The Economics of Community Asset Transfers

A common feature across community businesses in different sectors is for their business model to be heavily reliant on and/or driven by Community Asset Transfers (CATs). A CAT is the transfer of the ownership and/or management of an asset from its public-sector owner (usually a local authority) to a community organisation for less than market value. These transfers are made in order to achieve social, economic or environmental outcomes in the community in which the asset is located.

Both the community business and the CAT markets are experiencing significant levels of growth: more than 60% of councils have a CAT policy in place, and more than 70% have an up-to-date asset management strategy (Gilbert, 2016). Data on Local Authorities’ (LAs) surplus assets suggests that the potential size of the CAT market could be above £2bn, with the main opportunities concentrated in big county and city councils (Audit Commission, 2014 and NHSE, 2017).

CATs have the potential to deliver significant social and economic benefits. But the evidence on benefits delivered by CATs to date is very limited. In addition, there is limited guidance on how to develop, appraise, implement and evaluate CATs. Public authorities – typically local authorities and clinical commissioning groups – considering CAT projects need to be able to understand how best to appraise the value these projects could deliver. This report addresses this gap by providing guidance for public authorities and community businesses on developing, appraising, implementing and evaluating CATs.