Community Wealth Building (Scotland) Bill: island communities impact assessment

Island Communities Impact Assessment Results

1. Introduction

This Islands Communities Impact Assessment (ICIA) has been carried out according to Scottish Government Guidance and duties within the Islands (Scotland) Act 2018. As such, this assessment has considered the impact of the provisions of the Bill on island communities.

This document records the decision not to undertake an ICIA in respect of the Community Wealth Building (Scotland) Bill. It also summarises the information and evidence that has been considered, along with the rationale for this decision.

Information about the background, consultation and the policy intention behind the Bill is set out in the Policy Memorandum that accompanies the Bill. Estimated costs are set out in the Bill's Financial Memorandum. The Bill and accompanying documents are available from the Scottish Parliament website.

2. Policy aims and objectives

Community Wealth Building (CWB) is an economic development policy and model designed to tackle long-standing economic challenges and transform local and regional economies. If implemented successfully, CWB has the potential to act as a preventative measure – reducing public service demand by tackling inequality and ensuring wealth is retained in local and regional economies in a just and fair way.

CWB acts as a cohesive strategic framework to build on some of the progressive policy actions already underway in Scotland, including in Fair Work, Sustainable Procurement, Community Empowerment and asset transfer. By bringing these approaches into a unified whole, CWB can amplify impact and create a lasting transformation in how Scotland’s economy operates, ensuring the benefits are realised across our local areas and regions, and by future generations.

CWB is focused on growing the benefit households and communities derive from economic development and growth, and encourages actions across five interconnected pillars (Land and Property; Finance; Workforce; Inclusive Ownership and Spending) to tackle structural inequalities, support business growth, create and retain employment opportunities and give people a greater stake in the economy. These five pillars all play a complementary role in the generation, circulation and retention of wealth in local and regional economies.

3. Who will be affected by the Bill

The CWB Bill will seek to ensure consistent implementation of the CWB model of economic development across Scotland and address economic and wealth inequality between individuals and communities by facilitating and supporting the generation, circulation, and retention of more wealth in local and regional economies. The strategic planning and reporting duties included in this Bill seek to ensure universal implementation of this economic development approach in and across Scotland whilst allowing for local, regional, and organisational flexibility in line with the Place Principle.^[1]

Public Sector Anchor Organisations

Delivering CWB provides a cohesive framework to the economic development landscape by ensuring programmes and investment work together, with CWB actions developed based on the opportunities and needs of particular communities. The CWB Bill will enable and support public sector anchor organisations^[2] to work with communities to create meaningful action that is relevant to specific localities and their unique experiences be they urban and rural or island communities.

The Scottish Ministers

As part of the provisions of the Bill, the Scottish Ministers will be required to lay in Parliament a CWB statement, which will set out measures that the Scottish Ministers are taking or intend to take to:

• reduce economic and wealth inequality between individuals and communities in and across Scotland, and
• support economic growth in and across Scotland,

by facilitating and supporting the generation, circulation and retention of wealth in local and regional economies.

The Scottish Ministers will also be required to issue guidance to assist the CWB partnerships to produce CWB action plans and to assist the specified public bodies in embedding CWB principles when developing their corporate plans and associated strategies.

Local Authorities and Relevant public Bodies

Local authorities and relevant public bodies as listed in the Bill, including Territorial Health Boards, Regional Colleges, Scottish Enterprise, South of Scotland Enterprise, Highlands and Islands Enterprise, Skills Development Scotland, and Regional Transport Partnerships, will form CWB partnerships. These CWB partnerships will be required to jointly prepare and implement a CWB action plan to outline the measures they plan to take to facilitate and support the generation, circulation and retention of wealth in their local economy.

Local authorities and the relevant public bodies will be required to have due regard to guidance produced by the Scottish Ministers while developing their CWB action plan.

