Boosting local economies. How can we grow what we aren’t measuring?
Early in 2025, the Scottish Government announced the world first Community Wealth Building (Scotland) Bill. This bill has reignited conversations around the opportunity that Community Wealth Building (CWB) could bring for Scotland and its people and places by enshrining into law new ways to build and retain wealth in our communities. This activity can support flourishing local economies, and considering SMEs make up 99.3% of all private sector businesses in Scotland there is a huge opportunity for this legislation to bolster their role in Scotland’s economic landscape.
“huge opportunity for this legislation”
CWB practices enable us to rethink and rewire our local economies around the people and places that they serve with the objective of increasing the flow, circulation and ownership of wealth. Using CWB, large public, private and third sector organisations (sometimes known as anchor institutions) working in collaboration can use their joint economic power including spend and employment to shine a light on how wealth and power leaks out of our economies, and how it can be redirected to benefit places. Traditionally CWB is delivered using five pillars, and for Federation of Small Businesses in Scotland (FSB) and their members, the procurement pillar is of particular interest.
CLES recently worked with FSB to investigate procurement spend with small businesses in different local authorities across the country, looking for a mix of geographies and engagement with CWB. When it comes to public procurement – our research wanted to understand the ability of smaller businesses to access and deliver local government contracts and in doing so – support local economies. Using a combination of focus groups, publicly accessible procurement reports and procurement spend data CLES investigated different procurement practices. And what we didn’t find was just as interesting as what we did.
“shaped the methodology of those we could investigate”
To understand how procurement is benefiting local enterprises, you need data, and if that data isn’t there, it makes the job of reporting much harder. This was one of the biggest challenges. There are not publicly accessible procurement reports available for each local authority in Scotland. When these reports are available, they do not report down to all classifications of SMEs, nor do they use a consistent methodology to set out their data, nor is the data itself available to be interrogated. Instead, using Tussell (a database which collates public sector procurement data through FOI requests) we attempted to interrogate procurement data but again found more gaps. Not all local authorities in Scotland are responding to the FOI requests from Tussell, and those that are, are not necessarily providing full data. This then shaped the methodology of those we could investigate, and the lessons we could draw from the data.
Our conversations with local authorities and FSB members showed how much appetite there was for more SME procurement, but also highlighted the capacity gaps across the board to enable this to occur. Local authorities were hopeful that the CWB legislation would enable more focus and enthusiasm for local procurement from within their leadership and chief executives, but were mindful that any focus on local spend did not get lost in localism politics. We’ve found that the focus on local and the geography of local authorities in relation to CWB can at times be unhelpful. Yes, growing the local supply chain and ecosystem of businesses is important, but our local authorities are very unique in geography, size and scale. They cannot be benchmarked against each other. Instead focusing on local, regional and national spend – making sure public sector procurement benefits Scotland more generally has to be the main goal of procurement. Procurement needs to be understood – not simply as a technical exercise but as a tool to help local authorities deliver their area based priorities. This means ensuring that local authority procurement policy is closely aligned with council and corporate strategies as well as development plans.
“supporting local businesses and enterprises is important to community wealth building, so too is strengthening the public sector”
Applying a community wealth building lens to procurement is not only about the localisation of spend but also about having a robust design and decision making process in place which helps service commissioners evaluate how outsourcing or insourcing to can deliver most effectively for the public interest. Whilst supporting local businesses and enterprises is important to CWB, so too is strengthening the public sector and delivering essential services with a public value focus. In our recent paper we highlight the additional benefits that insourcing and public delivery of some services can bring in economic, social and environmental terms. For our communities to flourish, all sectors in society need to be strong and resilient, working together in an ecosystem of support which delivers the widest benefits for all.
Our work with FSB has shown clearly the benefit that procurement through small businesses can provide to local economies. It has highlighted some of the challenges still present, and provides important insights for the Scottish Government and others as the legislation makes its way through parliament. Often the CWB pillars are viewed as siloed activities, however, taking a holistic understanding of their intersection is vital as we develop a nuanced conversation over CWB legislation and its importance across various sectors of economic activity. While procurement is important for community wealth building, understanding how it intersects across other pillars and how organisations large and small can embody CWB principles is essential as Scotland moves to take community wealth building to the next level.
