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Performance Review of Common Good Funds

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Performance Review of Common Good Funds Appendix 1 Common Good Briefing Note What is Common Good? Common Good is the name used to describe various assets held as part of a Common Good Fund. These assets can be either heritable or moveable and in the form of property, land, cash, financial securities, furniture, paintings and any form of legal property. Common Good Funds belonged to the Burghs of Scotland who had responsibility for holding and administering these properties and monies relating to them for the benefit of the people living within the Burgh boundaries. At local government reorganisation in 1975 the Common Good assets and funds transferred to the appropriate District Councils, and the Local Government etc. (Scotland) Act 1994 transferred the Common Good properties and funds to the respective new unitary authorities. Common Good is not owned by the community nor is it held in trust for the community. Ownership of the Common Good is absolute in the strict sense that the Council hold legal title to it. There are however statutory controls which apply restricting and limiting the extent to which the Council can dispose or deal with the property and on what terms. How can assets become Common Good? Assets can become Common Good: (a) through the terms of the Charter in favour of the Burgh; (b) acts of the Council in using an asset for such public / community use; (c) use by community from time immemorial by the public itself. Also gifts of assets may state that they are for Common Good – words such as ‘for the benefit of all the residents’ or ‘for the free enjoyment of all who reside in the town’. Appropriation or Disposal of Common Good The Local Government (Scotland) Act 1973 (‘the 1973 Act’) introduced rules in relation to appropriation or disposal of land, including that which is Common Good. Where no question arises as to the right of the Council to alienate the Common Good property (alienation being either disposal via outright sale, lease, and other lesser types of disposal including demolition of buildings) the ordinary rules relevant to appropriation and disposal of land (as contained in section 73 and 74 of the 1973 Act) will apply. Whilst there is no blanket prohibition on appropriating or disposing of Common Good land where a question does arise as to the right to appropriate or dispose the property, the matter is referred to Court for authority to proceed. In determining whether the Council may appropriate or dispose of the property, the Court will have regard to what is in the best interests of the inhabitants of the former Burgh and may attach conditions to an 1 appropriation/disposal if it considers that appropriate – for example, substitute land for that being otherwise used or sold. In considering whether a question arises as to the right of the Council to alienate Common Good property, it is generally regarded that inalienable assets are those where: the terms of the title confer common good status and public use remains; and/or there is dedication to public use by the Council’s predecessors; and/or there is use by the public from time immemorial. Common Good Funds The Council must act within certain clearly defined principles when administering the Common Good Funds: (i) the Council must exercise its discretion in a bona fide manner, honestly and in a way that is not illegal or contrary to public policy; (ii) the funds must be used in a manner which is of benefit to at least some of the inhabitants of the area and not adverse to the general interests of the community as a whole; (iii) the benefit provided is proportionate to the amount spent and that the expenditure of funds is reasonable and not for capricious or pointless purposes; and (iv) that it is spent solely for the benefit of the inhabitants of the area which the fund was intended to cover - for example, the Ayr Common Good Fund could not be used to benefit the population of Troon. Councils are required to account for Common Good assets under a separate fund, specifically for each former Burgh area. The 1973 Act specifically prohibits sums received or payable for items which relate to the Common Good of the Council from being paid into / out of the General Fund. Common Good income and expenditure (including administrative costs) must therefore only be accounted through the Common Good Funds. Current Practices and Administration South Ayrshire Council has responsibility for the administration of five Common Good Funds, representing the former Burghs of Ayr, Prestwick, Troon, Maybole and Girvan. Through the Council’s Scheme of Delegation, the Leadership Panel has responsibility for ‘determining arrangements for the administration of Common Good Funds and other Trusts for which the Council is responsible’. Overall responsibility for Common Good Funds falls within the remit of the Executive Director – Resources, Governance and Organisation, with direct management responsibility being delegated to the Head of Property and Risk Services. All financial spend relating to Common Good Funds is reported to the Leadership Panel for consideration. 2 .
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