The Community Wealth Building Bill has been passed by the Scottish Parliament, with ministers promising it will support investment in local and regional economies.
Under the legislation, councils, health boards and other public bodies will focus on the generation, circulation and retention of wealth in local and regional economies, says a release from the Scottish government.
Community wealth building is closely linked to the co-op movement, following experiments by the USA’s Democracy Collaborative in Cleveland, Ohio. Emulated in the UK by Preston City Council, with support from the Centre for Local Economic Strategies (CLES), it sees councils and other anchor institutions direct procurement to the local economy, alongside local policy to boost co-ops and social enterprises, and to help community groups acquire vacant buildings and land. Its principles have also been followed by members of the UK’s Co-operative Councils’ Innovation Network (CCIN).
Scotland’s public finance minister Ivan McKee said: “Community wealth building is an approach to economic development that can deliver sustainable growth and foster resilience in our local economies.
“This unique legislation will help to deliver more benefit from investment in local economies so that they become fairer, greener and more prosperous.
“It will also strengthen partnership working in our communities, and I look forward to working closely with public bodies to building on existing links.”
Neil McInroy, chair of the Economic Development Association Scotland, said: “We support the Bill because it marks a positive shift in economic development amid wider global crises and upheaval. Some local councils and many organisations across Scotland are already advancing community wealth building, and this Bill provides the enabling framework that secures that progress and deepens it.”
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McInroy, a former CEO of CLES who has worked extensively on community wealth building projects, added: “By changing patterns of wealth, it boosts productivity, helps tackle child poverty and cost‑of‑living pressures, and builds economic dynamism. Crucially, it advances economic democracy by giving communities, workers, and all of us a fuller stake in Scotland’s future.”
Stacey Dingwall, head of policy and external affairs (Scotland) at the Federation of Small Business (FSB) said: “FSB is a long-time supporter of the community wealth building agenda, therefore it’s welcome to see the Bill pass today.
“Opening up public procurement contracts to small businesses is crucial to boosting economic growth, yet many still face barriers to accessing opportunities. Passing this legislation gives us a real chance to make progress here. Investing more public money in local businesses is also an investment in local job opportunities, ensuring as much wealth as possible is retained in local communities.”
Community Land Scotland (CLS), which represents community landowners in Scotland, had previously welcomed amendments to the bill on its second reading “that significantly strengthen the bill’s potential to deliver tangible and lasting benefits for communities across Scotland”.
These, said CLS, include a strengthening of the definition of economic growth to be “inclusive and sustainable” and aligning it with the UN Sustainable Development Goals. “This recognises that financial wealth cannot be separated from social, cultural, environmental, and community wealth,” it added.
Another change, said CLS, reframed the measures to be set out in the Community Wealth Building Statement, from measures that Scottish ministers ‘may’ take to those they ‘must’ take, helping to ensure greater consistency and impact across Scotland.
It also welcomed “explicit inclusion of energy assets on the face of the bill, recognising the transformative role that community and local ownership of energy can have in increasing community wealth”.
Other amendments ensure that “common good property is used to deliver community wealth building, acknowledging the important role common good assets can play in local wealth creation, including through transfer to community ownership”, and introduce stronger monitoring and reporting requirements to enable a more holistic assessment of the progress of the policy across Scotland.
CLS also notes “more detailed guidance facilitating and supporting the development of community-owned renewable energy”.
The law makes Scotland the first country in the world to legislate for implementation of the community wealth building economic development model at national, regional and local level.
