Our response to the Scottish Government’s consultation

As Sarah Longlands shared at the end of March, we have been delighted to be able to work with partners and friends across Scotland over the last few months to understand their views on the Government’s proposals for a Community Wealth Building Bill.

This legislations would be a powerful step forward in enabling the democratisation of our economy and would be progressive global first – that it could happen so close to home is immensely exciting. The government’s consultation closed on Tuesday this week and below we share our responses to the questions posed. We would be delighted to hear your thoughts too – please do get in touch if you would like to discuss any aspects of our response, the items under consultation or the development of community wealth building in Scotland or anywhere else.

The consultation asked respondents to consider three proposed approaches to a duty to advance community wealth building. When asked which of these approaches we felt the duty should take, we replied:

Our view, and the view of those we spoke to at a consultation event we hosted in Edinburgh on 20 March was that option C (a combined option featuring a union of options a and b) was likely to provide the strongest support to areas in implementing community wealth building. It is vital that ministers across all areas of Government consider community wealth building as one of the central components of a wellbeing economy: this approach would ensure that there will be buy-in and leadership from the centre alongside delivery on the ground.

On the question of which public bodies should be prescribed to embed community wealth building into their plans we feel that the existing community planning partnerships (CPPs) offer a strong existing framework for involving the appropriate public bodies as well as both the VCSE and the private sector, while also having the local knowledge to determine what is most relevant to them and the areas they serve.

“develop clear messaging on how those who are not ‘the usual players’ will benefit”

That said, a duty represents an important opportunity to bring those who are traditionally more reluctant to engage with this agenda to the table. To mitigate the risk of missing those who would not normally engage via CPPs, the Scottish Government should give thought on how to develop clear messaging on how those who are not “the usual players” will benefit from the approach and why their involvement is needed.

While we think having a statutory duty for community wealth building is important, we also think that this needs to be implemented in a way which builds on the important work being undertaken in local areas across Scotland to implement community wealth building already. This means that the duty needs to both empower partners at the local level to expand and build this work whilst putting pressure on national agencies to prioritise community wealth building locally, for example, through the allocation of resources and staff time.

The consultation then asked us to consider whether statutory or non-statutory guidance could support partners in meeting the proposed duty. We responded:

It is our view that non-statutory guidance would be the most suitable route to support any proposed bill. However, we would caution that a great deal of the value of any guidance is derived from its tone and intent.

We note a degree of ambiguity in the wording of the duty proposals listed in question 1a, particularly as relates to the use of the word “embed”. There is a spectrum of interpretation available to its use in this context: a body or group of bodies could embed an approach by essentially “paying it lip service” in key documents, or the same approach could be the fundamental cornerstone of all of that body’s strategy, operations and culture, for example.

“many local authorities and their partners across Scotland have embraced the community wealth building agenda”

We have been privileged in our work at CLES to witness over the last several years the extent to which many local authorities and their partners across Scotland have embraced the community wealth building agenda as a means to improve the lives of those who need it most. Any duty and the guidance that supports it should be focussed on reinforcing this work and enabling others to do the same. We would recommend that any guidance draw from EDAS and CLES’s Implementing Community Wealth Building: A Guide. And, that the guidance should take seriously the interconnectivity of the community wealth building pillars. Acting through these five pillars as part of a well-planned strategy has been shown to deliver transformational change.

When asked if there were other non-legislative measures required to accelerate the implementation of the community wealth building approach in Scotland we replied:

Yes. While community wealth building is framed by a set of principles, its delivery requires the dissemination and adoption of progressive practice, which continues to evolve. To this end, it is widely accepted that disseminating knowledge and evidence is as much about hearts and minds as it is about how-to guides or basic training exercises. Part of the reason for this is the implicit rules, cultures, and realities that dominate the day to day lives of people working in particular organisations. They often make it difficult to implement new ways of doing things. New, sometimes complicated, information arranged in a particular and apparently logical order needs to be digested by practitioners and made sense of in its own context.

“communities of practice are able to bring together a range of local practitioners to offer each other peer support”

This is why CLES uses a combination of community of practice, as well as intermediaries or change agents on the ground to address this challenge. These communities of practice are able to bring together a range of local practitioners to offer each other peer support in order to explore community wealth building and its implementation in a range of different contexts. These evidence-based interventions have a proven track record in bridging the gap between new action and the inertias of existing culture and rules, helping practitioners to make sense of codified information, access good practice and navigate through different organisational contexts.

As such, Scottish Government should consider funding similar interventions to support its new legislation. This could build on the success of CLES’s work with EDAS, funded by Scottish Government, which ran a series of community of practice with Scottish councils, as well as CLES work in England where we support a number of anchor network coordinators (dubbed community wealth builders in residence).

The consultation asked if respondents to consider any specific actions required to advance delivery of the items contained within the Shared Policy Programme (outlined on page 11 here). We responded:

Delivery of the items contained within the Shared Policy Programme outlined on page 11 of the consultation paper are already being delivered by organisations across Scotland and the UK within the existing legislative parameters.

“public sector managers and administrators do not always understand or appreciate the direct impact that they can have”

However, often there is a clear disconnect between the way in which public money is spent and the types of outcomes that the Scottish Government seek to prioritise as part of a wellbeing economy (for example, decent jobs, good health, support for young people, addressing poverty and enterprise support). This is because public sector managers and administrators do not always understand or appreciate the direct impact that they can have on these outcomes and on the local economy through, for example, their spend, assets and employment power. Food is a case in point where procurement and menu design (eg in schools and hospitals) is disconnected from the environmental and wellbeing impacts of food.

