The next item of business is a debate on motion S6M-19802, in the name of Ivan McKee, on the Community Wealth Building (Scotland) Bill. I invite members who wish to take part in the debate to press their request-to-speak buttons.
15:00
I begin by thanking the Economy and Fair Work Committee for its constructive stage 1 report on the Community Wealth Building (Scotland) Bill. I welcome the support that the committee expressed for the general principles of the bill and the observation that it has the potential to play
“a vital role in improving the lives of the people across Scotland.”
The bill’s central aim is to create a new and consistent platform for local economic development in Scotland—a new format that recognises the economic agency of every pound of public money, alongside the necessity for the public sector to partner with businesses and communities in pursuit of sustainable economic growth.
When I assumed responsibility for the bill, I was keen to ensure that this legislation, which aims to add value to economic policy objectives, also works as a public service reform measure. I pay tribute to Tom Arthur for the work that he has done previously on the bill and for his commitment to the principles of community wealth building.
Any Government must be thoughtful when it seeks to make changes to the public sector partnership landscape through legislation. However, community wealth building’s focus on growing all forms of local businesses, creating and protecting jobs, extending greater ownership and influence to communities, and looking to attract more investment into our local economies can improve the outcomes that we achieve from economic development activity.
The bill obliges future Scottish Governments to publish a community wealth building statement. The statement will set out the measures and actions that will be taken to advance community wealth building in Scotland across the pillars of the economic development model: spending and procurement; fair work and employment; assets, land and property; and new business growth and investment.
The minister mentioned procurement, so I wonder whether he agrees with the comments from the Federation of Small Businesses that, for the bill to be effective, targets should be included in the community wealth building plans for each public body and local authority, and that there should be targets for the amount of public spend in local economies.
I can give you the time back for that, Mr McKee.
That is a very fair question. Mr Fraser will know that I have had extensive engagement with the FSB on this issue. I have met its representatives face to face to talk through its proposals on the more general issue of procurement, which it is very interested in, and on thresholds. We are taking forward that work through a separate consultation, which has been launched.
On targets, our perspective as a Government is that those targets are best set locally, not least because each local area will have a different dynamic around what it wants to include, largely due to the size of the local area. Smaller local authority areas will have less scope for procuring in that local authority area than others will. We think that the targets are best set centrally, but the guidance that we will bring forward will indicate that local authorities and community wealth building partnerships should seek to include those local targets as appropriate.
I respect what Mr McKee is saying about setting those targets locally but, in his discussions with local authorities, is he also prepared to press them to disaggregate the data that they collect in order to show data about women-led businesses? That is an area of oversight, and we are still struggling to get data about the amount of capital that goes to women-led businesses.
Ms Thomson raises a valuable point. AccelerateHER has been at the Parliament this week, highlighting the challenges that women-owned businesses face in securing funding. We will set out the guidelines for the data that local authorities should collect, and that will be a consideration as we work through the process.
After the Government’s first statement on community wealth building, an updated statement would be required within the subsequent five-year period, with a progress report published after each five-year period. The statement and statutory guidance will assist local authority-led partnerships to produce their own community wealth building action plans. Should the bill pass, those plans must be produced within three years and they would be reviewed every five years.
The bill has been informed by the desire to enable democratically elected local government to lead a process of active reform and improvement without creating an attendant complex bureaucracy. Local authorities would sit at the centre of a core partnership of relevant public sector anchor bodies. They would be partnered by our enterprise agencies, health boards, colleges and regional transport partnerships—in other words, the relevant bodies that are identified in the bill.
Among the many important recommendations in the committee’s stage 1 report was the call for clear guidance to help community wealth building partnerships to develop plans and implement actions in concert. I have replied to the convener of the Economy and Fair Work Committee with a detailed response to its report.
Community Land Scotland has suggested that we think about including the Scottish National Investment Bank, national park authorities, Forestry and Land Scotland and Crown Estate Scotland, given their influence and ownership of landholdings. Would the minister look at that to enable new opportunities for community wealth building and ownership?
It is important to recognise that all those bodies are already involved in the process as specified public bodies. It is important that we get the right and proportionate approach so that the plans can be pulled together effectively in a way that has the most impact. All those bodies are already included as specified public bodies, which is a proportionate way to proceed. Community wealth building will absolutely be part of the work that those bodies will be required to do and they will have input into the process, but it is important to recognise which bodies will be most central so that we can make the most effective impact.
In my response to the committee, I set out plans to conduct an inclusive and collaborative development process for the guidance. I aim to start that discussion as soon as possible so that there will be clear guidance that will be informed by successful practice, noting that too high a level of prescription is not desirable in practice. The majority of our local authorities are already pursuing community wealth building policy and objectives, and I am confident that the approach, which is built on collaboration and empowerment, has the best chance of success.
To reflect the fact that some local authorities will want to work together, the bill makes provision for neighbouring councils to work on a regional basis. That will provide local flexibility for community wealth building partnerships. Whatever the pattern of uptake in that context, all community wealth building partnerships would be expected to set plans that are complementary to their existing objectives to revive local economies and empower local communities.
I want to touch briefly on some points that were raised in the committee’s report. First, I recognise that community wealth building is a place-focused economic development model spanning a number of relevant policy areas. The bill’s aim is to create a foundation for a consistent and progressive approach to local and regional economic development. As it beds in, it will become a new and vital place for dialogue about any changes that are required in law across a wide range of policy areas.
The second crucial aspect is the involvement and empowerment of communities. It is important that community wealth building is a signal that our communities must be connected to activities involving councils and others, with support to lead economic activity.