Specified Public Bodies

Specified public bodies will be required to have due regard to CWB guidance produced by the Scottish Ministers when developing their corporate plan and associated delivery strategies.^[3]

4. Consultation and engagement

On 31 January 2023, the Scottish Government published a consultation on CWB.^[4] Views and comments were sought on what future CWB legislation should look like and where existing law and policy could be changed to advance action on CWB. The consultation sought views on the following areas:

1. A proposal for a duty to advance CWB and provided respondents with options as well as inviting views on which bodies should be covered, accountability and involvement of stakeholders;
2. The provision of statutory or non-statutory guidance;
3. If non-legislative measures are required to advance CWB;
4. If specific actions are required to advance the items contained within the Shared Policy Programme in relation to CWB;
5. If changes to the law are required to advance the pillars of CWB (spending, workforce, land and property, inclusive ownership and finance).

The consultation received 185 responses, of which 148 were from groups or organisations and 37 from individual members of the public. In addition, a public webinar was attended by more than 150 people.^[5] An independent consultation analysis report of the CWB consultation was published in October 2023.^[6]

As part of the consultation, the Poverty Alliance were commissioned to recruit, support and facilitate a citizen’s panel of people with experience of poverty to share their views on CWB, and their priorities for action.^[7] The resulting report recognised the importance of community engagement and flexibility in implementation at a local levels to ensure local priorities and opportunities can be realised.

The CWB Bill Steering Group has provided oversight as legislative proposals have been developed. The Group is chaired by the Minister for Employment and Investment and brings together representatives from CWB pilot areas as well as key stakeholders across the public, private and third sectors.

5. Data and Evidence

In addition to the insights gathered during the consultation, two main sources of data and evidence have been considered in this assessment. Firstly, data gathered from the Scottish Government’s CWB pilot project in the Western Isles, and secondly published research relating to the impact of CWB in island and rural contexts.

CWB Pilot Project – Western Isles

The Scottish Government has been working with local authorities and other partners to build capacity to help drive forward the implementation of CWB at the local and regional level, supporting five CWB pilot areas including the Western Isles. As an acknowledgement of the community-led wealth building work that occurs in the Western Isles, CWB responsibilities at the council were directly incorporated into community engagement work. This pilot identified strengths in island economies, including a strong history of community ownership, social enterprise and community-led local development. Notable in the findings was the benefit of having CWB principles embedded into the council’s ways of working. Likewise, the benefits of the council’s approach to retaining money within the island’s communities through place-based investment was highlighted.

Community Wealth Building: Case Studies of Scotland Pilots Report

Using case studies from the local authority CWB pilot areas, a recent report from Scotland’s Rural College (SRUC) has assessed the development and implementation of CWB policy in Scotland.^[8] Some of the piloting organisations, including the Western Isles, South of Scotland and Fife, contained significant rural areas of varying kinds (islands, sparsely populated rural areas, accessible rural areas, etc), and the report suggested that Scotland’s approach to CWB is strongly influenced by its rural geography and expertise in community-led rural development. Certain common factors that have allowed CWB to embed into local economic development approaches were recognised, including supportive leadership and organisational culture, collaboration with key partners, and accountability for delivery through local governance structures. In particular, the findings of the report suggest that effective alignment between policy at national and regional levels and community expertise on CWB could result in significant successes and fundamental changes in local economic systems.

Community Wealth Building: Approaches relevant to rural and island communities Report

This SRUC report considered how CWB can be applied in a rural and island context.^[9] The report suggest a set of possible learning points in relation to each of the five principles:

• Progressive procurement: Considering the introduction of a geographical element to procurement to ensure processes are applicable to rural and island locations and businesses.
• Fair employment and just labour markets: Ensuring employability support schemes and fair work practices can be delivered in rural/island communities and with rural/island businesses to the same standard as in urban areas, and considering the rural/island potential for employment and enterprise hubs.
• Shared ownership of the local economy: Recognising the large number of social enterprises in rural/island locations and the potential for stronger links with anchor institutions.
• Socially just use of land and property: Reviewing the potential for more partnership working around the management of land and natural capital and better alignment with CWB principles, and considering the role of community land trusts as anchor organisations.
• Making financial power work for local places: Linking community ownership models, community benefit funds, etc. more strongly with the principles for harnessing and recirculating wealth in local communities and providing ongoing support.

