Building Third Sector Capacity-Encouraging Surer Funding and Asset Transfer

Building third sector
capacity- encouraging
surer funding and asset
transfer
April 2007
Report Commissioned by the Finance Hub

Tony Rich, Asset Development Adviser
Development Trusts Association
The Finance Hub, Charities Aid Foundation, St Andrew's House,

18 - 20 St Andrew Street, London, EC4A 3AY financehub@cafonline.org
www.financehub.org.uk
The Finance Hub is delivering
to the Government’s
ChangeUp programme to
create voluntary and
community organisations
which are effective and
independent because they
are financially sustainable.
The Finance Hub

Charities Aid Foundation
St Andrew’s House
18-20 St Andrew Street
London
EC4A 3AY
financehub@cafonline.org
(020) 7832 3016

(020) 7832 3001
Development Trusts
Association
33 Corsham Street
London
N1 6
info@dta.org.uk
www.dta.org.uk
Executive Summary
Building third sector capacity-
encouraging surer funding
Introduction, context and objectives
and asset transfer
Methodology
Findings
Recommendations
Contents
1.00 Conclusions
2.00 Appendices
List of acronyms
Bibliography
3.00 Case studies
Public sector event flyer (attached)
VCS event flyer(attached)
4.00 Evaluation of training/events
Media articles
List of organisations involved
5.00
Executive Summary
6.00
Introduction, context and objectives

7.00
7.1
7.2 Methodology
7.3
7.4
7.5 Findings
7.6
7.7
7.8 Recommendations
Conclusions
Appendices
List of acronyms
Bibliography
Case studies
Public sector event flyer (attached)
VCS event flyer(attached)
Evaluation of training/events
Media articles
List of organisations involved

Executive summary
1.1 Introduction
The Development Trusts Association and Acevo working in partnership with the Local Government
Association, were contracted by the Finance Hub in April 2006 to deliver a project to improve joint
working between local authorities and the third sector, focusing on encouraging the transfer of
physical assets and good practice in surer funding and achieving full cost recovery (FCR) in delivery
of contracts.
The project was timely in that the Government had published its revised guidance to funders in May
2005 which encouraged FCR and had also initiated a working group to examine how asset transfer to
the third sector could be further encouraged. While the national policy context was becoming
increasingly benign, anecdotal evidence from frontline organisations indicated that practice among
local government remained variable and ignorance of the powers available to authorities widespread.
There was therefore a keen need to promote good practice in this area and disseminate clearly what
local authorities were able to do within the current regulatory and legal framework. The project
entailed the production of a pack of briefing papers on key issues: asset transfer, state aid policy,
publicly funded assets, full cost recovery and surer funding, together with the compilation of a
database comprising over 2,300 names of officers to whom the briefings could be distributed. Year
two of the project entailed the organisation and delivery of two series of regional seminars, one
aimed at the public sector and one aimed at the VCS.
1.2 Key findings
Need for practical, focused learning events for both sectors

Working proactively with the third sector is a new area for many within local government. The events
showed that there is demand for seminars of this kind among certain groupings of local government
officers that have not in the past normally come into contact with third sector organisations. Given the
strong emphasis in Central Government policy on working effectively with the third sector this is likely
to need to change. The events aimed at third sector organisations showed that there is a need for
practically-focused events to build capacity to acquire and manage property.
Effectiveness of targeted seminar programme

The approach of using targeted seminars to reinforce the messages as set out in the briefing papers
was successful and generally well received. Both sets of seminars were subject to delegate
evaluation. The targeting of property personnel in local authorities who would not normally attend
events on working with the third sector meant that the understanding of the needs of frontline
organisations was improved. It also meant that it was possible to discuss ways of overcoming
barriers to asset transfer with those personnel in local authorities who had the responsibility for
making it happen.
Opportunity to influence the Quirk Review

The opportune timing of the seminars and involvement of staff from the Quirk Review on asset
transfer to the third sector as speakers or attendees meant that it was possible to feed suggestions
directly to the Quirk Review team. In this way the project has been able to directly influence the
development of Government policy in a key area affecting frontline organisations.
Existence of innovative examples

Each event featured innovative regional good practice case study examples as a means of
convincing a largely sceptical officer core that asset transfer featured at the events served as good
models of either successful asset transfers or lesson learning exercises and were also fed into the
Quirk Review. Case studies are included in this report as appendix 7.3.

Disincentives to asset transfer
Specific disincentives to asset transfer exist such as the need to manage the risk of the third sector
organisation failing and needing to return the property. The fact that local authorities are complex and
multi-layered organisations and asset transfers therefore commonly take years to progress, also acts
as a disincentive to third sector organisations wishing to take on a property. The existence of a link
person between the third sector organisation and the local authority can help to deal with this
problem. The existence of many excellent examples of asset transfer, several of which were
showcased through the events, shows that there are no substantive barriers to local authorities
transferring assets, often at below market value, where there is a will to do so.
.
1.3 Recommendations
Undertake tailored discussions with individual local authorities.

The public sector seminars showed that there were local factors in operation which determined
whether an asset transfer would be likely to succeed or not (e.g. sufficient political will, capacity of
local officers and third sector organisations). The existence of such local factors indicated that one
way to be progress the transfer of assets from local authorities to the third sector would be to focus
on tackling specific barriers facing individual local authorities through individual meetings with
authorities.
Tackle widespread ignorance of legal and regulatory framework