The third point relates to finance. The financial memorandum accompanying the bill was informed by real cost information that was gleaned from local authorities and other public bodies. The figures highlight the costs of administration. It is right that those estimates are scrutinised, but they set out a realistic picture of the cost of implementation. I know that some stakeholders raised the issue of wider implementation costs. Although that is a valid point in the broader context given the wide scope of community wealth building, that involves consideration of the deployment of funds across a range of contributory policy areas, which will be determined with regard to specific future policy interventions.
The next Scottish Government and subsequent Administrations will be tasked with considering how all relevant Government activities contribute to community wealth building, whether directly in areas such as procurement or fair work and skills, or in a wider range of policy areas in which public investment or regulation might flex and change to assist our economy to grow in a way that is successful, sustainable and fair. I look forward to working with the committee and members on the next legislative stage, and I invite members to work with me on that.
I move,
That the Parliament agrees to the general principles of the Community Wealth Building (Scotland) Bill.
I remind members who wish to participate in the debate to make sure that they press their request-to-speak buttons.
I call Daniel Johnson to speak on behalf of the Economy and Fair Work Committee.
15:10
I am delighted to speak on behalf of the Economy and Fair Work Committee in the stage 1 debate on the Community Wealth Building (Scotland) Bill. I apologise for not being in Parliament in person. I acknowledge the receipt of the letter from the minister, which he mentioned and which we received this afternoon.
I thank everyone who responded to our call for views and the witnesses who gave evidence during our stage 1 scrutiny. I extend my thanks to those who enabled our visits to Alloa and Irvine, which provided invaluable local and practical insights. I also acknowledge the previous work by the Local Government, Housing and Planning Committee, on whose work we also relied.
Community wealth building is a proven economic development tool that aims to retain wealth within local communities, to foster engagement and cohesion and, ultimately, to enrich the lives of residents. As the committee heard, many local authorities across Scotland have already begun implementing community wealth building measures, either on their own account or as part of the Scottish Government’s pilot. The bill seeks to formalise the approach to ensure the adoption of community wealth building as a model of economic development across the country.
As members will have seen from our report, the Economy and Fair Work Committee is supportive of that general aim. However, the committee heard from some who felt that legislation might not be necessary to achieve the aims that are stated in the bill and that alternative measures, such as ministerial guidance or direction, could be used to achieve the same aims. Some also felt that new powers and additional metrics could be added to the bill to strengthen its aims. The committee heard from some, including Neil McInroy, the chair of the Economic Development Association Scotland, that a legislative approach such as the one used in the bill contains a clear “obligation to act” and ensures involvement from across the public sector, and therefore is of benefit.
Generally, the committee supports the measures in the bill, but we believe that in some areas they could be strengthened and extended. The publication of a community wealth building statement and the establishment of partnerships by the Scottish Government are welcome steps, but they are only part of the solution. Throughout our evidence gathering, the importance of there being clear, detailed and practical guidance under section 9 of the bill was repeatedly emphasised. To ensure consistent adoption of guidance, it must help local authorities and partnerships to understand the objectives and the means of achieving them.
Crucially, the guidance must address capacity challenges in local authorities, partner organisations and community groups. As Matt Pearce from Development Trusts Association Scotland warned, without that support, community wealth building risks becoming a burdensome and disengaging process. Accordingly, the guidance must set out clear expectations—particularly around governance, co-ordination, monitoring and evaluation mechanisms—that encompass the public, private and third sector and, most importantly, local communities.
To realise the full potential of community wealth building action plans, it is essential that local authorities and their partners are properly resourced to do so. Many witnesses expressed concern about the capacity of organisations that are already under great financial pressure to engage in the development and delivery of those plans. The City of Edinburgh Council told us that the financial memorandum presents “an incomplete picture” of the resources required. The Convention of Scottish Local Authorities echoed that concern, warning that, without proper funding, action plans risk becoming “a tick box exercise”.
The bill has triggered a financial resolution acknowledging the significant expenditure involved. We also note the minister’s suggestion that some resources could be drawn from existing budgets. However, the committee remains concerned that, without additional support and consideration of the total additional effort that the legislation may require, inconsistent or limited delivery may result.
Although community lies at the heart of the concept of community wealth building, the bill makes no reference to the community groups, third sector groups or private sector representatives in the partnerships. That omission was highlighted by many witnesses and respondents to our call for views. Witnesses, including the Scottish Community Alliance, called for the bill to formally recognise third sector and community groups as being essential to delivery.
The committee also received evidence regarding the need for mechanisms that enable direct citizen involvement in the development of community wealth building plans and approaches. The committee therefore recommends that guidance produced under the bill should set out a clear expectation for local authorities and partnerships to engage with the third sector, and I urge the Government to undertake further work on developing practical approaches for citizen engagement.
I also note that the committee raised a question about the rationale for the selection of the specified bodies that are required to be consulted. In our report, we highlight suggestions from witnesses and stakeholders for additional bodies that could usefully be included in the list.
The bill does not specify how the impact of community wealth building action plans will be measured, leaving that to local authorities and their partners, as noted in the intervention taken by the minister. Witnesses emphasised the need for consistent, high-quality data, warning that without it, progress cannot be accurately assessed. I emphasise that that is not simply about the targets; it is about having consistent metrics, with the targets being set by the partnerships. Having consistent metrics will allow comparison across community wealth building plans.
The FSB highlighted the importance of standardised reporting and, as has been noted, that measuring the value created for local small and medium-sized enterprises is critical to understanding how well community wealth building is being delivered. To support consistency in the sharing of best practice, the committee recommends a set of core common metrics to be agreed with the Convention of Scottish Local Authorities, and that those should sit alongside area-specific goals, allowing flexibility while enabling meaningful comparison.
