Applying Green Book Guidance in Light of Scotland’s Community Wealth Building Act

The revamped Green Book is not the only significant change for economic development in Scotland this year: in February, the Scottish Parliament passed the Community Wealth Building (Scotland) Act.

While CWB and its applications are not new in the UK (indeed, Preston was an early adopter in the early 2010s), the Act establishes it as the framework to be used by local authorities across Scotland. Under its provisions, all 32 local authorities will need to develop and deliver, as far as practicable, Community Wealth Building Plans. This formalises a process that’s taken root over the past few years with, for instance, Clackmannanshire, Fife, Glasgow City Region, the South of Scotland and the Western Isles all developing similar plans.

What is Community Wealth Building?

Community Wealth Building (CWB) is an approach that seeks to support local economic development through the actions of anchor institutions (large local public, private and third sector organisations) across five pillars:

• Spending: anchor institutions should use their spending powers to support local supply chains;
• Workforce: support to fair work practices and a living wage;
• Land and Property: allocation of land to local organisations;
• Inclusive Ownership: support to ownership forms such as cooperatives or employee-owned businesses; and
• Finance: ways in which financial institutions could support local economic development.

The Community Wealth Building Act is reshaping economic development in Scotland with potential lessons for the rest of the UK.

Green Book Appraisals in the era of Community Wealth Building

So, what does a Green Book approach mean in the context of the Community Wealth Building (Scotland) Act? There are at least two ways of looking at this: CWB as a project’s aim (the what) and CWB as the means of a project’s delivery (the how).

The first approach was adopted by councils in Ayrshire back in 2020, when as part of the Ayrshire Growth Deal, £3 million went towards a Community Wealth Building Business Fund. These included supporting over 200 businesses navigating public sector procurement; helping businesses to change their ownership structure to that of a cooperative or employee-owned business; and giving grants and support, including in developing Fair Work Plans.

The merits of a similar approach lay in the creation of activities that are in line with the principles of community wealth building and that provide the economic infrastructure to develop an economy rooted in shared wealth.

Community Wealth Building can act both as the aim of an intervention and as the framework affecting how a project is delivered.

CWB may also change considerations around the how rather than the what of a project. In addition to affecting the Strategic Case, the Community Wealth Building Act and its principles are likely to affect four elements of option development: scope; delivery; implementation; and funding:

• Scope: a CWB approach would suggest a focus on high levels of local additionality both in terms of beneficiaries from a project as well as supply chains, with limited leakage. Further, under the CWB Act, the Scottish Government is required to produce a community wealth building statement that “reduces economic and wealth inequality between individuals and communities in and across Scotland and supports sustainable and inclusive economic growth in line with the United Nations sustainable development goals”. A similar focus aligns with the revised Green Book’s stress on distributional and place-based analysis.
• Delivery: for instance, focussing on delivery by local anchor institutions that have already a focus on local economic development (e.g., local skills providers, key employers and local authorities).
• Implementation: allow time for community involvement and building consensus in the development of a given proposal. This will ensure the project is developed accounting for the system of community activities already in place.
• Funding: considering the potential for community benefits or community applications and uses from a given project.

As for any legislative change, there is a degree of uncertainty on what the Act will mean in practice and how it will affect socio-economic and wider outcomes. One thing is certain: as an example of policy variation, the CWB Act will provide a policy experiment from which lessons could be drawn across the rest of the UK.

Andrea Magnaghi is Director at BIGGAR Economics, who are iED Organisation Members.

Would you like to write for the iED? As part of iED individual and organisation membership, ALL members have the opportunity to publish articles on our website. We are now seeking ideas for contributions from members, including those in our Early Career Network. These can be around any aspect of economic development, insights on work you are undertaking and project successes you would like to share, or any viewpoint you would like to express. If you have an article proposal please contact: Jac Jordan, Institute of Economic Development PR consultant, Tel: 01706 214 340/  07887 416 182, email: jac@vivapr.co.uk