Hansard

I am pleased to have the opportunity to update the Parliament on the progress that is being made in advancing the community wealth building model of economic development across Scotland. I will also set out the Scottish Government’s future ambitions for CWB.

At the core of the intention of community wealth building is the desire to retain more wealth in local areas by creating and sustaining more jobs, growing local firms and enabling local communities to own more assets. I do not think that it is presumptuous on my part to assume that all members share those aims.

By working in partnership with businesses and communities, Scotland’s public sector can deliver CWB policies by enabling more small, medium-sized and third sector enterprises to win public sector contracts; encouraging the adoption of fair work practices by more employers; placing communities at the centre of dialogue about the ownership and use of public sector assets; supporting the growth of local businesses and new forms of inclusive and democratic business models; and attracting new ethical investment and encouraging growth in the lending market. The areas of impact that I have highlighted mirror the five pillars of the community wealth building model: spend, workforce, land and property, finance and inclusive business models.

I have travelled around Scotland to meet those who are involved in CWB activity across those five pillars. For example, I visited Mossgiel organic farm in East Ayrshire, which was awarded a contract by the local authority to supply milk to schools in the council area.

Public procurement in Scotland contributes hugely to community wealth building ambitions. The most recent figures, from the financial year 2021-22, indicate that, of £16 billion of public procurement spend, £8.9 billion was spent with businesses with a Scottish postcode, and a high proportion of that spend was with Scottish small and medium-sized enterprises. I know that the Federation of Small Businesses in Scotland is positive about the potential of CWB. Indeed, CWB is an example of the new deal for business in action.

Public procurement rules apply when the value of a contract exceeds a certain threshold. Respondents to the community wealth building bill consultation called for those thresholds to be reviewed. My colleague, the Minister for Public Finance, confirmed before Christmas that the Scottish Government will look again at those thresholds, and more detail on that will follow in due course.

On the workforce pillar, many construction firms, for example, are working to develop fair and sustainable job outcomes for local people. One example involves Balfour Beatty working in partnership with the Civil Engineering Contractors Association Scotland and the University of the Highlands and Islands to promote CECA’s academy programme, which offers local people the opportunity to upskill in civil engineering. Through our fair work first approach, the Scottish Government took action in 2023 by introducing a requirement for public sector grant recipients to pay at least the real living wage to all workers and to provide appropriate channels for an effective workers’ voice, such as trade union recognition.

Turning to the land and property pillar, the Community Empowerment (Scotland) Act 2015 provided a framework to promote and encourage community empowerment and participation. In July 2022, I launched a review of the act, which focused on legislation that enhances community participation, community control of public assets and community planning. The two-year review recently concluded and a main report will comment on the act as a whole, while two further reports will provide findings on participation requests, which enable a legal route for community organisations to be involved in local service delivery and community asset transfers. Those reports will be published in the early part of this year.

On supporting new inclusive business models to grow, Social Security Scotland is an active member of Dundee City Council’s public sector anchors network and has developed its corporate procurement strategy to reflect CWB principles. It has set out how it will actively build supply chain resilience by working with supported businesses, small and medium-sized enterprises and the third sector.

I have seen how CWB’s influence has shaped local health services in Dundee. Newfield medical centre is one of the first general practitioner practices—if not the first—to run as a co-op in the UK. The team there successfully took over the practice from the local health board in 2022 and it has seen significant growth since then, including profit that has been redistributed, leading to increased employment and the setting up of successful projects that benefit the community.

Finally, exciting new developments in finance are assisting new community wealth building projects to thrive. Linlithgow Community Development Trust works with local community sports and meeting facilities to support renewable energy. The trust used community bonds to secure the necessary finance for local people to undertake a pilot renewable energy project with a local golf club.