In addition to our recommendations for improving the bill, the committee heard that complementary reforms in other policy areas are essential to maximise the impact of the legislation. Stakeholders consistently highlighted that procurement reform is key to enabling community wealth building. Proposals included lowering the threshold for mandatory consideration of community benefits; raising the threshold for regulated procurement and allowing direct awards to local suppliers where community benefits are evident; prioritising social value in procurement scoring; and standardising procurement reporting, particularly in relation to SMEs.
There were also calls to expand the definition of supported businesses to allow public bodies to restrict tenders by geography or company size; to streamline the asset transfer process and review the Community Empowerment (Scotland) Act 2015; and to strengthen powers of compulsory purchase and examine the possibility of the introduction of compulsory sale orders.
With the right support and complementary reforms, the bill has the potential to significantly improve the lives of people and communities across Scotland. The Economy and Fair Work Committee supports the general principles of the bill and looks forward to receiving further detail from the Scottish Government ahead of stages 2 and 3, should the Parliament approve the principles of the bill at decision time.
15:17
I start by echoing the thanks of the committee convener to all those who gave evidence to the committee in relation to our stage 1 scrutiny. I also thank our clerking team, the Scottish Parliament information centre and my fellow committee members, who worked on a mostly consensual basis in agreeing a unanimous report, which I commend to the chamber.
The first question that we have to address when looking at the bill is what community wealth building is. It is one of those terms, a bit like “wellbeing economy”, that is bandied around a lot but not easily understood. The committee’s report attempts to answer that question. Community wealth building seeks to utilise the economic impact of anchor organisations, which can be public, private or third sector, to stimulate and retain economic activity in a local area.
As the minister outlined, there are five pillars to community wealth building. They are spending, which involves maximising the benefits of public procurement; workforce, which involves increasing fair work and skills development opportunities; land and property, which involves ensuring that land and property are used to benefit communities, SMEs and the environment; inclusive ownership; and finance. For example, community wealth building is about better using the vast sums that are spent by public bodies to support more local businesses, employ local people and ensure that derelict properties are brought back into productive use.
With that definition, I think that we can all conclude that community wealth building is a good thing, regardless of our different political perspectives. Indeed, good work on developing community wealth building in different parts of Scotland by local authorities and others is already going on, as the committee heard in its evidence.
That takes us to the second question: what is the point of the bill, and what will it achieve? On one level, the answer to that question has to be: not a great deal. Essentially, the bill will require Scottish ministers to prepare a national statement setting out the actions that it will take to reduce economic inequality and to support economic growth by ensuring that wealth is generated and retained in local and regional areas. It will also require public bodies, including local authorities, to produce and implement community wealth-building plans.
That is fine, but it is already obvious that the bill might deliver very little in terms of practical outcomes. As the committee noted, the bill’s aims
“could potentially be delivered through non-legislative means”
without the necessity for a bill at all, because much of what it aims to do is already in the power of the Scottish Government. Moreover, the relevant public bodies that are listed in the bill are relatively few. Key public bodies are not on the list. That includes, for example, large landowners such as Forestry and Land Scotland, Crown Estate Scotland, ferry operators, Marine Scotland, ScotRail and the Scottish National Investment Bank.
The Scottish Conservatives will support the bill at stage 1, because it is a useful step in the right direction. However, our concern is that, without more concrete provisions, we are unlikely to see much progress being made. I will give some examples of how the bill might be improved. The Federation of Small Businesses has stated that, although it is supportive of community wealth building as a concept, the bill should include
“statutory targets for procurement spending with local and small firms and standardised rules for reporting on that spend.”
The FSB’s head of policy and external affairs warns:
“Without clear benchmarks and transparency, there’s a real risk the Bill won’t deliver the change towns, villages and local businesses expect.”
I addressed the point regarding specific targets in my opening remarks, but I would be interested to hear how Murdo Fraser envisages that such targets would operate and how he would set those targets, given the significant variation in economic base, size and scale across Scotland’s 32 local authorities.
We can explore that as the bill progresses. I will say very clearly that I am not proposing a top-down approach to the setting of targets, because I entirely understand the minister’s point that they need to be set at a local level and, crucially, in consultation with stakeholders, including the business community. It is important that the local plans, when drawn up, include targets so that some ambition is baked into them.
According to the FSB’s research,
“Nearly three quarters of small businesses who bid for public contracts find the process ‘complex and challenging’”.
That needs to change if we want to see the benefits of public sector spend supporting local businesses.
Another point that was made in evidence to the committee was that community voices have to be engaged when local action plans are being devised. We need to see communities—that includes the local business community—being consulted and engaged. It is also important that unrepresentative bodies and voices are not allowed to dominate discussions.
There is also the question of resources. Some witnesses told the committee that they have issues with the lack of estimates for the implementation costs of the action plans. There will be a resourcing issue for local authorities and other public bodies in drawing up those action plans, and those resources could be spent on delivery of measures, rather than bureaucracy. The minister, in giving evidence to the committee, acknowledged that the financial memorandum does not include the cost of implementation of those action plans. It is unclear at present what that cost would be or where those resources would come from. Without resources in place, the requirement to implement action plans might not be deliverable.
The bill will achieve very little in itself. It will require resources to produce and deliver action plans, and unless we see implementation of those plans, it will make very little difference. If we want to see proper community wealth building, the bill is only a first step. Much more needs to be done if the promised benefits are to be delivered.
15:24
I remind members of my voluntary entry in the register of members’ interests.
