This article originally appeared in Responsible Finance.
Recent years have seen a growing number of local councils across the UK, including Birmingham, Sandwell and Wigan, as well as the devolved administrations in Scotland and Wales adopting community wealth building to develop collaborative solutions to local social and economic problems. In contrast to the UK Government’s much-touted levelling up agenda, community wealth building is a tested method for people-centred local economic development that brings real change to local places.
Community wealth building is about a more progressive form of local economics. It helps to increase the flow of wealth back into local communities enabling people to start businesses, develop skills and access jobs. One of the ways in which it does this is by harnessing the economic power of “anchor institutions”, such as local authorities, NHS trusts, colleges and housing associations, to strengthen the economic resilience, social cohesion and environmental health of local places. Through the strategic use of their spending, hiring and asset use anchor institutions can deploy their economic power to support the development and growth of local businesses. Ensuring that all businesses and social enterprises have access to fair and ethical finance is a key component of community wealth building.