Communities are at the heart of the Scottish Government’s renewable energy ambitions, and we are committed to working with industry to ensure that the delivery of renewable energy comes with benefits for people in Scotland, including shared ownership and community benefit opportunities. Scotland has made good progress with that approach. Our national community benefits register indicates that more than £30 million-worth of benefits have been offered to communities across Scotland in the past 12 months alone.

I turn to the Scottish Government’s future ambitions for CWB in Scotland. In order to learn from international experience, I was given the privilege of visiting Cleveland, Ohio, where CWB has its roots. Cleveland, like Preston in the north of England, where CWB was adopted early in the UK context, suffered from rapid deindustrialisation and its aftermath of high levels of unemployment, depopulation, poverty and deprivation. I witnessed a form of economically-driven rebirth in Cleveland through the formation of new co-operative businesses contracting with large local anchor organisations in the health sector and other areas. Cleveland and Preston continue to experience similar problems, as do many Scottish towns and cities.

This Government is ambitious for all of Scotland’s communities. We will continue to invest heavily to strengthen the hand of our villages, towns, cities and regions, while acting to ensure that the social security system provides a robust safety net for those who experience poverty and hardship.

In particular, the Government is focused on ridding Scotland of child poverty and all the harm that it can cause throughout a person’s life. Community wealth building, as both a strategic and practical model of economic development, provides a new opportunity for us to create a space between a supportive and progressive welfare state and a thriving new economy, spearheaded by innovative new sectors and growth clusters developing across Scotland.

Some proponents of community wealth building use the phrase “Free distribution, not redistribution”—meaning achievement of an increase in assets owned or income earned by communities or local businesses and households, respectively. If that can be achieved, it could lead to a reduction in our reliance on social security. However, change like that will always take time. While we must invest in a person-centred social security system now and seek to grow the dynamic and progressive economy of the future, the community wealth building model can help to knit together opportunity and need by forming part of the necessary connection between economic development, led by the public sector, and those communities where people are looking for new opportunities to build and maintain household and collective wealth.

The CWB approach offers something new in the Scottish context: a space for strategic and place-focused brokerage and a conversation focused squarely on economic development and fair and responsible growth.

Given the long history of relevant contributory work in Scotland, I can accept that there will be different views of what community wealth building is or should be. It is a clear economic policy. Public sector investment in health, housing, energy and many other areas is relevant. However, the aim of CWB is to ensure maximisation of the economic agency of all investment power together. Not all of the examples that I mentioned earlier are born of discrete community wealth building policies or actions plans; rather, they are clearly relevant activity to achieving community wealth building ambitions.

People who ask what community wealth building is will get two answers from me. The first is that it is an operable place-focused model of economic development, the pillars of which can guide the use of all of the money at the disposal of the public sector. The second answer is that, in activity terms, relevant actions are wide and varied. However, at CWB’s core is the idea that every public pound spent has the potential to drive economic growth and to realise fairness and prosperity.

The current programme for government includes a commitment to introduce primary legislation on community wealth building in this parliamentary year. Work on that is in train, informed by a public consultation conducted in 2023. The programme for government also noted that a local government-led community wealth building “practice network” should be created. That network is now in place, and is proving effective in facilitating engagement. Among its key roles will be working with the Scottish Government on how we can better measure the practical impact of community wealth building across Scotland.

Members will understand that parliamentary process must be respected, and I cannot answer questions today on potential provisions in the forthcoming legislation. However, I look forward to working with colleagues when the legislation is introduced. My door will always be open for discussions on how we can make community wealth building as impactful as possible in driving economic growth that is fair, environmentally responsible and sustainable.

Community wealth building has a long history of work aimed at ensuring that as much wealth as possible can be retained in communities and that the damage caused by rapid removal of economic activity in many of our industrial communities is addressed. In community wealth building, we have a very practical policy approach for all of Scotland’s public sector to pursue in partnership with business, the third sector and communities—an approach that can, in a more consistent way, bring all relevant activity together to revitalise an approach to local and regional economic development that is focused on real places and on delivering for people and communities.