There are a range of actions that can be taken to help advance and accelerate the delivery of these items including:

• Mapping spend within anchor organisations such as hospitals, schools and councils to understand how public spend is impacting on communities in terms of good job provision and micro and small business support, particularly areas with high deprivation.
• Developing anchor networks to develop change at scale, for example, the development of new types of intervention which enable organisations to work alongside each other to use community wealth building to address local challenges, for example, to tackle recruitment challenges by ensuring that residents in areas of high deprivation are able to access training and good job opportunities within anchor organisations (for example, the I Can mode l in the West Midlands). Anchor networks can also enable joint action on procurement and asset management.
• Disaggregating larger procurement contracts to make sure that they are accessible to smaller businesses and their supply chain.
• Enabling local stakeholders to ‘opt out’ of national procurement frameworks ’– within the NHS, for example. In addition, enabling and incentivising the restructuring of school food supply chains to help prioritise and value the benefits of local food production and processing.
• Support also needs to be put in place to help create and make markets for local supply chains including support for local businesses and social enterprises including training on how to access tenders. Existing practice on this can be found in Wales.
• Insourcing also provides an important and direct opportunity to take control of public expenditure so that its economic impact can be maximised – particularly where the supply of suitable local providers is limited (potentially making these contracts vulnerable to extractive providers).

The final sections of the consultation asked respondents to consider whether there are ways in which the law could be changed to advance the individual pillars of community wealth building. Our responses for each pillar are below.

Spending

Yes. The Scottish Government has opted not to join the UK Government Bill and will retain their own procurement regulations in respect of devolved Scottish authorities. This is similar to how the current regulations operate, with the Scottish Government having transposed the EU Directives into their own statute book.

Nevertheless, there are elements of the UK Government Bill that would help facilitate the spending pillar of community wealth building. In particular, for example, the Bill creates a requirement for public sector buyers to break down contracts and increases the thresholds at which formal procurement processes kick in. The bill also formalises the ability to “reserve” contracts for UK SMEs and/or social businesses, making it harder for international suppliers with huge economies of scale but few roots in an area to undercut local suppliers. Scottish government should consider adopting similar legislative changes.

Workforce

No. In our work across Scotland we have been pleased to witness a great deal of activity in this area which is unencumbered by devolved areas of employment law. Our sense is that any changes that would create a significant impact in this area would be reserved to UK Parliament (for example, raising the Living Wage). As such we would concur with the stakeholders contacted through early engagement and would encourage the Scottish Government to consider how it can better enable anchor institutions to use the employment powers they already have, to create good jobs that work for people and to recruit from the places that need it most.

Land and property

No, but the importance of land and property pillar should be emphasised in the non-statutory guidance. While traditional economic development and planning approaches might only measure the value of these assets in economic terms, developing a wellbeing economy should see these assets harnessed to serve wider goals.

In particular, and in terms of land and property disposal, this is about viewing these assets as more than just a commodity. Despite the pressure to sell-off surplus assets to maximise financial return, CPP partners should be encouraged to consider whether any surplus land and property could in the first instance be used as a development site for affordable housing and/or support more SMEs and other forms of progressive local enterprise to play a greater role in the local economy. Opportunities for local businesses to supply local anchors with more of their goods and services may require these businesses to grow and diversify which, in turn, may generate the need to find new business premises. As such, where feasible, surplus land and property should be developed to support this end.

“the sale of land and property assets can be one of the most extractive forms of local economic development”

The work of the Scottish Land Commission is highly complementary to the community wealth building agenda in Scotland in that it has sought to support organisations and communities who want to intervene in the public interest, for example, through compulsory sales orders. However, there is more that could be done to recognise the complementarity between this work and community wealth building, for example, in the local planning process but also to emphasise the market shaping role that local authorities and their partners have in local economies and how they could use this power to raise standards and address inertia in local land and housing markets.

The sale of land and property assets can be one of the most extractive forms of local economic development and it is therefore important that the Scottish Government continue to encourage local authority planners to do more to diversity local ownership of assets and improve transparency around who owns land and property and their motives.

Inclusive ownership

Yes. While Marcora-law style proposals relate to areas which are reserved to the UK Parliament, there are a number of related suggestions which could be implemented by the Scottish Government. For example, a statutory commitment to the long term objective of re-orienting the Scottish economy towards a significantly greater proportion having inclusive ownership models would support ambitions on employee ownership, social enterprise growth and other models.

“activity may be limited by the existing provision for business support in localities”

However, it should be noted that this activity may be limited by the existing provision for business support in localities which is often fragmented, with piecemeal elements provided by various public and private agencies, many of whom often have little understanding of the unique needs of social businesses. We would urge the Scottish Government to consider how business support could be developed into a more cohesive picture for places and to supplement this with a duty for public bodies to promote inclusive ownership models in economic development and business support activity. Care should be taken to ensure that an approach of this kind is not considered in isolation and should particularly relate to progressive procurement approaches.

The Government could also explore the potential development of a state holding company capable of holding distressed business assets to be acquired through a debt-for-equity approach to business support as an alternative or accompaniment to government business grants in times of national crisis.

Finance

No. However, relevant ministers should consider proposing a community wealth building inspired framework to facilitate the use of key sources of financial power, such as its current City Region Deals as well as UK government levelling-up and shared prosperity funds.

CLES has worked recently with the Capital City Partnership and Edinburgh and South East Scotland to develop such framework to guide and influence the Region’s current deal. The framework focuses on strategic intent, impact, growing local SMEs, supporting alterative models of ownership and maximising skills and employment opportunities for all. This could easily be adapted and utilised for the other sources of financial power highlighted above.