The Economics of Community Asset Transfers: Pro Bono Economics provides support to Power to Change

12 Dec 2017

Power to Change (PtC) is an independent trust, established as a ten-year initiative in 2015 to support and develop community businesses across England. It was set up in response to growing recognition of the challenges faced by communities in maintaining vibrant local places with access to shops and services, opportunities for employment and skill development, a strong local fabric and a sense of positive future. Core to this is a recognition of community business as a new model for local change, and all of PtC’s programmes are directed to achieving this.

A key aspect of Power to Change's work is the implementation of Community Asset Transfers (CATs): the transfer of the ownership and/or the management of an asset (typically public land or buildings) from its public sector owner (usually a local authority or a clinical commissioning group) to a community organisation (often a community business) for less than market value, in order to achieve social, economic or environmental outcomes in the community in which the asset is located. Whilst widespread, with over 60% of councils having a CAT policy in place, the evidence on such policy is limited. To this end, Power to Change approached Pro Bono Economics to create an economic guide to CATs, consisting of a framework for their development, appraisal, implementation and evaluation.

Pro Bono Economics matched Federico Bruni, Robert Marks, Stuart Newman and Vyara Ruseva to this project, all of whom work in economics in governmental departments. We would like to thank them for the effort and expertise they put into this report.

The report starts by setting out an economic framework for CATs, providing thorough guidelines on identifying the rationale for change, setting objectives, creating options, analysing options, implementing and monitoring options and evaluation and feedback. Following this, the report offers detail on defining social value, through the 2002 Social Value Act and then through the lens of government, community businesses and academia. Finally, a concise guide on measuring social value is presented, which takes the reader through several methods of evaluation and their strengths and weaknesses: Cost Benefit Analysis (CBA), Social Return on Investment (SROI), Three-Stages Wellbeing Valuation (3SWBV) and Valuing Worth Social Value Tool (VWSVT).

The report is intended for anyone wishing to implement a Community Asset Transfer, and we are excited to be providing new evidence to help further the development of communities across the UK.

Sir Alan Budd, patron of PBE and reviewer of this report, stated: 

"I am extremely excited about the potential results of the practical application of the findings of this report and commend Pro Bono Economics for mobilising its highly skilled, professional volunteers in pursuit of such an interesting and pertinent cause."

Vidhya Alakeson, Chief Executive of Power to Change, commented:

“At a time when many parts of the country face cuts, neglect and social problems, Power to Change wants to make sure local areas survive and stay vibrant. This report will help local communities to grow and flourish, even in a rapidly changing economic climate. It is time for them to stimulate activity, regeneration and growth by harnessing the value of assets that might otherwise be left empty or unused.

Local authorities such as Leeds, Bristol and Oldham are increasingly seeing CATs as a way of both reducing the cost of public assets and of protecting assets for the future. While sustaining service delivery, they can pursue wider goals such as regeneration, community development and inclusion.

We hope that this excellent framework will encourage more local authorities to engage with CAT, and promote best practice among those that already do. It will also prove invaluable for community businesses which are hoping to take on assets, since it provides crucial insights into a local authority’s options and processes when considering community asset transfer. Community businesses can use it to build a compelling case.” 

The long and short reports are both available to download below.