Community Wealth Building (Scotland) Bill Fairer Scotland Duty Summary

Summary of evidence

CWB encourages actions across the five interconnected pillars (Land and Property, Spending, Workforce, Inclusive Ownership and Finance), to tackle structural inequalities, support business growth, create and retain employment opportunities and gives people a greater stake in the economy.

Evidence provided via the Poverty Alliance Get Heard Scotland programme as part of the consultation process on CWB reported that participants recognised the potential of this model in tackling poverty and inequality.^[2] The report gave seven recommendations to ensure that CWB is implemented in the manner that would reduce poverty and inequality. These recommendations included the need to ensure:

• CWB will tackle, rather than entrench, inequality;
• the strategic aims of CWB can be easily understood;
• a collective understanding what ‘community’ is defined as in CWB;
• proactive engagement with communities during implementation of CWB;
• capacity building for communities and anchor organisations;
• effective implementation of CWB actions; and
• that communities and community organisations can participate in the economic development process.

The Public Health Scotland Health Impact Assessment (HIA), published in December 2024, identified the likely impacts of implementing CWB in Scotland.^[3] The assessment concluded that CWB has significant potential to benefit health, help reduce health inequalities and achieve other positive outcomes. It also states that CWB should be recognised as positive health intervention as well as an economic development policy and approach.

The CWB Bill sets out measures that the Scottish Ministers and CWB partnerships may include in their CWB statements and CWB action plans, including the promotion of Fair Work.^[4] Evidence suggests that an increase in Fair Work practices (e.g. security of hours and payment of the real living wage) would increase living standards and narrow inequality for socioeconomically disadvantaged groups.^[5]

The Scottish Ministers and CWB partnerships are also encouraged to consider actions to support the development of new businesses, as well as actions to develop local supply chains. Such actions would create more employment opportunities through the creation of more sustainable local businesses.

Through their inclusive distribution of wealth, business models like co-operatives, b-corps, social enterprises or community interest companies can contribute to the reduction of socioeconomic disadvantage. Studies have shown that employee-owned businesses exhibit higher job growth and wage growth than businesses that utilise pyramidal company models.^[6] Actions to support an increase in the number of employee-owned businesses that pay employee dividends may result in more personal wealth for their employees.

Employee-owned businesses are also rooted in local communities. Stable employers with local ties are at considerably reduced risk of acquisition and relocation or closure by competitors,^[7] a process which can be particularly damaging for local economies in rural areas.^[8] Actions to support an increase in the number of employee-owned businesses supports the long-term resilience of local and regional economies and more secure employment.

There are also opportunities to reduce socio-economic disadvantage through the implementation of actions that support the establishment and expansion of micro-businesses in Scotland. Supporting these businesses to access finance and business opportunities could help to release the potential for these businesses to contribute more to reducing socioeconomic disadvantage.