The seminars showed that there was widespread ignorance of what local authorities and other public
sector organisations could and could not do and on how to work proactively with the third sector.
Although distribution of the five briefing papers in the pack to over 3,000 targeted public sector
officials on the database is a major contribution to dispelling this ignorance, a Government-backed
publicity campaign would also have major beneficial impact.
Continue and expand capacity building among third sector and public sector organisations
Successful asset transfers require a partnership between the local authority and third sector
organisation which continues beyond the transfer of property or land. Delegates at the regional
seminars made the point clearly that there is a need to build capacity among practitioners working in
both sectors on asset transfer.
Deal with capacity among both members and officers in local authorities
Given that many decisions on asset transfers are made by politicians in local authorities there is a
need to extend any capacity building programmes to elected members who play a role on asset
management decisions as well as relevant officers within local government.
Ensure that funding is available at the right time and in the right form to support an expansion
of asset transfer
The Third Sector-facing seminars which are based on the DTA’s publication ‘To Have and To Hold’
stress the need for different types of funding (loans, ‘patient’ capital, grants, equity finance, etc.) to be
made available in order to meet the specific needs of third sector groups and particular asset transfer
project examples.
1.4 Summaries of two case studies (expanded descriptions included in appendix 7.3)
Blacon Community Trust, Cheshire
Blacon Community Trust delivers services in childcare, education, youth work, recycling and
business support. It has been in operation 20 years and has a turnover of approximately £1million.
The Trust operates from a former primary school previously owned by the county council.
The Trust was operating in the area delivering childcare and youth services prior to the transfer of the
building. Although respected as a social business delivering valuable services at neighbourhood
level, the Trust initially had difficulty in persuading the council to transfer the building at less than

market value. Key to the success of the project was the assistance received from an employee of
the council whose main role was to act as the link person between the council and the third sector
organization and help facilitate asset transfers.
Developing an integrated base with potential for expansion was a key component of the Trust's
sustainability strategy moving from a grant dependent to an earned income footing. The move has
accordingly allowed the Trust to expand its services significantly in response to market demand, to
maximise cost efficiencies in use of accommodation and to upgrade the image and quality of its
operation.
This case study illustrates the importance of a link person working at the council who can
smooth the asset transfer process
Clowne Enterprises, North Derbyshire
The project involved the establishment of a social enterprise and a sizeable construction project that
will create a business centre to be transferred to Clowne Enterprise who will sub-let the units to local
entrepreneurs.
The council agreed to grant a 25 year peppercorn lease on the building to a suitable social enterprise
that would sub-let the building to entrepreneurs. It was agreed that the individual units would be
let at market rate to avoid future dependency on grant income.
The council provided seedcorn assistance to carrying out feasibility work and also took on the role of
developing the property and applying for necessary funding prior to transferring the asset. This
helped reassure the council that the building would develop as required and Clowne Enterprises
benefited in not having to find funding or manage the refurbishment works.
This case study illustrates the way the councils can reduce risk in asset transfer though
taking on the project management role during refurbishment of the building

2.0 Introduction, context and objectives
2.1 In April 2006 the Development Trusts Association in partnership with acevo and the Local
Government Association were contracted by the Finance Hub to deliver two contracts:
--FH5 “Working with funders and policy makers to influence positively policy and practice—
encouraging better funding practice”
--FH6 “Working with funders and practitioners to influence positively policy and practice-encouraging
local authority asset transfer”
2.2 In year one the delivery of both contracts involved producing a pack containing five briefing
papers covering asset transfer, state aid policy, ‘publicly funded assets (clawback), surer funding and
full cost recovery. It also involved building a database of over 1,200 public sector contacts which
could be used to disseminate the briefings to key officers.
Objectives
Year 2 of the contracts
FH 5
2.3 The purpose of ‘year 2’ of the project was, taking account of findings of year 1, to undertake a
programme of work to inform about, advocate and encourage good practice in the area of public
sector funding of third sector organisations.
FH 6
2.4 The purpose of ‘year 2’ is, taking account of the findings of year 1, undertake a programme of
work to raise awareness and influence local authority practice in relation to land and property asset
transfer and also to enhance the ability and capacity of the third sector to manage assets so
transferred.
2.5 Because FH 5 and 6 are so interrelated the work involved was carried out in tandem. An
interim report setting out the proposals for the programme of regional seminars to disseminate the
messages in the briefings was submitted in September. A further interim report describing progress
since that date on the delivery of the seminar programme for FH5 and FH6 was submitted in
December 2006.
Context for the work
2.6 The work involved building on existing work by the delivery partners and was in the context of
a positive policy context from Government.
2.7 In relation to encouraging better funding practice in 2004, acevo developed the publication
‘Full Cost recovery: A guide and toolkit on cost allocation.’ The toolkit has been commended by HM
Treasury and the Compact Funding and Procurement Code. In May 2006 HM Treasury published
“Improving Financial relations with the Third Sector—guidance to funders and purchasers”
2.8 In relation to asset transfer the policy context is provided by the Home Office publication Firm
Foundations which introduced the concept of Community Anchor Organisations, the ODPM
publication “Why Neighbourhoods matter” and particularly the work of a cross sector working group
established by ODPM in relation to the 2005 Labour Party manifesto commitment to encourage asset
transfer to third sector organizations. The working group published a consultative report entitled
“Communities in Control: Community Ownership and Management of Assets” on March 31st 2006.

2.9 Specific flexibilities were introduced to give public bodies the ability to dispose of assets at
less than market value (up to £2mn of “undervalue”) without needing to seek Secretary of State
permission in 2004, and in the summer of 2005, the new guidance around the flexible and
proportionate implementation of “clawback” in relation to publicly funded assets by the Director of the
Accounting Office
2.10 The overall context was also influenced by the “double devolution” debate concerning the
empowerment of neighbourhoods and the white paper on Local Government which was published in
October 2006. In particular, the White Paper announced that a review into ways of encouraging
further asset transfer from local authorities to third sector organisations would be undertaken by
Barry Quirk, chief executive of the London Borough of Lewisham. The White Paper also announced
that a £30million Asset Transfer Incentive Fund would be made available to local authorities as a
means of encouraging further transfers sometime in late 2007.
3.0 Methodology
3.1 The methodology adopted for year two of the project was to hold two series of regional
workshops, one focused on public sector funders and property professionals and another focused on
voluntary sector practitioners. The purpose of the seminars was to allow the issues explored in the
five briefings produced during year one of the project to be discussed. A copy of the briefings was
provided for all delegates attending the seminars. Messages emerging from the seminars and from
discussions with practitioners and professional societies were fed into the on-going Quirk review on
asset transfer. An attempt was also made to engage the media.
3.2 The public sector-focused events were intended to inform of the increasingly pro-third sector
nature of Government policy in this area, use examples of successful asset transfers to demonstrate
the benefits and allow discussion of ways of managing risks and eliminating perceived barriers. They
were also intended to allow discussion between participants on a range of issues covering asset
transfer and how to develop a good working relationship with third sector organisations more
generally, covering topics such as full cost recovery and surer funding. Each seminar included a
national Government speaker, a speaker from the Association of Chief Estates Surveyors, a regional
speaker and breakout sessions featuring a practical case study, a discussion on tackling barriers to
asset transfer and a session on full cost recovery. There was also an afternoon panel discussion
featuring key speakers.
3.3 The third sector-focused events were intended to allow representatives of third sector
organisations to hear from experts on acquiring, and managing property assets as well as securing
appropriate sources of funding. They were also intended to allow discussion and problem solving by
delegates. The programme for these events featured sessions on negotiating transfers, managing
and developing assets and finally securing appropriate funding.
Public sector-facing events

