Community Wealth Building, the road to where?

Community Wealth Building (CWB) became a buzzword in 2021 when the Scottish Government revealed plans to introduce CWB legislation in the current parliamentary session. The vision for Scotland’s future, set out in the Programme for Government 2021-22 and the National Strategy for Economic Transformation (NSET), presented CWB not only as a tool to achieve a wellbeing economy for the nation, but an economic approach which could address systemic issues. Announced at the tail end of the pandemic, and at the beginning of the cost-of-living crisis, it was a welcome change for many of us who needed to believe a brighter future was possible. However, if CWB is the roadmap to a better future for Scotland, the Scottish Government need to clarify what exactly they want to achieve, as recent cuts to national climate targets and continuously shifting and competing economic priorities indicate a fork in the road ahead.

Community Wealth Building was first introduced as a bold new approach to economic development, tackling inequality and championing sustainability by ensuring communities in Scotland have greater ownership over the wealth and assets in their area. This is a place-based approach, achieved by capturing the economic power of large, local organisations with influence – called anchor institutions – and directing this money back into the area to the benefit of the local economy and community. The Scottish Government have adopted a model of CWB known as the ‘Preston Model’, after the successful CWB initiative launched by Preston City Council in 2012, which is based on action across five key pillars: spending, workforce, land and property, inclusive ownership, and finance. Six CWB pilot regions in Scotland were established across North Ayrshire, Clackmannanshire, Glasgow City Region, Tay Cities Region, South of Scotland and the Western Isles (Eilean Siar) to trial this model.

Thus far, CWB in Scotland has involved a combination of approaches. Some are new initiatives led by local authorities, such as North Ayrshire setting up a cross sector Anchor Charter which commits the institutions involved to adopt a CWB approach to economic development. Other work is voluntary sector or community led, with projects like community owned solar energy in Linlithgow or a charity trust managing land and creating employment opportunities on the Isle of Harris, many of which have been in operation long before the Scottish Government’s commitment to CWB.

In a practical sense, CWB is an approach to local economic development, but in an ideological sense, it is also a way to rethink or reimagine economic systems and mechanisms, such as encouraging employee ownership and Fair Work practices. While principles of CWB are not new to Scotland, the key benefit of CWB and a five-pillar approach is that it is a coherent and holistic way to bring together things which have previously been siloed. But with any form of systems change, this does not come without its challenges.

A public consultation process took place at the start of 2023, which sought to explore which new powers and duties would enable public bodies to support CWB, and where existing law and policy could be changed to advance action on CWB. This revealed some key tensions around the lack of funding from Scottish Government for local authorities and the sector to deliver CWB, tense relationships between local authorities and voluntary sector organisations, a perceived top-down approach some local authorities have taken to implement CWB, and a general sense of confusion around what CWB is.

With CWB legislation now in development, another issue is figuring out how to successfully scale CWB from the local to national level; a dilemma captured at the recent Local Government, Housing and Planning Committee’s pre-legislative scrutiny round-table evidence session. Examples from Preston City Council demonstrate how CWB is deeply practical at the smaller, local level, through straightforward initiatives such as increasing spend with local businesses, working with local investors, and embedding ideas in communities around democratising the local economy. By contrast, CWB is being introduced as a national level policy in Scotland, designed to be delivered by local government; a top-down approach seemingly at odds with the grassroots origins of CWB.

This is further exacerbated by the general sense of confusion around what CWB is, how it differs from existing approaches and how communities can reap the benefits of CWB. Buy-in from communities, the voluntary sector, businesses, and local authority staff, is needed for CWB to be successfully embedded as an economic development model across the five pillars. This, in turn, facilitates a core aspect of CWB, which is local communities having greater ownership and control over the land, assets, employment opportunities and wealth created within their communities. While the appeal of CWB to government is that it is a reconfiguration of the economy by using existing resources differently, the reality is that systems change is notoriously difficult without funding, political leadership or community buy in to grease the wheels, all areas Scotland appears to be lacking in.

Adding to the uncertainty is the shaky ground CWB occupies at a national level. The National Strategy for Economic Transformation (NSET), which outlines the Scottish Government’s economic strategy to transform the Scottish economy over the next 10 years, crucially names CWB as an approach to achieve this ambition. However, a refresh of the economic strategy is due to be published this year, and it’s unknown what will be changed or committed to. The termination of the Bute House Agreement between the SNP and the Scottish Greens, which featured CWB commitments in their Shared Policy Programme, raises potential questions about CWB's future, as does the change in leadership at Scottish Government. Under John Swinney’s new Cabinet, the Economy portfolio has shifted away from Wellbeing Economy, Net Zero and Energy to a standalone portfolio led by Kate Forbes, and Tom Arthurs’s ministerial position has changed from Minister for Community Wealth and Public Finance to Minister for Employment and Investment. The quiet renaming of the Scottish Government’s economic portfolio does not seem to bode well for Scotland’s wellbeing economy future.

SCVO met with the CWB team at Scottish Government before the change in leadership, who promised they were still committed to introducing CWB legislation in the current parliamentary session. If this is true, then legislation will at least establish CWB as a national priority, albeit with little time for legislation to bring about much change on the ground. However, this is still competing with many other, often conflicting, economic policies. With a refresh of NSET on the horizon this year, and what appears to be a strong focus on business and industrial strategy, where does CWB fit with the Scottish Government’s economic priorities, and is there still room for a wellbeing economy?

At present, what CWB legislation promises to do and the Scottish Government’s ambition for the future is unclear. The wellbeing economy future we were promised in 2021 was great in theory, but three years on, we need specific, actionable targets, and measures of success and failure, to know how close or far away we are from where we want to be. Without these, CWB is a road to nowhere.