Manifesto small print… developers and landowners take note!

Some of the less-discussed Conservative manifesto promises that Greg Clark, the new Secretary of State for Communities and Local Government, must now implement are the proposals to strengthen the hands of community interest groups bidding for assets of community value (“ACVs”). These promises are to be found on page 21 of the manifesto, rather bizarrely, in the chapter entitled “Jobs for all”.

Shorn of party political “puff”, the commitments read:

“… we will strengthen the Community Right to Bid …. We will extend the length of time communities have to purchase these assets, and require owners to set a clear ‘reserve’ price for the community to aim for when bidding. We will set up a Pub Loan Fund to enable community groups to obtain small loans to pay for feasibility work, lawyers’ fees, or materials for refurbishment, where they have bid to run the pub as part of our reforms to the Community Asset Register.”

It looks therefore as though we can expect the six month moratorium period (which applies if a community interest group expresses an interest in bidding) to be extended; but by how long remains to be seen. The same applies to the two month period such groups have to express interest in the first place. This issue was covered in my 10th February blog.

The requirement for land owners to set a “reserve price” will bring the ACV legislation a lot closer to conferring a right of pre-emption on community interest groups. At present, someone owning an ACV can simply refuse to negotiate with a community interest group trying to bid. One assumes that this will still be the situation after the rules change. But the “court of public opinion” may well disapprove strongly of landowners who refuse bids that meet the “reserve price” the owners themselves have set. Moreover an owner who sets a high “reserve price” may be castigated as greedy by a hostile press.

Pubs are the main battleground of the ACV regime. According to the House of Commons Library Briefing Note on ACVs, published last February, some 500 of the 1,800 assets then listed as ACVs were pubs. The first litigation about the ACV regime concerned the “Chesham Arms” in Hackney, which the developer lost. Most subsequent ACV-related cases concern pubs. The availability of Government loans, presumably on favourable terms, will strengthen the position of those wanting their local to stay open or re-open.

Although the ACV legislation supports those whose want to secure future community use of premises that currently qualify as ACVs, it is increasingly becoming a deterrent to property owners would otherwise be happy to let their premises be put to a use that furthers the social wellbeing or social interests of the local community.

The planning impact of registration as an ACV may well be much more significant, in the long term, than the delay caused by observing the moratorium periods. Many planning authorities now accept the Government’s guidance that registration as an ACV may be a material planning consideration, when addressing applications to grant permission for development of registered ACVs. It may not be long before registration as an ACV is thought of as almost as fatal a blow to development prospects as registration as a town or village green.