What the Community Wealth Building (Scotland) Bill could be about is direct action; new statutory powers—not just words but deeds. It could rekindle the radical tradition that dates all the way back to Robert Owen and the Fenwick weavers. It could put forward a vision of hope: Scotland as a centre for co-operative development—a Mondragón of the north; a new era of economic democracy. It could be providing the leadership for a genuinely democratic green industrial revolution; one that is not wholly dependent, as this Government would have it, on foreign direct investment—our energy resources and our new industries once again colonised by private interest, which is a policy courted, incentivised and boasted of by the Scottish National Party, with the result that Scotland is turning more and more into a branch economy.
This bill could properly resource, revamp and place on a statutory footing Co-operative Development Scotland, arming it with the instruments of investment that it demands and the technical assistance and expertise that it needs, and giving it new legal powers to intervene in the economy through an industrial reform and common ownership act—a Marcora law for Scotland—to give workers a new legal right to buy an enterprise when it is put up for sale or even facing closure. The bill could give workers the power to appoint a financing member to assist in such a buy-out, and it could have the power to place a duty on employers to advance contractual redundancy entitlements to co-invest and help to self-fund that buy-out, underpinned by tax incentives like non-domestic rates relief or, where there is a co-operative conversion, exemption from land and buildings transaction tax, and through progressive procurement policies, like reserved contract status for co-operative, inclusive and democratic business models. That could be done by amending section 11 of the Procurement Reform (Scotland) Act 2014 and regulation 21 of the Public Contracts (Scotland) Regulations 2015.
At the same time, the bill could usher in an action plan to start insourcing services that the Scottish Government currently outsources, like the much-criticised prisoner escort service, and the insourcing of all that public money wasted on management consultants, by simply drawing instead on the expertise of the workers who are delivering the services. I have often thought that, if the Government had listened to the workforce at Ferguson Marine instead of hiring highly paid turnaround directors, rear admirals and naval commodores, and international management consultants, the ferries would have been in the service of our island communities years ago.
We should stop seeing trade unions simply as a last line of defence for working people. They should be seen as an alternative line of advance for working people, through which workers can participate in the running of our public services like water, like the railways, like the national health service and like local government services.
In his speech, will Richard Leonard have a kind word to say about small and medium-sized businesses and the opportunities that they currently feel denied of when it comes to public sector procurement?
I have got five minutes, so I will devote my speech to what I think is important, and Stephen Kerr can devote his speech to what he thinks is important.
The Community Wealth Building (Scotland) Bill could be about democratising organisations like Scottish Water so that we avoid a repeat of the industrial relations debacle that we have witnessed in recent years, where excessive executive bonuses signed off by ministers are the norm while workers’ wages are constrained.
If this bill is to become serious about building a strong and resilient economy, it must become far more radical and far more progressive. We should be asking questions such as: why on earth should those who create the wealth not own the wealth that they create? Why should we not have a system of economic governance based on one member, one vote, instead of one share, one vote? Why should we not foster an economy where labour hires capital instead of capital hiring labour? Where is the courage? Where is the conviction? Where is the vision in this bill?
Shifting the balance of power in Scotland should not simply be a piecemeal and an occasional part of what this Parliament is about. It ought to be its very essence. Instead, what this bill offers is an instruction to others—to local government, to regional transport partnerships, to health boards, to colleges, to enterprise agencies—to come up with action plans while the Government simply has to issue a statement every five years. Instead of closed horizons like this, we should be opening them up.
So, Labour will support the principles of the bill tonight, but we will be pursuing radical, progressive, socialistic amendments.
15:30
It is fair to say that at the Economy and Fair Work Committee session where this bill was presented to us, the response from the committee was pretty nonplussed. The bill does not actually have in it any of the significant changes in powers that can only be provided by legislation: improvements to the compulsory sales order system, a compulsory purchase order system, changes to powers of local authorities so that they can legally procure locally what they need. Those things all still need doing and I am disappointed that the Scottish Government did not take this opportunity to do them.
However, we are debating the bill in front of us, rather than the bill that we wish we had. In its present draft, the bill sets out an intention in legislation—it is not totally clear that what is in it could not be done without legislation, but it is, at least, an alignment of policy intention in the right direction, even if it is not yet much of a step forward.
I am somewhat concerned that there is not a wide understanding in the Government and the public sector of what community wealth building is. When Adrian Gillespie, chief executive officer of Scottish Enterprise, was at the committee in September, I asked him what role Scottish Enterprise should have in community wealth building. His response was:
“The major contribution that we make to community wealth building is in creating and protecting high-value jobs”.—[Official Report, Economy and Fair Work Committee, 17 September 2025; c 4.]
That is an excellent goal and an important outcome, but it is absolutely not community wealth building if those high-value jobs are for companies that are owned by private interests, which own the assets and keep the profits. That is company owners and shareholders building wealth for themselves, which is fine—I do not have an issue with private profit, provided that it pays its taxes, does not pollute the environment and treats people fairly—but it is the exact opposite of community wealth building. In his defence, Adrian Gillespie went on to talk about fair work, community regeneration and place making, which are elements of community wealth building.
Handily, there is a good description of what community wealth building is on the first page of the bill:
“facilitating and supporting the generation, circulation and retention of wealth in local and regional economies.”
That means that assets are owned locally and by communities, and that the benefits, including profits, are retained locally and by the community. This bill needs to make sure that more money, including public money, can be and is spent locally. That means removing the legislative and other barriers that prevent local authorities from buying locally. Cheapest is not always best. Councils and public bodies need to be empowered to choose local businesses, co-operative businesses, social enterprises and small businesses when they buy goods and services.
