Landmark Scottish bill seeks to shift economic power toward communities

Scotland has taken a new approach to economic policy after its parliament passed the Community Wealth Building (CWB) Bill in February, a landmark piece of legislation designed to promote broader ownership of assets, collective decision-making and a redistribution of economic power.

The legislation comes as countries around the world face mounting economic and environmental pressures. Rising living costs, persistent child poverty, climate-driven displacement and increasingly concentrated land ownership have exposed the limitations of the current economic model, which has long relied on fossil-fuel-driven growth and the idea that wealth will eventually trickle down, as highlighted in an article published by Project Syndicate.

Against that backdrop, Scotland has opted to experiment with a different framework intended to reshape how wealth is created and distributed within communities.

For decades, economic performance has largely been assessed using traditional indicators such as GDP growth, corporate profitability and the ability to attract foreign investment. Critics argue that such metrics fail to reflect broader measures of well-being, including the health of communities, quality of life and environmental sustainability.

The Community Wealth Building framework seeks to broaden those measurements. Rather than focusing solely on economic expansion, it aims to evaluate success based on whether communities and local economies are genuinely thriving.

The approach encourages communities to rethink how their local economies operate, with the goal of increasing the circulation and local ownership of wealth.

At its core, the model challenges traditional top-down economic systems in which wealth generated in local areas often flows outward to distant shareholders. Instead, the CWB framework prioritises keeping economic resources within communities, supporting locally rooted businesses and generating employment opportunities close to where people live.

The new legislation encourages local councils and public bodies to collaborate with residents and community organisations to help generate, circulate and retain prosperity within their regions.

A key component of the strategy involves large organisations—often referred to as “anchor institutions”—including public bodies, private firms and third-sector groups. Working together, these institutions can leverage their combined purchasing power, employment practices and investment decisions to identify how wealth currently leaks out of local economies and explore ways to redirect it back into communities.

Although the concept of community wealth building has existed in economic theory for some time, Scotland’s legislation represents the world’s first attempt to formally implement the model at a national policy level.

Traditionally, the approach is built around five main pillars. These include procurement spending by anchor institutions, improving access to fair local employment and skills development, better use of land and property assets for social and economic benefit, expanding inclusive ownership through locally based enterprises, and ensuring that financial investments remain within local economies.

Under the framework, procurement policies are not only about prioritising local spending but also about designing decision-making processes that help public authorities determine whether outsourcing or internal provision best serves the public interest.

While supporting local businesses is a central element of the approach, proponents say strengthening the public sector and delivering essential services with a clear public-value focus is equally important.

By Nazrin Sadigova