3.4 In order to try to influence behaviour among the public sector officers most influential in the
targeted areas of funding of third sector organisations and asset transfer the database developed
under the year one programme was used as the means of disseminating publicity for the regional
events. The leading professional officer society for local authority property managers, the Association
of Chief Estates Surveyors (ACES), was also enlisted as a partner in the events. ACES fielded a
senior speaker at each event and helped publicise them through their networks. The help of senior
officials in relevant Government Departments (HM Treasury, Office of the Third Sector, Communities
and Local Government) was also enlisted as a means of making sure the policy messages were from
the best source and to achieve local authority ‘buy in’.
3.5 The public sector-facing events themselves were a mixture of information giving and
discussion/problem-solving. Local case studies of successful asset transfer were also used as a
means of persuading officials of what was possible within the current legal and regulatory framework.
A copy of a typical programme for the event is included under appendix7.4.

3.6 There was sufficient funding available to hold a maximum of six events which necessitated
combining a number of the regions. All the events were held in venues accessible for delegates
travelling by public transport.
Venue Date Registered delegates

York 16 November 68
London 4 December 54
Melton Mowbray 31 January 63
Preston 14 February 25
Birmingham 5 March 25
Taunton 15 March 28
Third sector-facing events

3.7 The third-sector facing events on acquiring and managing a building used practitioners with
extensive experience of asset transfer and management as facilitators in order to ensure that the
messages were as practical and useful as possible. The events included maximum opportunity for
delegates to include their own examples as problems for which solutions could be sought. They were
also case-study-based.
3.8 In the case of both seminar series a decision was made to make them fee-paying but to keep
the rate low (£75 plus VAT). The decision to charge for the events was taken in order to indicate that
the events were of a high quality and to dissuade especially public sector delegates from booking on
the event and not turning up. A number of bursaries were made available for each event in order to
ensure that those unable to pay were also able to attend. In all cases the income from delegate fees
was retained by the regional staff in order to cover staff costs.
VCS event programme

Venue Date Registered delegates
Preston 20 October 20
Barnsley 2 November 32
Wolverhampton 17 November 35
Taunton 21 November 37
Thetford 22 February 2007 20
4.0 Findings
Delegate evaluation of seminar programme

4.1 Both sets of seminars were subject to delegate evaluation. The evaluation scores as set out
in appendix 7.6 show that the percentage of delegates rating the seminars ‘good’ to ‘excellent’ for the
public sector seminars varied from 50-78%. In terms of the third sector seminars the percentage of
delegates rises to between 83-100%.
Public sector seminars
Attendance at seminars
4.2 At an average of 44 per event the number of attendees at the public sector events fell short of
the target number. This was partly due to the large number of other events which are a call of office
time. It was also due to difficulties encountered in marketing events covering a potentially wide range
of issues related to working with the third sector as well as the highly topical but more specialist
subject of land and property asset transfer.
Benefits of targeted events

4.3 The targeting of property personnel in local authorities who would not normally attend events
on working with the third sector meant that the understanding of the needs of frontline organisations
was improved. It also meant that it was possible to discuss ways of overcoming barriers to asset
transfer with those personnel in local authorities who had the responsibility for making it happen. The
featuring of practical case studies of successful asset transfers (often with the local authority contact
co-presenting with the third sector representative) also meant that local authority property officers
were able to see examples of transfers that had worked.
Existence of disincentives to asset transfer

4.4 A recurring theme of discussions at the events as illustrated by the featured case studies was
the existence of specific disincentives to asset transfer such as the need to manage the risk of the
third sector organisation failing and needing to return the property. In addition, the fact local
authorities are complex and multi-layered organisations and asset transfers therefore commonly take
years to progress also acts as a disincentive to third sector organisations wishing to take on a
property. The existence of a link person between the third sector organisation and the local authority
can help to deal with this problem.
Opportunity to influence the Quirk Review

4.5 The opportune timing of the seminars and involvement of staff from the Quirk Review as
speakers meant that it was possible to feed suggestions directly to the Quirk Review team in order to
tackle the barriers/disincentives such as those outlined above. Examples of the suggestions that
arose during discussions at the events include:
 The need for a local authority officer role to operate between the third sector and the council
 The benefits of local authorities undertaking area reviews of their property resources
including assessing the options for management or ownership by the third sector.
 The need for local authorities to have a policy on under-value disposals to the third sector
 The increasing need to adopt approaches for quantifying or otherwise measuring the
benefits of asset transfers to third sector organisations as opposed to market disposal
4.6 These examples of positive suggestions and others were fed to the Quirk Review team in
time for consideration in the final report.
Existence of innovative examples

4.7 The existence of many excellent examples of asset transfer, several of which were
showcased through the events, shows that there are no substantive barriers to local authorities
transferring assets, often at below market value, where there is a will to do so. The regional good
practice case study examples that featured at the events served as good models of either successful
asset transfers or lesson learning exercises and were also fed into the Quirk Review. Case studies
are included in this report as appendix 7.3
Press coverage
4.8 In terms of press coverage for the events Regeneration and Renewal journal was media
partner for the events and produced a short article following the London seminar (reproduced as
appendix 7.7).
Third sector orientated seminars
Attendance at seminars
4.9 The third sector-facing seminars were designed to be smaller in scale than the pubic sector
ones. An average attendance of 28 was therefore what was anticipated.
Key points from seminars
How to access good advice

4.10 Third sector organizations taking on a building need to be able to access good professional
advice. The DTA publication –‘To Have and to Hold’ provides good guidance on what sort of advice
is needed and how to make the most of professionals. However there is also a need for readily
available advice on particular schemes, etc.
How to access suitable funding

4.11 The need for funding at different stages in the process was clear. Guidance on how to access
funding for acquisition, refurbishment, etc. would be invaluable to third sector organisations.
How to negotiate with Local Authorities

4.12 Third sector organisations stressed their concerns to ensure the local authority kept to
agreements regarding the transfer of buildings.
How to manage the detailed practicalities of building management

4.12 Third sector organisations did not normally become established to acquire and manage
buildings and the skills involved in the process of building management had to be learnt. There was a
need to avoid ‘mission creep’ and to prevent the organisation becoming distracted from its core aims
and objectives.
Developing capacity within third sector

4.13 A general need was identified to develop the capacity of the sector across a range of skill sets
and competencies involved in acquiring and managing buildings.
5.0 Recommendations
Undertake tailored discussions with local authorities.

