A guide to third sector trading - WCVA

It’s an idea, but is it business? A guide to third sector trading
1: Getting
started
2: First steps 3: Business
planning
4: Legal and
governance
5: Funding
and
resourcing
6: Financial
controls
7: Managing
growth
8: Management
and
governance
9: Social
enterprise
10: Sources
of support
Pre-empting concerns about risks
Handling the risks: There is not scope in this guide to cover
the issue of transfers exhaustively. But one of the most serious
practical obstacles to asset transfer is concern about the risk
involved, mainly by public bodies, but also by social enterprises
concerned about the liabilities for management, maintenance and
ongoing community involvement. Greater progress can be made
by addressing the risks directly and openly together. There is also
evidence from experience with at least one Welsh local authority
that once fears of risk are settled, the council may be able to be
much more generous in the way it disposes of its asset than was
envisaged during the negotiations.
Potential risks: Guidance material produced by the UK government
for community organisations and local authorities comprehensively
identifies risks and suggests specific actions to reduce them so that
the transfer can go ahead. It successfully removes most perceived
barriers to social enterprises taking over council buildings.
• Risk 1: Community empowerment objectives proposed by
community organisation are vague, weak or not aligned to those
of the local authority:
− reviewing the objectives
− a community needs survey
− partnership working
• Risk 2: The receiving organisation does not have the capacity to
manage the asset:
− skills audit, an agreed organisational development plan
− access to on-going expertise and advice
− a ‘handover document’ setting out responsibilities
− formal agreement on the minimum level of usage expected
− requirement for a viable long-term business plan
− transfer the building on a phased basis, or for a specified
period with responsibilities for repairs retained by the council
− specialist technical help provided by the council
− legal clause on retaining community use if the community
organisation ceases to trade.
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