Over the last two years, the pandemic has revealed the vital role of the community, voluntary sector and citizen action; with millions of individual and collective acts of neighbourliness and kindness. Community Wealth Building represents an opportunity for this community energy to be harnessed and unleashed economically, by growing innovation and increasing the stake that workers, consumers and citizens, have within the Scottish economy.
At its core, community wealth building is a fundamental challenge to the practice of economic development, its role in wealth creation and where and who it flows to. In looking at existing patterns of wealth we already know that our wealth is unequally spread, with the richest 10% of Scots more than 200 times wealthier than the poorest 10%. Foodbanks, almost unheard of in Scotland a decade ago, are now widespread and a lifeline for many. Furthermore, the unsustainable use of natural resources comes at great costs to our ecology and climate.
Emerging in the 2010s in the USA, community wealth building aims to reset economic development and the economy more generally by ensuring as much wealth as possible is retained and recirculated in Scottish economy – creating an sustainable economy in which all Scots share a genuine and fair stake in our economic system and the wealth we all have a hand in producing.
The desire for all Scots to have a genuine stake in the economy harks back to our economic past, where unequal patterns of wealth and wealth extraction part defined the economics of our nation. Take the Clearances. Then a few wealthy people and landowners, in positions of economic power, rode roughshod over local culture and the economic lives of tenants, introducing agriculture practices which extracted more wealth from our land and our communities. Similarly, the urban industrial expansion of Scotland, saw a workforce that was too often forced to labour under poor rights and conditions with meagre wages.
As a country we have had a history of radical responses to this adversity. Waves of policies have enacted change. From the land reform of the Highland Land League to the political voice achieved in Scotland’s mining and shipbuilding heartlands, through to political radicalism in Glasgow’s industry which advanced women’s rights.
Community wealth building fits within this Scottish economic history and tradition. Indeed, whilst Adam Smith – the Scottish founder of modern economics – could never have foreseen the huge failings of the fossil-fuel based market economy, or the huge concentrations of wealth it creates, he acknowledged that markets are human place-based systems of wealth flows and consumption. And of course he believed that an economic system must have compassion toward the suffering of others as well as empathy and solidarity. Community wealth building partly stands on the shoulders of that tradition, with a practical focus on how we harness the power of local communities.
However, there is an important caveat and potential challenge for the third sector. Whilst community wealth builsing is supportive of volunteering and growing civil society activism more generally, it not about hugely accelerating the third sector and community power into the delivery of more services within the public sector economy. Community wealth building is not about developing the community and voluntary sector as a cost effective alternative to state services through the use of un/underpaid volunteers. Instead, it looks to see practical action encouraging citizens, communities and the third sector to play a greater role in ownership and control of assets within the commercial economy.
In this community wealth building implements and supports a variety of mechanisms, such as community ownership, cooperatives, employee-owned firms, community land trusts and community finance. Through this activity wealth – opposed to being extracted – is made generative, as these ownership forms lock in wealth through workers and communities having a greater stake, including ownership. In this, community wealth building is predistributive, offering greater wealth for all, and thus reducing upstream demand on some public services. As such, community wealth building is not regeneration with a new name, this is about a new way of organising our local economies by advancing economic ownership and ensuring the economy genuinely works for all Scots.
The work on community wealth building in Scotland is advancing. It has already helped to support people and places across Scotland to develop practical actions that will ensure local communities benefit more from the abundance of wealth we produce. We now have community wealth building activity in North Ayrshire (since 2019) and more recent action planning work and subsequent progress in Clackmannanshire, Glasgow City, Fife, Western Isles and South of Scotland. Other areas such as South Lanarkshire and Dundee are integrating it into their way of working and it is also gaining traction with many national stakeholders like Scottish Enterprise, the NHS and Cosla. There is now a minister for public finance, planning and community wealth, Tom Arthur MSP, and legislation is planned for later in the parliamentary term.
In this redirection of wealth, there are five practical interrelated pillars of action, all seeking to affect changes to how wealth flows, and who it flows too.
Spending. This is about using the power of public spending to shape the market, including the development of inclusively owned enterprises, fair work and shorter supply chains. It also includes using public spend to maximise community benefits through the action of large public sector anchor organisations as regards procurement and commissioning. This includes innovations such as the Community Wish List developed in Perth and Kinross and elsewhere. This means that communities decide what community benefits contractors should deliver. This process is now being rolled out in a number of other areas, with areas including North Ayrshire developing a community facing portal with a wish list of ways in which the community would like to be supported.
Land and property. This is growing the social, ecological, financial and economic value that local communities gain from land and property assets. This aspect is clearly seen in community land trust activity in the Western Isles and work across communities in urban Scotland, especially in relation to vacant and derelict land in Glasgow City, and the growth of community energy production, as seen in North Ayrshire and Western Isles.
Inclusive ownership. Developing more local and social businesses which generate community wealth, including social enterprises, employee owned firms and co-ops will help distribute wealth back into the community. We are experiencing a deepening and growth of employee and other forms of inclusive ownership. This includes community wealth building work in Glasgow City and the housing sector in South of Scotland, where there is desire to grow inclusive ownership models as part of the public sector supply chain in the procurement and commissioning of goods and services.
Finance. Ensuring that flows of investment and financial institutions work for local people, communities and businesses is key to community wealth building. There is a growing recognition of how investment can support this. We are seeing this in the alignment and joining up of funds locally, including relating to derelict land, and the deployment of a community wealth building lens to Scottish Government and UK funding, such as the Growth Deals.
Workforce. Community wealth building will see fair work and local labour markets that support the wellbeing of communities. In Fife and Clackmannanshire they are building on the national fair work agenda to create Fair Work Charters, working to ensure we cement living hours and living wage practice across local labour markets.
In conclusion, now is the time to respond to the crises of our time and make the required economic transformation of wealth and power. The Community Wealth Building model of economic development and practical actions are Scotland’s answer, continuing our proud history of progressive responses to adversity. In this we must unleash the energy of the community and third sector to help build a wellbeing economy that truly works for all Scots.
Neil McInroy is Senior Fellow for the Global Advancement of Community Wealth Building at the USA based research and development lab – The Democracy Collaborative