5.1 The public sector seminars showed that there were local factors in operation which
determined whether an asset transfer would be likely to succeed or not (e.g. sufficient political will,
capacity of local officers and third sector organisations). The existence of such local factors indicated
that one way to be progress the transfer of assets from local authorities to the third sector would be
to focus on tackling specific barriers facing individual local authorities. It is suggested that a
programme of ‘surgeries’ targeted at individual local authorities interested in transferring assets to the
third sector be undertaken.
Tackle widespread ignorance of legal and regulatory framework

5.2 The seminars showed that there was widespread ignorance of what local authorities and
other public sector organizations could and could not do. Although distribution of the five briefing
papers in the pack to over 3,000 targeted public sector officials on the database is a major
contribution to dispelling this ignorance, a Government-backed publicity campaign would also have
major beneficial impact.
Continue and expand capacity building among third sector and public sector organizations
5.3 Successful asset transfers require a partnership between the local authority and third sector
organisation which continues beyond the transfer of property or land. Delegates at the regional
seminars made the point clearly that there is a need to build capacity among practitioners working in
both sectors on asset transfer.
Deal with capacity among both members and officers in local authorities
5.4 Given that many decisions on asset transfers are made by politicians in local authorities there
is a need to extend any capacity building programmes to elected members who play a role on asset
management decisions as well as relevant officers within local government.

Ensure that funding is available at the right time and in the right form to support an expansion
of asset transfer
5.5 The Third Sector-facing seminars which are based on the DTA’s publication ‘To Have and To
Hold’ stress the need for different types of funding (loans, ‘patient’ capital, grants, equity finance, etc.)
to be made available in order to meet the specific needs of third sector groups and particular asset
transfer project examples.
6.0 Conclusions
6.1 The project was very timely and allowed the key messages in the briefing papers produced in
year one to be aired with a cross-sector audience. Through use of a bespoke database the project
was also able to successfully target the key officer groups within local authorities. The wide-ranging
spread of issues dealt with by the project meant that it was difficult to market the regional seminars in
a focused way and this had an impact on the numbers attending the events.
6.2 The many good case studies showcased through the public and third sector-facing seminars
indicate that in terms of local government the necessary legal and regulatory powers to enable asset
transfer are in place.
6.3 There is a need to spread good practice on asset transfer around the country, building on the
imminent publication of the report of the Quirk Review. A next stage programme could usefully focus
on implementing the recommendations of this project as outlined above. Suggested approaches
include: undertaking a programme of intensive ‘surgeries’ for local authorities already thinking of
asset transfer, further marketing of current powers available to local authorities to transfer assets,
liaison with professional officer groups in order to reach the necessary decision-makers with councils
and training for elected members with responsibility for asset transfer.
6.4 A programme of further capacity building on acquiring and managing assets should be
undertaken for practitioners in both the public and third sectors.

7.0 Appendices
7.1 List of acronyms
VCS – Voluntary and Community Sector

ODPM – Office of the Deputy Prime Minister
Acevo – Association of Chief Executives of Voluntary Organisations
DTA –Development Trusts Association
FCR –Full Cost Recovery
7.2 Bibliography
Urban Land Institute (2006), Ten principles for creating value from local government property
HM Treasury (2004), Report of the 2004 Spending Review
Pulse Consultants (2004), Asset Transfer Research Final Report for Bristol City Council
Department of Trade and Industry (2003), Social enterprise: a strategy for success Citizen
ODPM and Home Office (2005), Engagement and public services: Why Neighbourhoods Matter
ODPM and the Home Office (2006), Communities Taking Control: Final Report of the cross-sector
work group on community ownership and management of assets

7.3 Case studies
Asset transfer case study examples – April 2007
1. Halifax Opportunities Trust and Elsie Whiteley Innovation Centre, Halifax West Yorkshire
What the project did

Halifax Opportunities Trust was established as a community-based regeneration charity in Halifax
West Yorkshire in 2000. The Trust activities include providing managed workspace for start up and
established enterprises, providing business support, training, helping people into employment and
managing a Children’s Centre. .
This case study concerns the acquisition and development by the trust of its second managed
workspace the Elsie Whiteley Innovation Centre. The centre was developed in response to a need
identified for high quality intensive business support which also helps meet the Trust’s regeneration
objectives and be economically sustainable.
How the project did it

The Elsie Whiteley building was identified by Calderdale Council and Halifax Opportunities Trust as a
potential business innovation centre in 2002. The proposal was taken to Yorkshire Forward as a
scheme for their Urban Renaissance programme. They paid for the purchase of the redundant Mill
and an adjoining haulage yard to provide car parking as well as making a significant contribution to
the cost of refurbishment. Other monies came from the local Urban 11 programme and Calderdale
Council's section 106 (planning gain) money. Total cost of purchase was in excess of
£5m. Yorkshire Forward passed the building to the ownership of Calderdale Council rather than the
Trust because of concerns all parties had over conflicts with State Aid policy. Advice was sought
widely but was unclear. As a result, agreement was reached that on completion of refurbishment (to
be managed by the Council) the Centre would pass over to Halifax Opportunities Trust on a 25year
lease on a peppercorn rent basis. Halifax Opportunities Trust was fully involved in the development
and design of the building through all of its stages and has been responsible for the business plan for
the centre.
Why the project did it

The Trust took over the building on 1st October 2006 and put a team of staff in place, which currently
number five. One of the floors has already been let to an intermediate labour market organisation,
and another two floors contain 40 business units with generator, incubator and move on space all in
the same building. Three floors have been let to AIM (UK) a sector lead body commissioned by the
RDA and the Dti to establish the National Centre for AIDC (Automatic Identification and Data
Capture) in the Centre. There are also conference and meeting facilities in the building and plans for
a cafe in the summer of 2007.
The trust has a management agreement as well as a the 25 year lease with the local authority and
the deal is that 15% of the rental income comes to the Trust as a management fee but any surplus
the scheme makes is re-invested in facilities and services in the Centre to keep it fresh and up to
date.
Recommendations and lessons learnt

