Hansard

I am delighted to speak on behalf of the Economy and Fair Work Committee in the stage 1 debate on the Community Wealth Building (Scotland) Bill. I apologise for not being in Parliament in person. I acknowledge the receipt of the letter from the minister, which he mentioned and which we received this afternoon.

I thank everyone who responded to our call for views and the witnesses who gave evidence during our stage 1 scrutiny. I extend my thanks to those who enabled our visits to Alloa and Irvine, which provided invaluable local and practical insights. I also acknowledge the previous work by the Local Government, Housing and Planning Committee, on whose work we also relied.

Community wealth building is a proven economic development tool that aims to retain wealth within local communities, to foster engagement and cohesion and, ultimately, to enrich the lives of residents. As the committee heard, many local authorities across Scotland have already begun implementing community wealth building measures, either on their own account or as part of the Scottish Government’s pilot. The bill seeks to formalise the approach to ensure the adoption of community wealth building as a model of economic development across the country.

As members will have seen from our report, the Economy and Fair Work Committee is supportive of that general aim. However, the committee heard from some who felt that legislation might not be necessary to achieve the aims that are stated in the bill and that alternative measures, such as ministerial guidance or direction, could be used to achieve the same aims. Some also felt that new powers and additional metrics could be added to the bill to strengthen its aims. The committee heard from some, including Neil McInroy, the chair of the Economic Development Association Scotland, that a legislative approach such as the one used in the bill contains a clear “obligation to act” and ensures involvement from across the public sector, and therefore is of benefit.

Generally, the committee supports the measures in the bill, but we believe that in some areas they could be strengthened and extended. The publication of a community wealth building statement and the establishment of partnerships by the Scottish Government are welcome steps, but they are only part of the solution. Throughout our evidence gathering, the importance of there being clear, detailed and practical guidance under section 9 of the bill was repeatedly emphasised. To ensure consistent adoption of guidance, it must help local authorities and partnerships to understand the objectives and the means of achieving them.

Crucially, the guidance must address capacity challenges in local authorities, partner organisations and community groups. As Matt Pearce from Development Trusts Association Scotland warned, without that support, community wealth building risks becoming a burdensome and disengaging process. Accordingly, the guidance must set out clear expectations—particularly around governance, co-ordination, monitoring and evaluation mechanisms—that encompass the public, private and third sector and, most importantly, local communities.

To realise the full potential of community wealth building action plans, it is essential that local authorities and their partners are properly resourced to do so. Many witnesses expressed concern about the capacity of organisations that are already under great financial pressure to engage in the development and delivery of those plans. The City of Edinburgh Council told us that the financial memorandum presents “an incomplete picture” of the resources required. The Convention of Scottish Local Authorities echoed that concern, warning that, without proper funding, action plans risk becoming “a tick box exercise”.

The bill has triggered a financial resolution acknowledging the significant expenditure involved. We also note the minister’s suggestion that some resources could be drawn from existing budgets. However, the committee remains concerned that, without additional support and consideration of the total additional effort that the legislation may require, inconsistent or limited delivery may result.

Although community lies at the heart of the concept of community wealth building, the bill makes no reference to the community groups, third sector groups or private sector representatives in the partnerships. That omission was highlighted by many witnesses and respondents to our call for views. Witnesses, including the Scottish Community Alliance, called for the bill to formally recognise third sector and community groups as being essential to delivery.

The committee also received evidence regarding the need for mechanisms that enable direct citizen involvement in the development of community wealth building plans and approaches. The committee therefore recommends that guidance produced under the bill should set out a clear expectation for local authorities and partnerships to engage with the third sector, and I urge the Government to undertake further work on developing practical approaches for citizen engagement.

I also note that the committee raised a question about the rationale for the selection of the specified bodies that are required to be consulted. In our report, we highlight suggestions from witnesses and stakeholders for additional bodies that could usefully be included in the list.

The bill does not specify how the impact of community wealth building action plans will be measured, leaving that to local authorities and their partners, as noted in the intervention taken by the minister. Witnesses emphasised the need for consistent, high-quality data, warning that without it, progress cannot be accurately assessed. I emphasise that that is not simply about the targets; it is about having consistent metrics, with the targets being set by the partnerships. Having consistent metrics will allow comparison across community wealth building plans.

The FSB highlighted the importance of standardised reporting and, as has been noted, that measuring the value created for local small and medium-sized enterprises is critical to understanding how well community wealth building is being delivered. To support consistency in the sharing of best practice, the committee recommends a set of core common metrics to be agreed with the Convention of Scottish Local Authorities, and that those should sit alongside area-specific goals, allowing flexibility while enabling meaningful comparison.

In addition to our recommendations for improving the bill, the committee heard that complementary reforms in other policy areas are essential to maximise the impact of the legislation. Stakeholders consistently highlighted that procurement reform is key to enabling community wealth building. Proposals included lowering the threshold for mandatory consideration of community benefits; raising the threshold for regulated procurement and allowing direct awards to local suppliers where community benefits are evident; prioritising social value in procurement scoring; and standardising procurement reporting, particularly in relation to SMEs.

There were also calls to expand the definition of supported businesses to allow public bodies to restrict tenders by geography or company size; to streamline the asset transfer process and review the Community Empowerment (Scotland) Act 2015; and to strengthen powers of compulsory purchase and examine the possibility of the introduction of compulsory sale orders.

With the right support and complementary reforms, the bill has the potential to significantly improve the lives of people and communities across Scotland. The Economy and Fair Work Committee supports the general principles of the bill and looks forward to receiving further detail from the Scottish Government ahead of stages 2 and 3, should the Parliament approve the principles of the bill at decision time.