Rural and Islands Report: 2023

SRUC’s Rural and Island’s Report 2023 notes that Scotland’s rural and island economies and communities are incredibly diverse, and that issues faced in one locality are not always the same in the next.^[10] Whilst not universal, on average it was found that very remote mainland areas, as well as islands, are faced with some of the most significant demographic challenges, including slow population growth; ageing populations; fewer young children that lead to a long-term shrinking of the economic base; high levels of vacant and second home ownership; affordable housing concerns from locals; and higher fuel prices.

Community Wealth Building in Rural and Island Scotland Report from Practitioner Roundtable

Organised by Scottish Rural Action, InspirAlba and the David Hume Institute, a roundtable brought together experienced CWB practitioners to discuss rural and island CWB strategies and to explore how wealth building policy may be leveraged to strengthen these strategies. The report indicates that in rural and island places community wealth is generated through connections within dense local networks of people and micro-organisations.^[11] In this context, the report notes the particular importance of implementing CWB actions that will strengthen community resilience.

6. Assessment

The form of the provisions included in the CWB Bill were informed by the analysis of a range of evidence and stakeholder feedback, including through the analysis of responses to the public consultation run by the Scottish Government on a proposed CWB Bill. Flexibility in the implementation of the strategic planning and reporting duties contained in the Bill will ensure that local, regional and organisational priorities can be reflected.

Impact of Duty on the Scottish Ministers

The Scottish Ministers will have a duty to publish and lay in Parliament a CWB statement, which will set out measures that the Scottish Ministers are taking or intend to take to reduce economic and wealth inequality and support economic growth. The Scottish Ministers will be required to publish a draft CWB statement and consult with such persons as they consider to be directly affected by the measures it contains.

Consultation during the development of the CWB statement will ensure that persons with an interest, including island communities, can share their experiences, knowledge or ideas to help inform the content of that statement.

The CWB statement will demonstrate the Scottish Ministers’ long-term commitment to CWB while encouraging consistent application of the approach in local and regional economies across Scotland. This strategic statement will account for local, regional, and organisational flexibility in line with the Place Principle, so it has been determined that there will have no differential impact on island communities.

Impact of Duty on Local Authorities and Relevant public Bodies

CWB partnerships will be required to jointly prepare and implement a CWB action plan to outline the measures they plan to take to support the retention of wealth in the local or regional economy. CWB partnerships will be encouraged to consider actions across five interconnected pillars to tackle structural inequalities, support business growth, create and retain employment opportunities and give people a greater stake in the economy.

When developing their action plans, CWB partnerships will be required to have due regard to guidance produced by the Scottish Ministers. This guidance will encourage CWB partnerships to take a place-based approach and empower them to develop actions that will best support the needs of individual communities. Local authorities will also be required to consult with persons directly affected by the CWB action plan.

Through guidance, CWB partnerships will be encouraged to engage with communities in the localities covered by their CWB action plans during the development process. The flexibility in implementation of the action plans will ensure that actions can be tailored to their specific localities and unique experiences, including for island communities.

It has been determined that, due to local flexibility in implementation, these duties will have no differential impact on island communities.

Impact of Duty on Specified Public Bodies

Specified public bodies will be required to have due regard to CWB guidance produced by the Scottish Ministers. This guidance will assist specified public bodies to embed CWB principles during the development of their corporate plans and associated strategies. Where relevant, the guidance will encourage specified public bodies to take a place-based approach to the implementation of their duty.

It has been determined that, due to local flexibility in implementation, these duties will have no differential impact on island communities.

7. Is a full Islands Communities Impact Assessment required?

This ICIA assesses only the impact of the provisions included within the Bill and not the policy evolution and development which it enables.

Based on the evidence set out above, it has been determined that this Bill is not likely to have an effect on an island community which is significantly different from its effect on other communities (including other island communities).

Where necessary, further ICIAs will considered during the implementation of the duties included this Bill.

Authorised by:

Anne-Marie Martin

Deputy Director, Regional Economic Development

06 March 2025