In order to overcome the barriers encountered such as risk aversion on behalf of funding agencies,
legal issues such as State Aid policy and scepticism the following traits were required:
 To have a long-term vision and stick to it
 To have the courage to take risks in order to achieve the vision,
 To develop trust of the necessary stakeholders
Contact: Barbara Harbinson: barbarah@regen.org.uk

www.innovationhalifax.net
2. West Itchen Community Trust, Southampton

West Itchen Community Trust is a company limited by guarantee which was established in 2002 as
the exit vehicle for an SRB programme. In addition to raising funds, the Trust aims to take forward
the regeneration work begun under the SRB programme. The problems experienced in the area are
many but the Trust feels that the main ones are as follows:
 Low image of the area
 Low self-esteem felt by some residents
 A local economy that is not working well
 A poor environment in places

At the beginning of the programme the Trust was gifted £600,000 worth of property and received a
grant of £1.18M from the South East England Development Agency (SEEDA). The asset transfer
element of this began in October 2002 when Southampton City Council agreed to transfer two
commercial sites but this took some months to complete as it had to go through ODPM. As the Trust
was due to launch in March 2003 (and intended having an employee) this delay risked a cash-flow
crisis. To ease the situation council officers agreed to pay the Trust the rental income from the soon-
to-be-vested properties from the date that the transfer was agreed. From March 2003 until March
2004 the Trust set about using the SEEDA grant to acquire and renovate local commercial
property so as to generate an additional income while improving the economic environment within
this disadvantaged area. This legacy continues to be the foundation stone of WICT.
The property income accounted for 60% of income in 2005/06 and is steadily increasing as the
portfolio is developed. In 2007/08 the property portfolio is forecast as generating 80% of total income.
In that year 100% of income which will be raised through enterprise.

Aside from its role as a property developer the Trust is a local infrastructure body offering support to
local businesses and the third sector. Since its creation the Trust has given one-to-one
business coaching to over 50 local people, helped start 12 new businesses (which created 20 new
jobs), and supported a further 12 existing businesses. We have also just purchased and developed a
retail incubator for four new businesses to begin trading within and are offering support to the local
market, including undertaking renovations, and installing festive lighting! The Trust has also provided
one-to-one coaching to approximately 40 voluntary groups and assisted them in levering in approx
£350,000 of funding for projects in the local community. Finally the Trust offers additional financial
support by sponsoring community events, running a small grants fund, and offering interest free
loans to local businesses. As the Trust will shortly be 100% sustainable this level of support can be
offered in perpetuity.

 In commencing a regeneration programme there is always a need to consider the exit
strategy which could involve taking on an asset and becoming sustainable through
generating a surplus
 Third sector organisations should choose a proactive/pragmatic partner to develop an asset-
based business strategy with
 There is a need to establish a trusting relationship with stakeholders which continues over
time
 Organisations should seek a wide leverage of funding to maximise the opportunities for
financial sustainability
Contact: David Newton: d.newton@wict.co.uk

3. Renewal Trust, Nottingham

The Renewal Trust was formed in inner city Nottingham as part of City Challenge Exit Strategy. The
Trust aims aim to bring about improvements in the quality of life of the communities of St Anns and
Sneinton by supporting and promoting activities to renew the area socially, economically,
environmentally and 'in Spirit'.

Nottingham City Council transferred an old school complex in the St Anne’s area to the Trust in 2000
with annual revenue budget to create the Sycamore Centre Complex. Facilities at the complex now
comprise a youth and community centre, a refurbished sports hall and a business centre. The
business centre, now known as the John Folman Business Centre, and run by a separate trading
subsidiary, has 18 units which are fully let and provides an annual gift aid surplus which is used to
support the Trust’s wider work in the area. Two years ago the Trust established a second Business
Centre again operating under the Hungerhill Trading Ltd Company. The first centre is subject to
leasehold under a ‘peppercorn’ rent from Nottingham City Council. The second business centre – the
‘Renewal Trust Business Centre’, is a freehold property, which was purchased using two strands of
European funding that were also used to refurbish and extend the property. There is a funding
agreement in respect of this property whereby the funding bodies receive a proportion of any surplus.
The Trust’s activities have also expanded dramatically in recent years and now include a Business
Advice Team, Employment and Benefit Advisors, a Detached Youth Team, a Learning Champions
Team and several Outreach Workers with varying responsibilities.

Quantifiable benefits include:
 £120,000 SME grants fund per annum

 £250,000 rolling loans programme
Example of use of Renewal Trust property - Hungerhill Trading Ltd.

Hungerhill Trading Ltd. Is a property managing subsidiary of the Renewal Trust. A stated aim is that
any surplus from the operation of the company will be utilised to support the Trust’s wider charitable
aims. In 2004 £10,500 was transferred by way of a Gift Aid donation from Hungerhill Trading Ltd. to
the Renewal Trust. The funds were used particularly to support the Trust’s work with young people.

• Funding applications and the decisions on them generally take longer than anticipated.
• A trading subsidiary was established to reduce reliance on grant and European funding
and look to the long term sustainability of the Trust. The Trust looks to expand its areas of
business that will achieve the same overall aim of the proejct.
• Maintain tight control of capital build projects to ensure no time or budget overruns.
Contact: Wayne Cryar: wayne@renewaltrust.org.uk

4. Goodwin Development Trust Limited, Hull

During 1993 the Goodwin Resource Centre Association, as GDT was then known, (it incorporated in
2002) occupied a Council double shop unit in a 1960’s inner city estate parade of shops. In the
middle of the estate was a former Council Old People’s Home. Being no longer fit for purpose it was
closed and a security programme put in place at an annual cost of £30,000 to the local authority.
Goodwin persisted and with local Councillor support convinced the Council to transfer the “asset” to
the charity. Agreement was reached on a 125 year lease at £1pa provided that the “Goodwin Centre”
was used for community benefit. Covenants are in place to this effect.

