2D: Know your asset

It’s very important to become familiar with the site you want to take on through asset transfer

This is the same whether it’s a site you have been using for many years or if it’s a new site you are hoping to take over.

We recommend that you undertake a full and balanced ‘site appraisal’ before making any decision to take over a building or site from a local authority. For local authorities making a site available for CAT, it’s equally important to make available as much information as possible on site condition, risks, replacement costs, essential works, maintenance schedules etc.

Site appraisal

The site appraisal process helps you decide if the site is fit for purpose and it will highlight any major issues which will require negotiation before transfer. The appraisal process should be rigorous, needs professional advice, and needs to balance the opportunities and risks associated with each site and / or building looked at.

Use the Site Appraisal Checklist as a starting point for making sure you know the site. The list is not designed to be exhaustive, but rather to highlight the need to be aware of some of the main issues which might affect the transfer negotiations.

  • The importance of knowing the condition of your future asset is to fully expose any potential risks which will impact on the business plan and ultimately the future of your club or community organisation
  • Once any potential risks are known these need to be fully discussed with the current owner. It may be possible to factor in some recognition of this, so for a pre-agreed period the current owner, (or building contractor), may indemnify elements of the building against failure or agree to retain responsibility for certain repairs
  • A detailed condition survey should form part of the transfer negotiation. If a site or building has been under-maintained in the past, this should be reflected in the terms of transfer
  • Clearly, if too many risks are exposed, and not managed, then the site or building may ultimately be of no value as an asset. Some significant risks may have to be borne by the club or community organisation. It is, therefore, important to factor in the cost of any necessary risks.

How feasible is your project?

An asset transfer will represent a significant financial commitment to both the Local Authority and the community sports group. Because of this, it is strongly recommended that a feasibility study is conducted first.

A feasibility study is not a business plan. It is a piece of work to look at whether a proposed project:

  • Is really needed?
  • Can be accomplished?
  • Is viable and sustainable in the long term?

The aim of the feasibility study is to give you a good idea about whether it is worth putting more time and energy into the asset transfer process, which can be hard work and expensive in terms of both time and money. So the feasibility study needs to tell you whether the asset transfer is likely to be successful.

To decide whether a project is feasible, you need to know what is to be achieved and why at the outset, i.e.: to agree the project objectives. You already have a vision and purpose agreed with your members and the wider community, but it is helpful to set objectives which are more specific and include a time frame for achieving a transfer and the main results you want to achieve through it, for example improvements to the ground, increases in people participating in the sport, more income generated to plough back into the club.

It is important to note that a feasibility study will only answer the questions you ask. So, if the focus is just on financial viability, other practical elements such as whether there is enough space for pitches, changing facilities and spectators, might be missed.

Further advice

There are consultancies who specialise in feasibility studies. The disadvantage of using an external organisation is that they can be expensive and they will not necessarily know the project, the site or the community very well, but they can act as a critical friend and help you overcome your ‘optimism bias’.

There are many judgement calls involved in deciding if a project is feasible, and you need a balanced look at the issues which enable you as a club, community or charity to make an informed decision about whether taking on an asset is the right decision for you. It is easy to get carried away with a vision and ignore real obstacles to achieving it.

Have a look at the document ‘feasibility study outline’ below to guide you in what to include in your feasibility study.

Community: Has a thorough site appraisal been carried out, with the help of suitable external advisors?
Community: Are there any site risks that mean your plan is fatally compromised?
Community: Have all the ‘make or break’ questions been answered to a reasonable degree of certainty?
Community: has the feasibility of the transfer been tested against your original vision and purpose?
Community: Have similar projects been visited and learned from as part of your stage 1 feasibility?
Community: have all the risks been identified and addressed?
Local authority: have you made available to the community group as much information as possible about the condition and history of the site?
Local authority: can the terms of the transfer take into account any liabilities, including the cost of necessary repairs and future maintenance?
Local authority: Has relevant information been provided to the potential transferee to help with feasibility assessments?