Community Right to Bid ‘could cost councils £5m’
By Vivienne Russell | 2 October 2012
Councils could have to find an extra £5m to fund the Community Right to Bid, despite ministerial promises that any new burdens would be centrally financed, Unison has claimed.
Under the right, the sale of properties with ‘community value’, such as libraries, pubs or cinemas, can be halted to allow local people to raise enough capital to take over the asset themselves.
But Unison says that operating the power, which was included in the Localism Act 2011, contains hidden costs for councils. The union is citing Department for Communities and Local Government regulations, released on September 20, which state that local authorities are liable to pay compensation to private sellers for any delay to the sale triggered by the right to bid.
Following enquiries to the DCLG, Unison has established that councils will be given just £4,873 in 2012/13 to administer the scheme.
While any compensation payments in excess of £20,000 will be met by DCLG, Unison is concerned that payments falling between £4,873 and £20,000 will have to be met from council coffers, creating a funding shortfall just short of £5m. Writing on the Public Finance blog
, Heather Wakefield, Unison’s head of local government, said: ‘Unison enquired of the DCLG who would meet the difference between the potential cost and the amount allocated by the department, which will arrive on October 15. We were told that councils themselves must consider ways of mitigating and managing the risks and consider pooling the resources made available.
‘That’s all very well, but aside from breaching its own New Burdens Doctrine… it ignores the unequal burdens that may fall on councils and, of course, shifts risk from private sector owners to council tax payers via the missing £5m that councils will have to find.’