Using mainly SRB and ERDF Goodwin refurbished the building at a cost of £375,000 and opened for
serious business in September 1999. The success of this development gave the Trustees and staff
the confidence to address and lead on other issues with new policy ideas. These included:-
1. A community Warden scheme for the estate with six staff which has now expanded to cover
the whole city and is financed through a five year £3m pa contract with the Council
2. 2 Sure Start programmes as lead and accountable body which focused on young children –
with the change in Government policy towards Children’s Centres the Trust has built 3 new
facilities which form part of a separate contract with the Council worth £1.5m pa.
3. A £5m development featuring a Council Customer Service Centre, PCT Medical Centre, 67
place nursery, offices and conferencing facilities. This building was erected on land acquired
from the Council on identical terms to the Goodwin Centre. The Octagon, generates over
£0.5m pa.

Over the last seven years as a direct and indirect result of the transfer of a council “asset” Goodwin
has grown into a multi-million pound a year business with assets approaching £10m. Staff numbers
currently total 341, of which 75% come from Hull itself. According to Chamber of Commerce figures
the Trust is one of the city’s major employers.

 The need for perseverance in pursuing asset transfer opportunities
 The need to be able to operate in a highly competent and professional way and to buy in
technical help where necessary
 A recommendation that more local authorities take a positive approach to asset transfer as
this is what the Government is now encouraging them to do
Contact: John Illingworth JohnI@goodwin-centre.org

5. All Saints Action Network, Wolverhampton

All Saints Action Network is a community based charitable company operating as a development
trust in All Saints, Wolverhampton. The organisation has been established to regenerate the area
with three main objectives: improving local services, training and capacity building and enterprise
development. An explicit aim of the organization which has a turnover of £1million and a workforce
of 30, is to establish a community owned asset base.

ASAN acquired a former school surplus to local authority requirements. The buildings comprised
approximately 12000 square feet and included a variety of spaces. The project suffered from very
protracted negotiations with the local authority due to uncertainties regarding funding.
The proposal is to establish a learning hub in partnership with the City Council, together with a
women’s resource centre, workspace for community enterprises and seminar and meeting space.

The project was initially intended to save a redundant and create new services. The organisation
undertook feasibility work which showed that the scheme could work. In addition, other partners were
interested in the schemes and funders were keen to support it. The project will create jobs and
enable ASAN to develop income.
ASAN is currently negotiating with a contractor in order to undertake refurbishment in three phases
that will last one year. A new biomass heating scheme will develop the organisation’s skills in
recycling and renewable energy development. The workspace is due to open for business on 1
January 2008.

There are five key lessons from the project:
 Acquiring and refurbishing an asset takes a long time

 It is important to have finance available to undertake feasibility work and other research
activity
 It is necessary to be focused and tough and not give up
 The funding package is very complicated
 It is important to develop strong relations with key partners
Contact: Mike Swain mike.s@asan.org.uk

6. Wolseley Community Economic Development Trust, Plymouth

Wolseley CEDT emerged in 1994-96 from the large-scale redevelopment of a derelict area of inner
city Plymouth. The original need in the areas was for employment, facilities and new business
opportunities. The opportunity was provided by the acquisition of a derelict site together with
development funding. While the obvious use for the site was new housing the vision of local people
was for business use to meet the economic needs of the area.
The trust is a membership organisation with 500 plus members who elect the majority of its
management board. He board has nine community resident directors and three local business
directors elected by the membership.
The Trust ran a community capacity-building phase from 1995 to 1996 which allowed community
involvement to be operated successfully. Following a period of skills training a shadow board was
formed which evolved into a an elected management board in November 1996.

The main partnership continues to be with Plymouth City Council which owns the sites on which the
trust operates. In 2000 the city council transferred derelict land and buildings to the trust on a 25 year
lease to develop and manage two business parks, a healthy living centre and a community resource
building. The City Council also provides direct financial support and in-kind officer support for various
joint activities. In addition, city councillors also sit on the trust’s board. The newer Scott Business
Park has 35 units and completely let.
The ethos on which the trust operates is to use its trading arm to financially support its community
activities – in 2005/06 the trading arm raised £120,000 in financial support and more than £50,000 in
in-kind support.
The Trust manages two business parks and two community centres worth approximately £10million.
The trust has a turnover of £950,000 per annum, with trading comprising £620,000 a year. The Trust
provides £150,000 in direct financial support for community activities.
The project was made possible by two major injections of funding from ERDF and SRB over a nine
year period.
Economic benefits
The Trust has supported the creation of over 650 jobs –most created by tenants of the business park.
The creation of local employment is strongly encouraged by the trust.
Other benefits
The model of community-run regeneration epitomised by the trust’s management by a community-
dominated board underpinned by asset ownership and management has enabled sustained
improvements to a deprived area of the city.

 Have two ‘faces’ – professional and business-like with customers but soft and accountable
with community and partners
 Develop your own systems with ‘just enough’ complexity that are non-bureaucratic
 Asset-base development requires that assets are viable for the aims
 Aim high and to be good at everything but seek professional help when necessary
Contact: Peter Flukes: peter@wolseley-trust.org

7. Blacon Community Trust, Cheshire

Blacon is a housing estate on the edge of Chester situated within the 10% most deprived wards in
England with a population of 18,000.
The Community Trust delivers services in childcare, education, youth work, recycling and business
support. It has been in operation 20 years and has a turnover of approximately £1million.
The Trust operates from a former primary school previously owned by the county council. The
building is 6,000 square foot in size and when transferred required considerable investment. It had no
alternative use.

The Trust was operating in the area delivering childcare and youth services prior to the transfer of the
building. Although respected as a social business delivering valuable services at neighbourhood
level, the Trust initially had difficulty in persuading the council to transfer the building at less than
market value. In order to acquire the building the project went through various stages in order to
convince the local authority that the organisation was a valid partner and the building should be
transferred to the Trust at nil cost. In the end the Trust settled for a 7 year lease at nil cost although
still harbours a long-term intention to own the building outright. Key to the success of the project was
the assistance received from an employee of the council whose main role was to act as the link
person between the council and the third sector organisation.

Developing an integrated base with potential for expansion was a key component of the Trust's
sustainability strategy moving from a grant dependent to an earned income footing. The move has
accordingly allowed the Trust to expand its services significantly in response to market demand, to
maximise cost efficiencies in use of accommodation and to upgrade the image and quality of its
operation. As an indicator, the Trust has doubled its income over the past couple of years and
moved consequently from 80% to just 20% grant dependency.

