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Community Wealth Building: plural ownership for a better Scotland

Posted in: Blog.

a group of people having a meeting

Almost one-in-five people in Scotland live in poverty. Indeed, the top ten percent of the population have more than 24% more income than the bottom forty percent of people combined. This is not just localised to Scotland – as a whole, the UK is the fifth most unequal country in the world, where 44% of the country’s wealth is owned by 10% of the population.

As damning as these statistics are, they demonstrate one point very clearly: traditional economic practices are failing to address the issue of inequality. Issues that have only been compounded by years of austerity followed by a global pandemic and the current cost of living crisis.

Local communities can, and we would argue should, be pivotal in addressing this issue because it is at a local level we find that wealth generated by workers, people, businesses and communities in Scotland’s towns and cities is flowing, overwhelmingly, into the pockets of shareholders with no connection to local life.

So, what is the solution? We believe that Community Wealth Building is the answer. As defined by CLES, it’s “approach is rooted in the European Social Democratic tradition, in which the state works to protect public values and achieve good outcomes for citizens.” It is a response to the challenges outlined above, and is based on five key pillars:

  • Plural ownership of the economy
  • Making financial power work for local places
  • Fair employment and just labour markets
  • Progressive procurement of goods and services
  • Socially productive use of land and property

You can find out more about our approach and ambition for Community Wealth Building in Scotland in this video, but in this article, we’ll be talking about plural ownership of the economy, and how it is an important piece in building a successful and prosperous community that delivers for its members.

Why plural ownership is vital to building a successful community

There are three reasons why plural ownership is so important:

  1. It addresses wealth inequality. As stated earlier, most of the assets in our society are held by very few people. It has been shown in numerous studies that more equal economies tend to have happier and healthier people, so quite simply pluralistic ownership means that there are more locally, cooperatively, socially owned assets to help address that inequality. Ultimately, this helps to create happier and healthier communities for us to live in.
  2. Money spent within social enterprises, local businesses and cooperatives tends to circulate within the local economy. That is because they’re much more likely to employ local people. Businesses use local suppliers within their supply chains, and they also pay tax, whereas large multinationals tend to offshore their profits to reduce their tax base. This means that on a national level there’s less tax to go around, and on a local level, the money simply leaves the economy when it’s spent with a large corporate rather than being spent within the local community.
  3. Local enterprises, social enterprises and cooperatives tend to be more involved and have a bigger stake in the local community. Those working in them and involved in their governance tend to be from the local area and thus care much more about what happens there. This means that they don’t just care about their business, but they care about the local area in its widest sense. Social, cooperative, and local ownership gives people a real stake in their local community, which is a powerful thing.

If we want to build an economy which engages the maximum amount of people, we must build a more democratic economy. That not only means more equality when it comes to asset ownerships, it means giving people a specific voice within the local economy and doing that through pluralistic ownership.

How CEIS work with different enterprise models

CEIS has traditionally worked across all the enterprise models such as social enterprise, community ownership, cooperatives etc.

Our main parent company, CEIS Group, is most well known for working with social enterprises. However, we have a strong focus in local economic development, and this means that we can work with social enterprises or worker owned businesses to provide business support to help them grow and strengthen their business.

At CEIS Ayrshire we help develop local workforces. We help local businesses as well as local authorities, municipal ownerships, social enterprises and cooperatives and work with them to help develop their own workforce, and to make sure that there are better, well paid jobs for people in local communities.

With DSL we provide financing, typically to local SMEs, but we have worked with social enterprises and other business models as well. We offer businesses the finance that they need to grow and gain a greater share of their local economy.

We also work with community land trusts to help them distribute the funds that they generate from well performing assets, which in turn helps develop the local economy.

And finally, with Social Value Lab we work with any businesses that are interested in social value, be those social enterprises, municipal enterprises, cooperatives, and private enterprises; if they are interested in understanding the social impact of their work, then we help them measure that impact and communicate it to others.

Why working collaboratively with different enterprise models works better for communities than working in silos

Working in a place-based approach recognises the fact that different business models are needed at different times.

Although asset locked social enterprise is a great business model, sometimes it’s not the right business model. Working on a place basis means that you’re able to come at problems from a whole range of different angles to find a solution that works for that place.

So, for example, if you wanted to be a local energy co-op, you could work with other local co-ops. Whilst co-ops aren’t strictly asset locked in in the way that social enterprise would be, it is still collectively owned by everybody that participates in that co-op. By working across the different pluralistic business models, you can really put the local area first.

Of course, at CEIS, we’ll always have a passion for social enterprise, but what we want to do is to create better, stronger, healthier communities for people in Scotland.

The future we would like to see at CEIS

The discussion of why plural ownership is so important naturally brings us to our final point: the kind of future we want to see, and help build, at CEIS.

Put simply we’d like to see a future in which the local economy works for everybody that lives in Scotland.

We’d like to see a future in which your energy assets are locally, socially, and cooperatively owned. We’d like to see a future in which our high streets, our towns, our cities, and our villages are owned in a way that doesn’t just support profits for pension funds and overseas investors, but in a way that helps create vibrant places that we all want to be part of and that we all want to be in.

We want to see a future where nobody lives in housing poverty, or fuel poverty or, in fact, in any kind of poverty at all. We want to see a future in which Scotland’s economy wants to create the best communities and the best life possible.

We believe that Community Wealth Building is a great way to achieve this, and we believe that plural ownership of the economy is the way in which communities can generate wealth that benefits everyone within it. For almost 40 years CEIS has helped to support social businesses in building a more inclusive economy. Plural ownership, and the various models of enterprise ownership that it encourages, is the next step in ensuring that the income and wealth generated in local communities stays within them, and that’s a fundamental part of the future we want to see, and the country we want to help build.

Join us on our LinkedIn, Twitter and Instagram as we discuss Community Wealth Building and our position on it over the rest of May.

Got a social business that needs support? Get in touch today.

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