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July 1, 2009

Pot calling the kettle black

The English Audit Commission has surveyed 80 local authorities and found that more than half consider that community organisations are not to be ‘trusted’ to manage property. The same audit commission also reported that only 20 percent of council finance directors have all the information they need to manage their estates

Third Sector

Audit Commission report says councils fear mismanagement and loss of income
David Ainsworth, Third Sector

More than half of local authorities are reluctant to transfer land and buildings to community organisations because they are afraid they will be mismanaged, the Audit Commission will say in a report published tomorrow.

The commission surveyed 80 local authorities to find out whether they were making the best use of land and property. Its report, Room for Improvement, will say the second most common reason for not transferring assets is a reluctance to forfeit income.

“These concerns help to explain why councils want to retain the control of transferred property through leases and licences rather than transfer of freehold ownership,” the report will say. “It may be necessary for councils to help to develop the capacity of the voluntary and community sector in order to transfer more properties.”

Two years ago the Government-commissioned Quirk Review recommended that councils transfer assets to local people to give them a bigger stake in the future of their areas.

But the spending watchdog’s report will reveal that councils have deep concerns about the ability of the voluntary sector to cope.

Most councils, it will say, have responded by offering long leases rather than ownership of property.

Almost half of councils said they had increased asset transfer since the 2007 review conducted by Barry Quirk, chief executive of Lewisham Council, on behalf of the Communities and Local Government department. But only one said the review had made a big difference to its policy. Six had never heard of the review.

Bharat Shah, deputy chair of the commission, will recommend councils draw up asset registers to show what properties are available and allow stakeholders to propose better uses for them.

The real reason charities aren’t trusted with property
Malcolm Hayday, Chief Executive, Charity Bank

So the Audit Commission has found that more than half of local authorities consider community organisations are not to be ‘trusted’ with property. Is it a coincidence that on 17 June, the Audit Commission also reported that only 20 percent of council finance directors have all the information they need to manage their estates? The words ‘pot’ and ‘kettle’ come to mind. I suspect the real reason for their reluctance to let go of their assets is that, in straitened times, councils will need every pound they can get from property sales.