 Given the involvement of potentially many different officers from the local authority there is a
need for one person who works within the council to coordinate the local authority response.
 Recruit champions and advocates early on
 Make the business case from day one and draft a comprehensive business plan
 Work with both junior and senior staff to ensure that all decision makers and influencers are fully
onside
 Forget about negotiating terms until later stages - trying to drive a bargain too soon will tend to
jeopardise the deal
 Be clear about your rights in terms of policy and legislation on asset transfer
Contact: John Every: john@blacon.org.uk

8. Millfields Community Economic Development Trust, Plymouth
Millfields Trust is a not-for profit company set up to allow local people to contribute to the
regeneration of a part of Plymouth (St Peters Ward) and participate in the management of the
process. Members of the board include local residents and representatives of the tenants and the
city council.
In the spring of 2000 the Trust was granted a 25 lease on three buildings within the Millfields
Complex (a former Royal Naval hospital) by Plymouth City Council which it converted to provide 36
workshop units. Within 15 months these units were fully let. The city council also offered the trust the
opportunity to take on the former Jaeger factory when it closed in 1998. The building was refurbished
between March 1999 and February 2000.
Occupancy levels within the building have not dipped below 90% over its first 18 month period. In
2005/6 the building had a turnover of £400,000 and employed five staff.
Phase three of the work of the trust will involve developing a new building on land acquired from St
Dunstan’s School in Mary Seacole Road. The new building will provide 10,000 square feet of
workshop accommodation.

The city council helped the Trust acquire both the Millfields buildings and the former Jaeger building
by granting 25 year ‘peppercorn’ leases. The buildings were refurbished using a mixture of grants. In
the case of the former Jaeger building refurbishment costs amounted to £1.65 million. In the case of
the building in Mary Seacole Road the build costs of approximately £1million are to be financed by a
mixture of grants (including European Regional Development Fund), loans and contributions from the
trust. The new building will provide the trust with its first freehold building.

Benefits – economic
131 companies have taken space with the trust over the past six years. There are currently 56
tenants which together employ over 200 people. Income generated over the past year totals
approximately £400,000.
The tenants also trade with each other and with the local community. One company alone has within
the last year estimated that it has put £1million in the local community. The income from lettings
supports the Trust’s work and allow it to support a number of SMEs and invest over £40,000 in local
community organisations over the past 5 years.
Lessons/recommendations
 The trust operates as a ‘community anchor’ on behalf of the local community and is regularly
consulted on regeneration matters.
 The successful management of property assets by a community demonstrates that a
community organisation can ‘run assets’.
 More local authorities should respond positively to community enterprises that have robust
proposals to acquire and manage property as the project has demonstrated that this can
serve to generate sustainable wealth for the local community
Contact: Roger Pipe: rogerpipe@millfieldstrust.com.

9. Moseley Community Development Trust, Birmingham

Moseley CDT is an independent charity and company limited by guarantee founded in 2001. In the
same year the trust purchased a former post office sorting office after searching for an empty shop
building from which to operate. The village of Moseley was seen by the Trust as fragmented and
lacking facilities, especially local retail. The aim of the Trust is to lead the regeneration of the
neighbourhood through social, economic and environmental projects. It aims to be financially
sustainable. The principles under which the Moseley CDT operates are:
• Focused on the neighbourhood of Moseley situated four km south of Birmingham

• Under community control
• Tackles the whole picture
• Not for private profit
• Working towards financial independence
The Trust operates from a Moseley CDT board is made up of 13 people including four elected from
the community at the AGM.

The Trust uses its building to pursue its objectives through acting as a base for community groups to
find resources and support for their activities, as well as using the building to generate an income.
Moseley CDT was not able to negotiate with a public body when purchasing its asset, since there
were few available in the neighbourhood. MCDT had to raise the funds from a charitable trust and at
the same time negotiate with a private property developer to secure the old Post Office building.
Why the project did it (impact)

Economic impact
Research carried out by University of Central England as part of Social Accounting exercise
completed in 2005 showed that the Trust’s activities were having a positive impact on the daytime
economy in Moseley through its tenants and room hire facilities. The Trust’s work in developing a
creative cluster as a medium term initiative should also have beneficial impact.
Other benefits
Moseley CDT acting as a community anchor has benefited many local projects, in particular the
Moseley Street Wardens has had a positive impact on the local environment and is greatly valued by
residents.
Recommendations and lessons
• City council were unaware of the potential benefits of asset transfer and took a very
different approach to asset use
• The development trust lacked the right skills at the outset
• The Social Accounting exercise showed that the Trust needs to work harder to raise
awareness about its purpose and develop new services (e.g. on health) for the local
community in order to meet its aim of contributing to the comprehensive regeneration of the
area.
• The Trust needs to find additional resources to map, monitor and measure its
economic impact
Contact: Tony Thapar: tonythapar@hotmail.com

10. Clowne Enterprises, North Derbyshire

The project involved the establishment of a social enterprise and a sizeable construction project that
will create a business centre to be transferred to Clowne Enterprise who will sub-let the units to local
entrepreneurs.
The business accommodation project followed on from significant Clowne town centre regeneration
already undertaken by the district council with Market Towns funding, where the need for business
accommodation within Clowne in order to promote start up enterprises and foster
entrepreneurship was identified. The idea of business accommodation managed by a social
enterprise was brought to the council by a BizzFizz coach. The building, 2 Station Road, was
formerly used as sheltered accommodation under the jurisdiction of the Housing Department.

At a full council meeting it was agreed to grant a 25 year peppercorn lease on the building to a
suitable social enterprise that would sub-let the building to entrepreneurs. Clowne Enterprises was
formed as a social enterprise company limited by guarantee. The Director of Clowne Enterprise
worked closely with the council’s Economic Development & Business Co-ordinator in order to ensure
that the business was sustainable. It was agreed that the individual units would be
let at market rate to avoid future dependency on grant income.
£15,000 of seedcorn funding was obtained to undertake feasibility work and surveys. This was
helpful in reducing potential risks. The council also took on the role of developing the property and
applying for necessary funding prior to transferring the asset. This helped reassure the council that
the building would develop as required and Clowne Enterprises benefited in not having to find
funding or manage the refurbishment works. Clowne Enterprises were fully involved in decisions on
design, etc and an open and communicative relationship was maintained.

