There has been some excitement in the Scottish policy landscape over the last few weeks with the introduction of (a long awaited) Community Wealth Building (Scotland) Bill. While it may not sound that exciting, as the first legislation of its kind in the world, this is actually a big deal.
But what is Community Wealth Building, and why does it matter? I am going to use this article to set out the nuts and bolts, explore the implications of this new legislation and look to the future. First, though, I’ll explain who the Centre for Local Economic Strategies (CLES) are. CLES are the national organisation for local economies. We have been working for nearly 40 years supporting places to understand how they can make their local economies more resilient. We pioneered the development of Community Wealth Building in the UK, following on from work in the US and, nowadays, we work across the UK and Europe to support places to take a Community Wealth Building lens to their local economies. We work with places to instigate and enable change and are proactive in supporting them to develop economic strategies and activities which suit their challenges and opportunities and which deliver for their people. Here in Scotland we have been active for many years as Community Wealth Building has become more established, first in our places and now in government legislation.
Before I get into Community Wealth Building, I’ll set the scene for why we need to take a new approach. We have an economy which currently prioritises economic growth, delivered via external private capital. We are told that more growth will reduce inequality and pay for public services. Yet, despite our relentless pursuit of growth, in recent decades the UK has seen dramatic rises in poverty levels, business uncertainty and an escalating climate crisis. It is clear, then, that economic growth alone cannot be relied on to tackle these issues.
Community Wealth Building works on the principle that, instead of relying on attracting capital investment to solve all of our local challenges, we need to rethink how we’d like our economy to function. We need to set goals and targets we’d like the economy to help us to meet, goals which go beyond growth and are based on local needs and challenges, like reducing in-work poverty or poor local supply chains for essential services. To do this, we need to make use of the wealth that is already within our economies and flowing through our places – harnessing it to support those who need it most. That is not to say we don’t want or need economic growth in places, but that it should not be the sole aim and focus of economic strategies – we need to be clear about where we want the benefits to be seen.
Community Wealth Building advocates for a rethinking of how we view our local economies and the levers we can pull within them to retain wealth. Our work has traditionally focused on large organisations known as “anchor institutions” – the NHS, councils, colleges, universities and housing associations, among others. These organisations are rooted in their places and committed to local communities and – crucially – they employ, spend and own assets at scale. Collectively the public sector in Scotland spent £16.6bn in 2022-2023 of which £8.9bn was spent in Scotland alone. Our public sector organisations can have a huge role to play in creating economies which work for us all, particularly through the formation of anchor institution networks. These networks enable organisations to come together on either a local or regional level to discuss challenges and consider how they can adapt their practices to address them.
There are also important roles for the private and third sectors in Community Wealth Building. More and more organisations across all sectors in Scotland are taking up the narrative of Community Wealth Building and articulating how they are supporting their people and places through their activity. Community anchor organisations are equally rooted in their place and can shape their local economies and the private sector, too, can play a huge role in Community Wealth Building.
In practice, Community Wealth Building centres around setting a vision for change and then using five levers of activity to help meet this vision. The levers are:
- Progressive procurement of goods and services – who and where we buy goods and services from
- Fair employment – ensuring good working conditions, fair pay and representation
- Socially just use of land and assets – how can communities have access to, or more ownership of local assets in their places
- Making financial power work for local places – how can local wealth be harnessed and redirected to local areas
- Shared ownership of the economy – building a stronger ecosystem of more generative enterprises which support local people and places.
These activities should not be considered in isolation. Instead, where institutions focus on the outcome they are trying to achieve and then use the lens of Community Wealth Building to get there, some really exciting and creative interplay of these levers can be found.
In Scotland, North Ayrshire Council was the first place to adopt a Community Wealth Building approach in 2020. Following on from this, five pilot areas were supported by the Scottish Government to focus their attention on taking forward elements of it in their planning – Clackmannanshire Council, Fife Council, The Western Isles, Glasgow City Region and the South of Scotland. In the years since then, other Scottish local authorities, NHS Scotland and some in the third and private sector have all begun to think about how they can use their economic power to better shape the places they work within.
We’ve seen evidence from places the length and breadth of the country that taking a Community Wealth Building approach can have positive impacts, but the most profound research comes from a study conducted in Preston. The Council there has been on a Community Wealth Building journey since 2012 and research published in the Lancet in 2023 showed a direct link between taking a Community Wealth Building approach and an increase in physical and mental health and wellbeing. More examples of Community Wealth Building activity can be found on the CLES website as well as case studies showing local impact.
The newly proposed Community Wealth Building legislation sets the intention of the Scottish Government that the approach will “reduce economic and wealth inequality between individuals and communities in and across Scotland” as well as “support economic growth in and across Scotland”. The mission is a laudable one, and sets the scene for how Community Wealth Building can be delivered. It also links back to the National Strategy for Economic Transformation where taking a Community Wealth Building approach is linked directly to the aim of creating “A Fairer More Equal Society”.
The proposed legislation states that the Scottish Government will publish a statement, guidance and require public sector bodies to collaborate to create Community Wealth Building action plans.
The Bill is not perfect. It makes no mention of the private or third sectors, and this is a glaring omission as many in this space are starting to talk about and use Community Wealth Building in their own work and activity. It asks more of an already depleted public sector and it provides no resource to back up the aims. But it is a start. Views are being called for on the Bill at the moment, and as it travels through parliament amendments may well be made.
I, for one, will be watching its progress with interest. The opportunity Community Wealth Building can provide for our places is immense. Encouraging anchor institutions to direct their wealth and energy towards Scotland’s businesses, enterprises and communities could be transformational for our local economies. We need to ensure the public sector is supported to be innovative here. There is much scope for local action to meet local challenges. There is also an opportunity to move beyond solely thinking about economics and foster the links to local democracy, participation and empowerment. An Act which cements these links would be ground-breaking indeed.
Naomi Mason is a Senior Researcher with the Centre for Local Economic Strategies and leads the organisation’s work in Scotland.