The bill needs to ensure that public assets are optimised for public good. For example, local authorities must be supported to turn buildings and facilities that they do not need any more into places that support their community—whether by housing charities, social enterprises and small businesses or as community centres where people can meet, learn and connect—rather than selling or renting them to the highest bidder, or leaving them empty.
The bill needs to ensure that more assets are owned by communities and that the profits and benefits of those assets are kept locally—whether that involves a community-owned energy scheme, where the profits are spent on local infrastructure, or community woodlands that are maintained for the use and benefit of the people who live there.
The Scottish Greens support the principle of the bill but we would like to see a lot more in it.
15:33
So far, we have heard some very passionate—if a little predictable—speeches, with people nailing their political flags to the mast. You would think that there was an election around the corner.
One thing that there should be consensus on is that economic growth has to be the number 1 priority for the next Scottish Government, whoever it is and whatever it looks like. If that is not its ambition, Scotland will have a problem—indeed, this Parliament will have a problem. We have to drive up wages. We have to achieve maximum employment. We have to make Scotland an attractive place for people to come to, work in and live in—and, importantly, stay in if they are already here.
We have to give every young person across the country the opportunity to work and live in their own community, instead of having to leave their own town or even the country, because the buoyant economy that that will result in is what will give the next Government the money that it needs to fund good public services. Given what I have heard and what I have read in the stage 1 report, the bill has been left wanting, and I do not think that it will help us to meet any of those ambitions in any meaningful way.
I must also question why, with just four months left until dissolution, such a bill has reared its head at stage 1. Is there a need for the bill at all? What is in the bill that the Government cannot already do? That is entirely unclear to me from the evidence that the committee took.
As Richard Leonard rightly said, all that the Government will have to do is simply come to the Parliament once every five years and make a statement about what it thinks that other people have or have not done. Where is the duty on the Government to deliver community wealth building? There is no such duty in the bill.
Nonetheless, if such a statement must be made, here is what should be in it, but will not be—I have a list. There should be an update on new so-called anchor organisations. An assessment should be given of the impact of new and emerging technologies on our economy and our job market, including the challenges and opportunities that those technologies present to us as a country. The statement should also identify specific locations, towns, areas and regions, or even industries, that the Government believes will require additional support from its anchor organisations.
More importantly—I agree with Murdo Fraser on this—what is missing from the bill is statutory targets to ensure that it achieves any of its objectives. Without such targets, the bill will simply be lots of worthy words on paper that will result in absolutely no meaningful action.
I hope that amendments to address those omissions will be forthcoming. If others do not lodge them, I certainly will.
The bill must recognise the full potential of community wealth building. The work that was done in Preston, on which the committee took evidence, resulted in £200 million being invested back into the local economy. The area halved its unemployment rate and the local authority managed to remove itself from the list of the 20 per cent most deprived areas of the UK. I am not saying that community wealth building was the only factor at play in relation to that metric, but it unlocked something very important that we in this country have never been able to unlock—local public procurement. As a country, we have failed to do that for many years.
I am also concerned that, by putting all the onus on bodies such as local councils, which already face a £5 billion black hole in their finances by the end of this decade, the process for which the bill provides will simply become a tick-box exercise for councils, rather than allowing them to turn their attention to the real crisis that they face.
Will the member take an intervention?
I wish I had time. Unfortunately, I have 30 seconds left—unless I can get the time back.
I can give you the time back.
In that case, I will take an intervention from the minister.
My intervention relates to the point about our not delivering on procurement. Across the UK, the average percentage of procurement spend that goes to small and medium-sized enterprises is 20 per cent. What does the member think the percentage is in Scotland?
Are you answering a question or asking a question?
Asking.
My question to the Government is, what more is it doing to ensure that local procurement is easy? We have heard the evidence. Nobody in the chamber could think that it is easy for a small business to get a procurement contract with the NHS, Education Scotland or Transport Scotland. We all know small businesses in our local communities that are struggling to get public procurement spend. I hope that the answer to the minister’s question is way more than 20 per cent, but it should be nearer 70, 80 or 90 per cent. If it is up there, I will be really happy.
The answer is 47 per cent, which is actually higher than the percentage of the economy that small and medium-sized enterprises make up. They get more of their work, proportionally, from the public sector than bigger enterprises do—and more than they do from private sector contractors.
That is great, so let us do more of it. Let us make sure that more local businesses in our communities benefit from that. That is what community wealth building is; it involves building wealth in our local communities by ensuring that SMEs in our own back yards are able to compete, including by taking out some of the horrendous red tape that they have faced for too many years. We must do better, and I am glad that the minister agrees that we are on the right path.
I will conclude simply by saying that, like others, we will not stand in the way of the bill, but I do not want us to have a bill just for the sake of having a bill at the end of this process. It must be meaningful, and it must deliver its intended purpose of improving the wealth of communities across the country.
We move to the open debate.
15:39
I am enjoying the debate thus far.
Richard Leonard might have surprised Anas Sarwar and Keir Starmer with his socialistic approach, as it has been sadly lacking in the Labour Party of late.
This is more than just a piece of legislation. It is a commitment to transforming our local economies and creating a Scotland where economic success is genuinely shared by everyone in every place. Like other members who have contributed thus far, I think that we need to build on what is already there.
As Lorna Slater said, I would like to see us move forward on compulsory sale orders. We have already seen the changes to compulsory purchase orders that I put through, but there is still more to do. Beyond that, we must get procurement right. I note that Elena Whitham is sitting to the right of me, and that one of the companies that had benefited in her local area, Mossgiel Organic Farm, recently lost a contract, which is to the detriment of all. Those kinds of things must be resolved.
