It’s enormously encouraging that the Scottish Government is committed to introducing legislation on Community Wealth Building (CWB) in the current parliamentary session (2021-26) and views it as a critical enabler for the National Strategy for Economic Transformation (NSET).
Last year it held a major consultation on The Contribution of Community Wealth Building (CWB) to a Wellbeing Economy. Following up on this, the think tank Future Economy Scotland has now released an inspiring report by its co-Director Miriam Brett setting out her vision for what we could achieve, if we used CWB to its full potential.
CWB could be transformative. It offers huge opportunity, but also presents huge challenges. It involves “rewiring the local economy”, one locality at a time, so that more wealth circulates within the community, and less is siphoned off to centralised bureaucracies and distant corporations.
What is Community Wealth Building?
According to the Scottish Government, “CWB is an approach designed to tackle long-standing economic challenges and transform Scotland’s local and regional economies by considering the ways in which the public sector, in partnership with the private, third and community sectors, can ensure more wealth is generated, circulated and retained in communities and localities.”
The slightly different definition used by the Centre for Local Economic Strategies prioritises a people-centred approach.
Brett is blunt: “[CWB] is a people-centred approach where the objective is changing the flow of wealth so that it is more generative rather than extractive…
“It is imperative that its meaning is not watered down or misinterpreted – particularly by local and national decision makers. For CWB to fulfil its transformative potential, its mission, vision and strategy must be comprehensively understood.”
CWB is built on five pillars:
- Socially just use of land and property
- Plural ownership of the economy
- Making financial power work for local places
- Fair employment and just labour markets
- Progressive procurement of goods and services
Most of these are areas where the Scottish Government is already pushing for change, so CWB offers a strategic framework to integrate these different strands of reform, from land reform to fair work, taxation, and public procurement, to make sure they are mutually reinforcing.
What problem is Community Wealth Building trying to solve?
Brett emphasises that conventional approaches to local economic development are usually top down, extracting wealth from, rather than regenerating wealth within the local community. Our financial system lends far more to financial and property markets than for productive investment, while efforts to attract inward investment detract from mobilising locally-led investment. This leaves local communities’ prosperity dependent on factors outside their control, and on distant management with no stake in the community.
The gap between aspiration and reality in jobs created by wind energy investment, the large number of people in precarious jobs on minimum wage, and the £10bn gap between our GDP and GNI, are but three of many symptoms of the underlying problem – which our ambitions both for a Wellbeing Economy and for a Just Transition demand that we solve.
Does Community Wealth Building work?
Brett cites a number of successful case studies for CWB, perhaps the most dramatic being Preston’s. Six anchor institutions brought together by the city council drove levels of spending with city-based suppliers up from £38.3m in 2012 to £112.3m in 2016. This approach led to the percentage of total procurement spending in the Lancashire region going up from 39% in 2013 to 79% in 2017, a rise of £74m in Preston and £200m in Lancashire.
What do we need to do to make it work? What could possibly go wrong?
Community Wealth Building is NOT business as normal. It is NOT slightly tweaking what we do just now. It is whole system change, to give local communities the agency and knowledge to take control of their own future, while rewiring structures at national level to remove obstacles to local initiative. Make no mistake, this needs champions and education at every level, based perhaps on the Nordics’ realisation that,
…rather than focussing on the economy, we should focus on the people, and let them take care of the economy when they are rounded and ready.
This is quite a challenge given the Scottish Government’s current centralising instincts! Reforming procurement habits and rules which currently seem to favour the big consultancies and international contractors will require sustained hard work. But as Brett makes abundantly clear, CWB is a key to unlock the benefits not only of the Wellbeing Economy but also of a Just Transition. And with such potential benefits, it is well worth the effort. Indeed, we cannot afford to fail.
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