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Local Government Finance

Volume 487: debated on Wednesday 28 January 2009

To ask the Secretary of State for Communities and Local Government under what circumstances a local council may transfer assets to community organisations. (250753)

Local authorities’ power to dispose of surplus assets at less than best consideration is governed by the General Disposal Consent 2003 under the Local Government Act 1972. This provides that an authority will not be required to seek specific consent from the Secretary of State for the disposal of land or buildings which the authority considers will help it to secure the promotion or improvement of the economic, social or environmental well-being of its area as defined in the Local Government Act 2000, and where the ‘undervalue’ (the difference between the unrestricted value of the interest and the consideration accepted) is less than £2 million.

A local authority will need to demonstrate that the tangible and intangible community benefits accruing from the disposal at less than best consideration outweigh the opportunity costs of not pursuing other options, including the capital receipt that could be obtained from open market sale. The authority will also need to ensure it holds the land under correct powers, that the disposal does not contravene state aid regulations, and that it has obtained a realistic valuation.