Devolution and Asset Transfer - May/June 2023 Edition

Article by Lesley Sambrook Smith

Neither unitary council has indicated that wholesale devolution is on the table, but if local councils want, or think they want, to take over an asset or service, there is nothing preventing them from contacting their relevant unitary council to begin discussions.  A word of caution, the council must do this with their eyes wide open and should spend some time considering the potential pitfalls and costs that may be associated with any transfer.

We have previously offered two sessions looking at Localism with the focus on devolution.  Broadly, six areas were considered as being very important when thinking about councils taking over assets and services.  Those areas were:

§  Community Engagement and buy-in

§  Insurance, liabilities, and risk assessments

§  Sources of funding

§  Employment related implications

§  Financial liability, considerations, VAT

§  Legal process of transfers, legal liabilities, contracts, leases

A council really needs to know if their residents will support the council when thinking about taking over an asset or service.  For instance, is it something that the local community really value?  What would happen if that asset or service was no longer available?  Would the community support an increase in precept to cover any costs associated with the asset or service transfer?  Understanding the community needs and their appetite for the council to step forward and take on a new asset or service is critical.  The council needs to communicate pro-actively and be in listening mode and, most importantly, shouldn’t make any promises to residents about securing the future of an asset.  If the community aren’t that enthusiastic, it will be an uphill struggle to bring them with you.  So, before the council approaches WNC or NNC, it should have held some community engagement events, social media surveys or written newsletter articles so they understand what the public opinion is.  Once the council has that information, it can start to think about the difficult questions.  And those difficult questions are all around employment, legal and financial matters.

If it’s a building, does the council want to own the building or lease the building?  Is the building fit for purpose, or does remedial work need to take place before the council considers taking it on?  What are the insurance costs and running costs for the building?  How will the council fund the purchase of the building?  Are there staff that manage the building that would be transferred to the council?  Does the clerk have the capacity and experience to manage those staff?  Who will pay for the surveys and legal costs?

If it’s a service, what contracts are there already in place, do they need to be honoured?  Will there be Transfer of Undertakings (Protection of Employment (TUPE) considerations if staff are transferred to the council?  Is the clerk up to date with employment law and do they have the capacity to manage those additional staff?

The list of questions seems endless and daunting, don’t they?  But they don’t have to.  To approach any potential asset acquisition, take a step back and follow the steps below to get a good overview of the project. 

1.    Review the use of the assets and if they are valued within the parish.

2.    Prepare a list to determine the likely outcomes if the asset was no longer provided by the principal council (risk list).

3.    Determine what powers the parish council has to take over and run the service.

4.    Consult with the community to determine what assets are really important to them (use a ranking system to get meaningful numbers).

5.    As a full council, review the ranked risk list and decide which assets (if any) the parish council should consider running in the future.

If the council is then minded to begin discussions with WNC or NNC, it should be prepared for a long process and should involve ward members.  As mentioned at the beginning of this article, the council needs to fully understand what it is potentially taking on, full and frank discussions must be had before entering into any agreement.  If you feel this is something the council wants to pursue, please get in touch and we can help steer you through the process.