Community wealth building is fundamentally about making economies work for our people and our communities. It is about addressing economic and wealth inequality by actively supporting the generation, circulation and retention of wealth in our local and regional economies.
The principle behind community wealth building is sound. It is nothing more than increasing the velocity of money at the local level, and the concept of the velocity of money is brutally simple. The more hands that a pound spent by the Government or public sector passes through, the better. In the worst-case scenario, a pound that is spent at a large multinational company does not circulate in Scotland at all—it simply goes back to its headquarters in London. In the best-case scenario, however, that same pound spent at a local company can work its way through many Scottish hands. The local company pays its local suppliers, contractors and employees, and that money is spent again at other local companies, which in turn spend the money yet again with their local suppliers, contractors and employees, and so on.
That is vital, because when money flows into and is kept in an area, whether through good jobs, local business growth or profits being reinvested locally, new opportunities are created and more wealth is retained. That rewires the economy to deliver prosperity across economic, social and environmental dimensions. Key to making that work are anchor organisations and local businesses. Anchor organisations such as local authorities, the NHS, universities and enterprise agencies get the ball rolling by spending money in the local economy.
The next link is Scotland’s small businesses, which are the backbone of local economies. They can expand wealth to create local jobs, support community life and reinvest locally. However, that virtuous circle is currently struggling to work because almost three quarters of small businesses that bid for public contracts find the process complex and challenging.
Change is therefore needed, and the bill is a significant step towards ensuring the consistent implementation of the community wealth building model of economic development across Scotland. It will place duties on Scottish ministers and various public sector bodies to work collectively and to use the economic levers that are at their disposal to create meaningful local action. The bill will harness their impact by leveraging their spending power through procurement and their role as an employer to help to create jobs, reduce supply chains and strengthen local and regional economies.
However, it will be vital to keep local small businesses at the heart of the process, and we need to ensure that the vital economic leverage of our anchor organisations truly benefits the small and micro-enterprises that employ more than 900,000 people in Scotland.
I support the bill, and I will vote for it today.
15:44
I begin by joining colleagues and the committee in supporting the general principles of the bill. We all want the regeneration of our local economies to create new wealth and, crucially, keep it within the communities that we represent.
Over the years, we have seen legislation that aligns with the pillars of community wealth building, such as the Procurement Reform (Scotland) Act 2014, the more recent national planning framework 4 and the 2022 national strategy for economic transformation, which identified community wealth building as a key equality policy. There are concerns about individual measures, but it is important to recognise that the Scottish Government has shown a commitment to the underlying principle. That gives me hope that ministers will be open to strengthening the bill at stage 2 and beyond, to ensure that it delivers tangible economic benefit. It needs strengthening.
The committee made the point that both communities and councils must be empowered if the legislation is to succeed. Around two thirds of local authorities already have or are developing community wealth-building plans. That is encouraging, but councils are also being asked to deliver more with fewer and fewer resources. It is concerning that the financial memorandum reflects only the cost of developing plans, not implementing them. Without proper resourcing, the risk is obvious—the plans will become box-ticking exercises rather than engines of local economic change.
However, it is not only about new money. The bill also fails to make the best use of the money that we already spend, particularly the vast sums spent in public procurement. Imagine the impact if more of that spending was directed towards small and medium-sized enterprises and microbusinesses—both of which are the backbone of our local economies. That is why the Federation of Small Businesses has proposed setting local spending targets. Those proposals should be taken seriously.
Some people question putting targets in law, but without hard targets, change simply does not happen.
I want to explore where the member is on targets. Murdo Fraser asked for targets, and when I asked him where they should be set, he said that they should not be set top down. Jamie Greene called for statutory targets, which I presume means that they would be set top down. Where does the member think the targets should be set? If they are not top down, would they be statutory? If so, how would that work? What is the role of the Government in setting those targets?
To use a Scottish Government phrase, it has to be a process of co-design with our local authorities.
In all seriousness, I think that a top-down approach might be very difficult for our island communities—I am looking at the Deputy Presiding Officer, who hails from Orkney—to give one example.
However, with the bill there is an opportunity to deliver more for the SMEs and to develop sustainable local solutions that keep wealth circulating in communities. We could go further. Targeted support for materials could create ripple effects across multiple sectors. Take textiles, for example. Supporting farmers to grow native fibres, such as nettles, would in turn support rural manufacturers, retailers and service providers. I am afraid that I do not have the time to fully explain that point, but I want to be clear that, in the bill, we have an opportunity to build new wealth for our communities.
I hope that the Government will work constructively with members and outside stakeholders to strengthen the bill to ensure that that happens.
15:48
First, I thank Richard Leonard for mentioning the Fenwick Weavers Society, which, in 1761, established the world’s first co-op. The rest of his speech made me wonder whether I had wandered into the wrong debate, but I enjoyed it, nevertheless.
The Community Wealth Building (Scotland) Bill must be one of the shortest bills that I have seen during my time in Parliament—all in, the main content of the bill is only seven pages long, so it was a bit of a surprise that our Economy and Fair Work Committee managed to write 53 pages about it.
The aim of the bill is fairly straightforward: it requires all of our councils and relevant public bodies to prepare and publish a community wealth building action plan and to implement it. It is simple enough.
Some members of the committee asked why we need a bill to put something in place that some authorities are already implementing, and when great work is taking place not just in the pilot areas but in other areas. The short answer, though, is that it is to ensure that all councils do it, because we know that some do not. It also allows us to have a consistent approach to embedding the principles of community wealth building throughout Scotland.
