This update is part of a regular series of rundowns of policy developments and reports on our work in Scotland, by CLES Senior Researcher and Scotland lead, Naomi Mason.

The good, the bad and the opportunities

Last week was a busy one for policy and fiscal announcements in Scotland. Tuesday morning started positive, with the launch of Developing Scotland’s Economy: Increasing the role of inclusive and democratic business models, a report committed to in the National Strategy for Economic Transformation. But later that day the fiscal pre-budget announced budget cuts and difficult economic decisions around public spend, while Wednesday saw the launch of the 2024-25 Programme for Government (PfG). As the title of this blog indicates, the three announcements produced quite a mixed bag of policy and legislation and there was a lot for those of us concerned with the future economy of Scotland to digest over the weekend.

“Scotland could soon claim a world first”

Starting with the positive, we at CLES are delighted to see community wealth building legislation coming forward in the PfG. Scotland could soon claim a world first by delivering this ground-breaking legislation which supports a framework for economic development practices which challenges economic extraction and supports local economies to flourish. If this legislation can unlock opportunities for Scotland’s SMEs to bid for public sector contracts, as well as making it easier for those in the third sector to undertake them too, then the economic opportunity to encourage wealth to flow to our local places will become far easier.

The launch of the inclusive and democratic business models report (which my colleague Tom Lloyd Goodwin and I both contributed to) also represents a real chance for Scotland to pioneer how it unlocks, grows and strengthens the broader social economy. Previous research demonstrates clearly how important democratic ownership models are for a fair and flourishing place-based economy. Achieving the 17 recommendations in the report will take commitment from national and local government, as well as support from across the wider public sector and the third sector, but the transformation that achieving these recommendations would bring to our nation, cannot be understated.

“many of these cuts will run in opposition to the stated aims of the PfG”

Now to the less positive. The pre-fiscal budget cuts of £500m will have a significant impact on Scotland’s public services and the ability to build the fairer economy we all want to see. Many of these cuts will run in opposition to the stated aims of the PfG of eradicating child poverty, growing the economy, tackling the climate emergency and ensuring high quality and sustainable public services. Making cuts to initiatives which support sustainability (for example, free and capped fare public transport), may harm the public sector (like recruitment freezes) and will squeeze the health and social care sector further (cutting universal free school meals and reducing health and social care budgets) will not aid child poverty, the climate emergency or help public services. The use of the ScotWind money to plug budget gaps particularly feels short-sighted when there could be such potential to use it to tackle the climate crisis. After all, once it is spent, it is gone – quite literally – with the wind.

“a weakened public sector finds it harder to strategise, collaborate and nurture”

The financial pressures on Scotland’s economy are clear, but cuts to the public sector – especially when in a reactionary rather than strategic fashion – will only exacerbate the difficulties. A weakened public sector finds it harder to strategise, collaborate and nurture the opportunities to ensure economic development can occur meaningfully and all people have an opportunity for fair and rewarding employment. What is more, it further erodes the stability of places and their communities on which private sector investment depends and the Government have pinned much of their hopes for the future.

The Scottish Parliament Information Centre created the helpful word cloud and word links charts above. The frequency of words said however, does not necessarily translate into action or policy. Communities and local were referred to frequently, but, neither are connected clearly across different agendas or policy. Saying the words is not enough, without strategy and meaningful action behind them.

The Scottish Government runs the risk of tacking community wealth building on to the PfG as a self-contained policy agenda, when really it should be the golden thread running throughout it. We urge ministers to be bold and to see the opportunity community wealth building can present across the themes for the PfG: increasing fair employment opportunities will address child poverty rates; encouraging fairer financial flows will support and grow the economy; productive use of land and assets and building more democratic ownership of the economy will help tackle the climate crisis; and, building local supply chains for procurement can ensure better public services.

“we need to advocate for a joined-up approach”

Dropping the Wellbeing and Sustainable Development Bill from the PfG shows both a lack of connectivity across policy and legislation and of long-term vision of the direction of travel for the Scottish economy. Scotland pioneered the wellbeing economy agenda and has translated the community wealth building approach as a way to move towards that destination. For those of us who want to see a better and fairer economic system, we need to advocate for a joined-up approach to policy and practice.

Scotland has a great opportunity to take community wealth building and embed it into the legislative context. This would provide a learning opportunity across the globe for how to deliver inclusive and progressive economic development practice which supports the Scottish economy and fosters an economy built on resilience, enterprising people and places and not depleting the environment.

“the possibilities are endless”

Of course, it goes without saying that legislative changes could ease community wealth building’s path and would no doubt be a great thing for the movement. But it’s also worth remembering that in many places around the UK and the world it is already being delivered (with huge success) on the ground. With more and more people feeling the benefits community wealth building can bring, there is nothing to stop people and places getting on with it themselves, legislation or no. In that case, the possibilities are endless.