The Interim Is Not Immunity: Lawful Meanwhile Use of Public Buildings and Land

Public bodies are increasingly asked to make empty assets productive before a long-term decision is taken. A meanwhile use arrangement — a short occupation by a community group, a start-up, an arts organisation or another public body — can reduce holding costs, support local priorities and test demand. But the flexibility that makes meanwhile use attractive is also its legal weak point. If the arrangement is mischaracterised, or the exit is not properly documented, a temporary solution can become a secure tenancy, a subsidy control problem or a reputational dispute.

Characterise the arrangement before drafting it

The label 'licence' does not decide the legal nature of the arrangement. The central question is whether the occupier has exclusive possession for a term at a rent. If it does, the arrangement may be a lease, with security of tenure for business purposes under Part II of the Landlord and Tenant Act 1954 unless properly contracted out. A genuine licence usually leaves the public body in control: shared access, services, retained keys, prescribed hours and no assigned space. Drafting must match the operational reality. A document called a licence that gives an occupier a lockable unit, excludes the owner and runs for years may be treated as a tenancy. Conversely, a licence that is too interventionist may not give the occupier enough certainty to invest or fundraise. The approval record should explain why licence status is appropriate and how control is retained.

Confirm the power, the value and the decision-maker

Public bodies must identify the statutory source of the power to permit occupation. For local authorities in England, section 123 of the Local Government Act 1972 governs disposals of land, and the General Disposal Consent provides limited scope for disposal at less than best consideration. A short lease is a disposal of an interest; a licence may not be, but it can still engage best value, asset management and financial governance. Devolved equivalents must be checked separately. The report to the decision-maker should state the market rent evidence, any undervalue, the public benefit relied on and the delegation under which the arrangement is approved. Do not let an operational officer sign away an interest that requires cabinet or board approval.

Test subsidy control and procurement exposure

A below-market rent, a rent-free period or publicly funded fit-out can be a subsidy under the Subsidy Control Act 2022 where the occupier is an enterprise and the statutory tests are met. The minimal financial assistance threshold is not a substitute for analysis. Record the market comparison, the policy objective and any conditions. If the selection of an occupier involves consideration and enforceable obligations, consider whether a procurement or concession regime applies. Even where it does not, a published expression of interest, transparent criteria and a conflict register will reduce challenge risk. Avoid creating an implied contract through correspondence before approvals are in place.

Make the operational terms enforceable

Meanwhile use often brings public and community activity into buildings that were not designed for it. The agreement should allocate responsibility clearly: repairs and statutory compliance; asbestos management; fire risk assessments; legionella; electrical safety; gas safety; accessibility; waste; utilities; security and out-of-hours access. Insurance must be evidenced before occupation, with public liability, employer's liability where staff are involved, and building insurance co-ordination. Safeguarding duties need practical expression — vetting where regulated activity arises, reporting routes, supervision and restrictions on who may use the space. Data protection should be addressed if the occupier uses council systems or shares personal data. Prohibit subletting and assignment without consent, and control alterations and signage.

Rehearse the exit before occupation begins

The value of a meanwhile arrangement depends on the public body's ability to end it. Use a fixed short term with a clear expiry date and, where needed, a break right exercisable on specified notice. State the consequences: no compensation for lost goodwill, removal of alterations, reinstatement, handback condition, outstanding rent and dilapidations, return of keys and fobs, and insurance run-off. If the arrangement is a licence, the termination clause should be unambiguous and consistent with the degree of control retained. If it is a lease, a break right must be drafted strictly: notice deadlines, service methods and conditions are usually enforced to the letter. Operationally, keep inspection records and correspondence so that any decision to end occupation is evidenced by reference to the contractual terms and the public body's reasons, not merely by assertion. Before terminating occupation that affects community users, consider the public sector equality duty and any legitimate expectation created by the way the arrangement was presented.

A 2026 approval checklist

• Power: identify the statutory authority and any consent requirements.
• Interest: decide lease or licence on substance, not label, and record the reasoning.
• Value: obtain market rent evidence and explain any undervalue.
• Approval: confirm delegation and committee or board sign-off.
• Subsidy: complete a subsidy control assessment where applicable.
• Selection: run a transparent process and manage conflicts.
• Insurance: evidence cover before keys are released.
• Compliance: allocate repairs, fire, asbestos, water and electrical duties.
• Safeguarding: assess regulated activity and set reporting routes.
• Exit: specify term, break notice, handback and reinstatement.
• Records: retain the decision trail, inspections and notices.
• Equality: consider the public sector equality duty before termination.

Conclusion

Meanwhile use is not a legal holiday from governance. It is a short-term property arrangement that must be authorised, documented and reversible. In 2026, with pressure on property portfolios and public budgets, the public body that can show why a licence is a licence, why any undervalue is justified, who approved it and how it will get the asset back is the one that can use the interim confidently. The discipline is not an obstacle to flexibility; it is what makes flexibility defensible.