The project represents the first of its kind for the council. While good progress is being made it is too
early to measure the benefits for customers, organisation, etc. If it succeeds, it is likely to lead to
further asset transfers. While asset transfer was not an original aim for the building it is now being
considered as a viable option in the future.

• Maintain good and open communication
• Use strategies to reduce risk and avoid third sector organisations being side-tracked, e.g.
through the council taking on management of the technical aspects of the project
• Successful projects need to have shared ownership by all main parties
Contacts
Joanna Favill, Bolsover DC: Joanna. favill@bolsolver.gov.uk
Paul Davies, BizzFizz: paul@bizzfizz.org.uk+
Appendices 7.4 and 7.5 are attached

7.6 Evaluation of training/events
Evaluation of the seminars by delegates

Delegates were asked to complete evaluation forms at the end of both sets of seminars.
Pubic sector events

Venue Date % rated ‘good’ or above
York 16 November 67
London 4 December 51
Melton Mowbray 31 January 59
Preston 14 February 50
Birmingham 5 March 78
Taunton 15 March 59
Delegate quotes
‘Useful – I came for information, and I’m going back a bit more aware and with questions about local
activity’.
(delegate at London event)
‘Networking was valuable’
(delegate at Melton Mowbray event)
Third sector events
Venue Date %rated ‘good’ or above

Preston 20 October 100
Barnsley 2 November 100
Wolverhampton 17 November 97
Taunton 21 November 91
Thetford 22 February 2007 83
Delegate quotes
‘Very relevant, well structured and presented clearly with enthusiasm and obvious ‘hands on
experience’ of the subject area’ – An enjoyable informative day’
(Thetford event)
‘Extremely helpful and informative event – excellent and authoritative speakers
(Barnsley event)
‘I found the whole event empowering, informative and above all specific and targeted at all my
organisations needs – well done’.
(Wolverhampton event)

Appendix 7.7 Press article
Appendix 1
Councils are 'reluctant' to transfer public assets
Alexandra Coxon, Regeneration & Renewal - 08 December 2006

Councils are reluctant to transfer assets to local communities, a government review will find.
Speaking this week at a seminar, Debbie Edwards, policy adviser for the Cabinet Office's Office of the Third
Sector, said that the Quirk Review of community ownership and management of assets has so far found that
councils feel that "there are only risks and no benefits" in transferring assets to communities.
The review, headed by Barry Quirk, chief executive of the London Borough of Lewisham, was launched by
communities’ secretary Ruth Kelly in September to consider whether further powers are required to boost the
transfer of public land and buildings to community ownership (R&R, 22 September, p3).
Edwards said that other barriers to community ownership include a lack of funding, and financial disincentives,
such as state aid rules, rising rent levels, rising costs, and lack of time to bid.
The review also unearthed a lack of management capacity in certain community groups, which may deter them
from taking on assets. "A lot of organisations worry about the impact of taking on an asset on their balance sheet
when they might not necessarily be equipped to manage it," said Edwards.
But Development Trusts Association director Steve Wyler said: "While all these things are true for some local
authorities, we are coming across examples where councils are taking a much more positive position. We think it's
a pretty mixed picture."
The review, which will be published in the spring and be followed by an action plan, is likely to call for stronger
partnerships between the public sector and voluntary sector, Edwards added.
- To contribute to the review, contact Robin Lee on (email) robin.lee@communities.gsi.gov.uk
Appendix 7.8 List of organisations involved
Development Trusts Association (www.dta.org.uk)

Association of Chief Executives of Voluntary Organisations (ACEVO) (www.acevo.org.uk)
Local Government Association (www.lga.gov.uk)
Royal Institution of Chartered Surveyors (www.rics.org.uk)
Royal Town Planning Institute (www.rtpi.org.uk)
Department of Communities and Local Government (www.communities.gov.uk)
HM Treasury (www.hm-treasury.gov.uk)
Office of the Third Sector (www.cabinetoffice.gov.uk/third_sector)


Building Third Sector Capacity-Encouraging Surer Funding and Asset Transfer

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Building third sector

Report Commissioned by the Finance Hub

The Finance Hub, Charities Aid Foundation, St Andrew's House,

The Finance Hub

(020) 7832 3016

Introduction, context and objectives

The Finance Hub, Charities Aid Foundation, St Andrew's House,

1.2 Key findings

Need for practical, focused learning events for both sectors

Effectiveness of targeted seminar programme

Opportunity to influence the Quirk Review

Existence of innovative examples

The Finance Hub, Charities Aid Foundation, St Andrew's House,

Undertake tailored discussions with individual local authorities.

Tackle widespread ignorance of legal and regulatory framework

Blacon Community Trust, Cheshire

The Finance Hub, Charities Aid Foundation, St Andrew's House,

Clowne Enterprises, North Derbyshire

The Finance Hub, Charities Aid Foundation, St Andrew's House,

Year 2 of the contracts

Context for the work

The Finance Hub, Charities Aid Foundation, St Andrew's House,

Public sector-facing events

The Finance Hub, Charities Aid Foundation, St Andrew's House,

Venue Date Registered delegates

Third sector-facing events

VCS event programme

Delegate evaluation of seminar programme

Public sector seminars

Benefits of targeted events

Existence of disincentives to asset transfer

Opportunity to influence the Quirk Review

Existence of innovative examples

Third sector orientated seminars

Key points from seminars

How to access good advice

How to access suitable funding

How to negotiate with Local Authorities

How to manage the detailed practicalities of building management

Developing capacity within third sector

Undertake tailored discussions with local authorities.

Tackle widespread ignorance of legal and regulatory framework

The Finance Hub, Charities Aid Foundation, St Andrew's House,

The Finance Hub, Charities Aid Foundation, St Andrew's House,

7.1 List of acronyms

VCS – Voluntary and Community Sector

The Finance Hub, Charities Aid Foundation, St Andrew's House,

Asset transfer case study examples – April 2007

What the project did

How the project did it

Why the project did it

Recommendations and lessons learnt

Contact: Barbara Harbinson: barbarah@regen.org.uk

What the project did

How the project did it

Why the project did it

Recommendations and lessons learnt

Contact: David Newton: d.newton@wict.co.uk

The Finance Hub, Charities Aid Foundation, St Andrew's House,

What the project did

How the project did it

Why the project did it