Having been lucky enough—if that is the right phrase—to have lived through the past attempts at community wealth building in my council many years ago, the work that I see taking place now seems to be the right approach. I remember well huge community planning partnership meetings, packed with officials, stakeholders and councillors, and the poor community groups sitting by the side, waiting patiently for their turn to speak, hoping that some progress would be made for them. That approach did not work, in my view. It was too big and overarching, and it was not really localised. It was all driven from the top down—an approach that has been mentioned a few times this afternoon.
In contrast, what I see happening now works. In North Ayrshire and East Ayrshire, I have seen small local groups coming forward, and dedicated and talented officials who, instead of driving the process from the top down, work with local people to help them to progress their vision. That is absolutely the key to success. When that approach is in place, community groups see it working and more of them come forward to participate.
I have been fortunate to have visited communities with colleagues from the Local Government, Housing and Planning Committee and from the Economy and Fair Work Committee and seen for myself the work that is taking place. The Local Government, Housing and Planning Committee visited Millport, in Great Cumbrae, to see the amazing work there to restore the old town hall. I visited it again on its open day just a few weeks ago. We also saw some local projects that were under way to establish a small gin distillery in the town and a new camping business.
The convener of the Economy and Fair Work Committee mentioned Irvine. The committee heard from local people from the Ardrossan Community Development Trust, which was doing great work to regenerate the promenade, introducing things such as accessible deck chairs for the community and building inclusive play parks.
Just down the road in my area in East Ayrshire, a number of projects are under way that fit in with the community wealth building approach, backed up with £3 million-worth of investment to help the work along. One such example is the net zero accelerator project, which supports local businesses to cut their energy costs and reduce emissions. The project has been recognised nationally and has received an award at the Convention of Scottish Local Authorities excellence awards. To date, it has supported 50 businesses to reduce more than 14,000 tonnes of carbon dioxide, while creating more than 100 jobs and unlocking around £37 million in contract value for participating firms. It is a real green dividend that is paying off locally.
All those examples are working under the umbrella of community wealth building. They work because they are being driven by local people, ably supported by officials who care about and support their communities.
The bill really is as short as I said at the beginning of my speech, but sometimes the smallest things can make the biggest difference. I urge all colleagues in Parliament to get behind the bill at stage 1 and give all of our communities across Scotland a chance to participate in that exciting work.
15:53
I welcome the Scottish Government’s political support for community wealth building through the introduction of its bill. Community wealth building offers an economic approach that can help local economies to create well-paid, secure jobs, promote fair work principles and meet the needs of local communities.
I pay tribute to Councillor Joe Cullinane and the then Labour administration in North Ayrshire for their pioneering work on community wealth building. As the first council in Scotland to launch a community wealth building strategy, North Ayrshire rejected the failed economic model that has increased inequality, hoarded wealth in the hands of a few and hollowed out public services. Instead, the council’s strategy prioritised a different approach, which used its economic levers for the benefit of local people. Indeed, the council used its existing levers, such as procurement, local spend, and land and assets, to deliver on community wealth building. The council also brought together various local bodies, such as Ayrshire College and NHS Ayrshire and Arran, to help to make community wealth building a success.
It is clear that community wealth building has been a success in North Ayrshire. I could list many examples, but I will just give a few: 26 per cent of North Ayrshire Council’s total procurement spend now goes to local businesses; the council’s community benefits wish list has ensured that public sector contractors deliver on the needs of local communities, such as the transformation of a former army barracks into a thriving community centre in Barrmill; the skills for life vocational programme for parents delivered more than 130 placements with the council and 45 placements with wider public and third sector organisations between 2017 and 2022; a former steelworks site has been developed into the Lochshore park hub; the construction of three solar farms has been supported to meet local energy needs; and Kilwinning-based Shuttle Buses has been transitioned to employee ownership, empowering all 70 members of staff in the process.
North Ayrshire demonstrates that community wealth building can be successful, which is why it is important that we get the bill right. However, as it stands, the bill lacks ambition and scope. I agree with the points that Richard Leonard and Lorna Slater made. I also agree with the points made by members from various political parties—Kevin Stewart, Maurice Golden and Jamie Greene—about the need to seriously consider procurement and local spending.
The bill provides a framework that requires ministers to publish a statement, but there is no detail on what that statement should entail in resourcing and other support from the Scottish Government to make community wealth building a reality. Although the bill requires local authorities and relevant public bodies to publish their action plans, it contains no specific requirements for what should be included in those plans.
I reiterate the concern that, without proper resourcing and support from the Scottish Government, and with no clear action plan requirements, community wealth building will be implemented inconsistently across the country. The bill also fails to deliver further economic levers for local authorities to ensure ambitious and wide-reaching community wealth building approaches.
I hope that the minister will reflect on the issues that have been raised in the debate and that, at stage 2, we can be more ambitious with a clearer bill that can deliver community wealth building for communities throughout Scotland.
15:57
I, too, agree with the overall finding of the Economy and Fair Work Committee, which welcomes what the bill could do. However, that can be considered only a cautious welcome. Notwithstanding the reply from the minister a short while ago, there is considerable mileage between “could” and “will”, especially when one considers the finance pillar, so I will limit most of my comments to that.
It is worth quoting the wording on what the finance pillar concerns. It is about
“Ensuring that flows of investment and financial institutions work for local people, communities, and businesses.”
