Community Wealth Building
Giving communities the power to develop their local economies
Community Wealth Building is a people-centred approach to creating a more inclusive economy. It puts the economic development of local communities in the hands of the people who live there by redirecting wealth back into the local economy, and places control and benefits into the hands of local people.
Developed by the Democracy Collaborative in America through their pioneering work in Cleveland, it is championed in the UK by the Centre for Local Economic Strategies, and we believe that this progressive approach to local economics can build wealth and prosperity for everyone.
There are five core pillars of community wealth building:
Learn more about our approach to community wealth building on the video below.
1. Plural ownership of the economy>
Many local communities are subject to wealth inequality, where money that is generated within them goes into the pockets of distant shareholders instead of back into the enterprises, organisations and co-operatives that operate within that community.
Money that is spent within these kinds of enterprises, business and co-operatives tends to circulate within the local economy as they are more likely to employ local people, use local suppliers and pay tax.
People in these organisations also have a much bigger stake in the local community, caring more about what happens there. That means by putting the ownership of the economy back into the hands of those that live in the community, wealth is not only locked in place, but it also helps creates a more democratic economy that benefits everyone that lives in that area.
We contribute by helping communities take ownership of local assets in order to bring them back into the hands of the people that live there.
In 2018 we helped Newcastleton & District Community Trust through the Just Enterprise programme to acquire a number of local assets and help to develop them for the benefit of their community. It is a great example of plural ownership in action.
2. Making financial power work for local places>
Put simply, it means that community wealth building should increase the flow of investment within local economies by harnessing the wealth that exists locally.
There are an estimated 344,500 private business operating in Scotland, providing an estimated 2.12 million jobs. Of those businesses, 93% are “micro businesses” i.e. they employ less than 9 people. It is these kinds of small businesses that are vital to local economies, but for many of them they cannot get access to suitable funding in order to help them grow.
In order to make financial power work for local places, smaller businesses need to grow. To do that they must have access to funding.
DSL provide funding to micro businesses and have distributed over £5m in loans over the last two years, which has helped create 481 new jobs and maintain 264. We work hard to try to close this gap so we can make local economies stronger.
In this blog Executive Director for DSL, Stuart Yuill explains how we can reduce the finance gap for micro businesses so that we can help them support local economies better.
Two Edinburgh businesses producing healthy foods have received a combined total of £75,000 in loan funding from DSL Business Finance Ltd, helping them create new jobs and allowing them to invest in their local community.
3. Fair employment and just labour markets>
Local anchor institutions are not only the biggest employers in a community, they have a huge impact on the prospects of local people. Paying the living wage and retaining local talent from lower income areas are crucial to ensuring that local communities thrive and can help improve local economies as a whole.
Across the UK there has been a rise in zero-hour contracts and in-work poverty, meaning that the reality of employment for many in the country is increasingly unstable. In smaller communities, such as North Ayrshire, this increase can have a devastating effect on people and economies.
CEIS Ayrshire has been instrumental in supporting North Ayrshire Council’s drive to create fair and meaningful jobs that pay the living wage for local talent. This includes providing training to those that need it, helping people in hard-to-reach areas, and offering business services to local organisations.
General Manager of CEIS Ayrshire, Stephen Hamill talks about how they have helped residents of North Ayrshire address in-work poverty.
Find out how CEIS Ayrshire’s employability services are helping people successfully gain employment by helping them upskill and more.
4. Progressive procurement of goods and services>
Developing dense local supply chains of businesses likely to support local employment helps to retain wealth locally. These include SMEs, employee-owned businesses, social enterprises, co-operatives and community businesses.
For communities to thrive local resources and wealth must be retained. That’s why the progressive procurement of goods and services is one of the five pillars of community wealth building – by developing supply chains of local businesses, communities will reap the benefits of employment as well as helping to bolster the economy.
Since our inception we have engaged with private and third sector companies to help them add third sector enterprises to their supply chain. We have also helped organisations become part of the supply chain so that their goods and services are available to all.
In 2020/21, 85% of our expenditure was with third sector suppliers, and we regularly track our annual spend to ensure that we use our purchasing power to build capacity and experience within the sector.
Our Team Leader for Enterprise and Communities, Roddy Stewart discusses the benefits of procuring goods and services from local businesses, and how to address some of the barriers some organisations may face.
5. Socially productive use of land and property>
By taking over ownership of local land and property assets, local communities are able to better create spaces that generate wealth for local citizens, rather than for private landlords and distant shareholders. When such assets are taken into community ownership, it gives people an opportunity to develop spaces and services that address unique local issues, all whilst helping to contribute to a thriving local economy.
We’ve had a hand in helping many local communities purchase land and property from local governments and private landowners over the years as we believe community ownership is vital to the creation of a more inclusive economy in Scotland.
Our Business Development Manager, James Finnie discusses the importance of local organisations taking control of their own destiny by taking land and assets back into community ownership, creating real benefits in their communities.
In 2018 we helped Newcastleton District Community Trust to acquire a number of local assets and help to develop them for the benefit of their community. It is a great example of plural ownership in action. Read about how we helped them in this Just Enterprise case study.
If you would like to learn more about community wealth building, its origins and more, then please take some time to look at the following resources:
The Democracy Collaborative
The Centre for Local Economic Strategies (CLES)
The Economic Development Association Scotland (EDAS)
Scotland’s Regeneration Forum (SURF)
Scotland’s Centre for Regional Inclusive Growth