking about; once I communicated this to them, this was quickly resolved.

We are now at the post-defects stage of the project, which is thriving. We have everything we asked for and more. The professionals involved in this project have been paramount to its success. Relationships between community groups and professional bodies must be on a level whereby everyone is understood from the very beginning. The professionals involved have contributed to the success of the Penny Lane Development Trust in so many ways; ISG continue to support PLDT today by undertaking sponsored events to raise funds and also providing us with a bandstand for our garden area.

Julie Gornell is Senior Charity Officer at the Penny Lane Development Trust

Could you get involved?

Community asset developers benefit from working with property professionals who:

  1. Demonstrate an awareness of what is meant by ‘triple bottom-line outcomes’ – the social, environmental and economic aspirations of community organisations which, in turn, impact upon asset development motivation and decision-making
  2. Understand the local context (the market as well as the institutional landscape – with its key personalities connected to planning and regeneration) and can add value to what may be both possible and fitting given local circumstances
  3. Appreciate that not-for-private-profit organisations are accountable to communities in ways that public and private bodies are not, and require sufficient time to consult and engage local people before key decisions can be made. This is because community organisations have trustee boards – often involving local residents – which necessitates consulting people in greater depth
  4. Understand that community organisations will not grasp jargon or ask questions that they don’t know are likely to be important
  5. Take seriously the need to factor financial accountability and future organisational sustainability into the provision of relevant design and/or development advice
  6. Extrapolate management data pertaining to the onward management of built assets
  7. Propose practical solutions to the increasing requirement for up-scaling and speed on the part of newcomers to community development
  8. Can provide retrofit guidance relating to the energy costs of ‘second-hand assets’
  9. Appreciate the difference between the short-term economic aspirations of private sector developers and the long-term aspirations of community anchors
  10. Perceive value in medium-long term engagement with clients who value loyalty and tend to promote repeat business on a ‘word of mouth’ basis among kindred organisations.

Apart from contractual and paid work, there are many ways in which property professionals can engage with community enterprises. If you would like to get involved, the ATU is working with RICS to support Community Asset Development and you are encouraged to register details of the support you can offer at The Place Station.

Annemarie Naylor is Head of Assets at Locality

Further information

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