There's the claim that "the Council is not entitled to use Common Good assets for the provision of statutory services". This claim appears to originate from Andy Wightman's evidence to the Holyrood Committee looking at Common Good issues. That view was contradicted by SOLAR, The Society of Local Authority Lawyers and Administrators in Scotland, who put the view that;
I haven't come across anything that really supports Andy Wightman's point of view but there is some evidence to support the latter opinion, in the form of recent court cases."Other than the requirement to have regard to the interests of the former burghs inhabitants, there is no specific legal requirement as to how the Common Good fund should be spent. There is nothing legally to stop the Local Authority from using the fund for one of its statutory purposes."
In 2004 South Lanarkshire Council went to court with proposals to construct a new PPP school on a park forming part of the Common Good. The LA assumed that such a use would form a disposal requiring the Court's permission but the Judges took the view that, since the land was still in LA ownership and in continued community use, building a school did not constitute a disposal and so the court's permission was uneccessary.
That judgment was relied on again in a later case, the summary of which can be viewed here .
Again a Local Authority was seeking permission to build schools on Common Good land, and the Court took the following view;
The Court held the petition was uneccessary; the Local Authority did not need to seek the permission of the Court and could proceed.Although no opinions were issued, the decision in South Lanarkshire Council indicates that, for a transaction to amount to a "disposal" of land for the purposes of section 75(2), there must be an act whereby the local community are deprived of the benefit of the land in question. It seems to be implicit in the decision that the use of land held for the purposes of the public park to construct a school and playing fields does not involve any "disposal" for the purposes of the subsection. In view of that decision, which is obviously binding on me, I consider that there is no "disposal" in the present cases. It follows that section 75(2) has no application. In these circumstances I refused the prayers of the petitions as unnecessary.
It seems clear from these recent cases that the Courts do not take the view that Local Authorities cannot "use Common Good assets for the provision of statutory services."
And whilst there might still be a question as to whether such a use amounted to an alienation, the fact that the Courts don't regard it as a disposal is significant. Because the other claim made in the article is that the Council would "have to pay into the Common Good fund an amount equal to the market value of the land."
Now if a Local Authority sells a Common Good asset (unless the status is transferred) then the proceeds of the sale should indeed be credited to the Common Good fund. But such a sale amounts to a disposal. And the Courts appear to take the view that building schools on Common Good land is not a disposal. The land would still be Common Good, the only difference being that there would now be a School on it. In such circumstances there would be no requirement to pay a market value for the land since no transfer of ownership occurs.
There would arguably be a case that the LA should pay "rent" into the Common Good fund for occupying the land with a school, but that should be fairly straightforward. Afterall the Common Good fund is still owned and administered by the Council. It would be a paper exercise to satisfy accountancy procedures with no obvious revenue or capital implications.