On rereading the stage 1 report and the minister’s reply today, I thought that perhaps not enough consideration had been given to financial institutions. Of course consideration has been given to the role of public sector bodies in directing funding, but the private sector—still a vital lifeline for access to finance—should also be considered. The traditional high street banks typically allocate a very small fraction of their lending to social enterprise, which means that they need to rely on specialist lenders or, more frequently, on their own retained earnings, grants and impact on investment. As the FSB noted, and as the minister knows, access to finance is still a critical issue, particularly for SMEs.
Much more thinking also needs to be done about how local authority pension schemes might be used. As the minister knows, there are specific considerations on that in Scotland. For example, there is no specific pooling policy, as there is in England and Wales. The Scottish Government’s local investment guidance indicates interest in scaling up local projects but, without statutory guidance, we will see no movement, especially when we consider risk-return criteria, which are vital for those pension schemes.
The use of credit unions for funding is still problematic and will continue to be, given their lack of experience and bandwidth. To be honest, I do not see that changing.
The committee’s report sought further guidance on the role of local authority pension schemes, credit unions, community bonds, such as the current pilot by South Lanarkshire Council to match citizens’ investments and guarantee projects, and on share issues. I would add to that employee buy-outs. It would be useful to hear further reflection on how the minister might approach all those matters in his closing remarks. In that regard, I noted Willie Coffey’s comments on what is happening in his area.
I sympathise a great deal with the comment from COSLA that we could run the risk of the bill becoming a “tick box exercise”. I echo the sentiment of members thus far that the bill has some way to go before it can have real impact.
COSLA also made an excellent point about the culture change that is required to fully embed community wealth building. A change in culture is very complex and difficult to achieve. To be honest, I do not see a recognition of that in any of the Government statements thus far. Culture change is a bold change.
Finally, I reiterate the need for disaggregated data collection for women-led businesses. I am disappointed that the Scottish Government is not doing more to mandate data collection in that regard. The minister noted that AccelerateHER, sponsored by me, is at in the Parliament this week. That organisation fundamentally aims to close the investment gap for women founders and help them to scale their businesses. However, if we do not collect the data, we cannot make a change. I urge the minister to consider that.
We now move to closing speeches. I call Lorna Slater to close on behalf of the Scottish Greens.
16:01
The bill needs to ensure that the people of Scotland have a genuine say in how their communities develop and how they face the future. What kind of town do they want to live in? What kind of spaces would they like to meet their neighbours in? What kind of, and how much, renewable energy infrastructure are they willing to host?
I am likely to lodge a number of amendments to the bill in the interest of trying to get it to take us further down the road towards genuine wealth building across Scotland, to ensure that more people have a share in Scotland’s economic success. It must be about more than good intentions; it needs to have measurable outcomes.
That brings me to my first question, which is about the excellent stated purpose of the bill, which is to
“reduce economic and wealth inequality between individuals and communities in and across Scotland”.
The stated purpose closes by saying that that is to be done,
“by facilitating and supporting the generation, circulation and retention of wealth in local and regional economies.”
However, in the middle, there is a phrase about supporting
“economic growth in and across Scotland”.
The usual measure of economic growth is gross domestic product, and every single witness at the EFW Committee said that GDP was not a good way to measure success in community wealth building. I ask the Scottish Government to reconsider the bill’s published intention and to make clear both the outcome that it is trying to achieve and how it will measure success and progress.
As others have suggested during the debate, there is a need to agree on data collection and standards, metrics and targets. We need to understand where we are and where we are going, and we will need to see how effective those action plans are. I suggest to the minister that the approach taken in the Circular Economy (Scotland) Act 2024 to co-design standards and targets might provide a process for him to follow.
I would like the bill to mandate the creation of targets; for example, to have a certain percentage of co-operative businesses in a region or for a certain percentage of local authority money to be spent on local procurement. It is very important that the development of community wealth action plans includes community trusts and existing democratic development organisations where they exist, because they are the ones that are already doing that work and have local knowledge and experience.
I would like to see energy issues being called out explicitly in the bill. The generation of affordable, renewable energy is something that everyone in Scotland should have a stake in and benefit from—certainly those whose communities host renewable infrastructure; they should absolutely get material benefit from doing that.
Another area that I am considering involves the creation and retention of community assets and how we support the transfer of unwanted public assets to communities to be used for the public good. For example, I am interested in the status of local authorities’ common good registers, which need to be kept up to date. Are they? Are the things listed on those registers actually being used for the common good? Can we add more things to those registers?
This bill at stage 1 legislates for only two things. One is to mandate that the Scottish Government create a community wealth building strategy, although not that it then has to follow it—but we will come to that. The other is to mandate that certain public bodies get around the table with local authorities to come up with community wealth action plans. Neither is a bad idea, and I look forward to working with all members at stages 2 and 3 of the bill to make them better.
I call Richard Leonard to close the debate on behalf of Scottish Labour.
16:05
For me, it is simple: we should have local economies where far more power rests in the hands of local workers and local communities and is not left in the hands of absentee directors in faraway boardrooms. We should have a redistribution of wealth and power. We should have a democratic alternative to extractive capital and neoliberal economics, because we have seen, over the past decade and a half, just how badly exposed to economic shocks we are.
In the end, this is about political will and political priorities. By offering people hope out of despair and by offering a democratic renewal in the economy, in place of widespread discontent, we would be offering them an alternative to the politics of division and of the authoritarian right.
There are some self-evident and conspicuous holes in the bill. What about supporting credit unions, some of which the Minister for Business and Employment and I met just yesterday, when they were lobbying Parliament? What about legislating to empower municipal, community and co-operative ownership of energy, as Lorna Slater said? What about our local government pension schemes, which are worth £60 billion? Are they not relevant public bodies? The Strathclyde pension scheme alone is valued at £28 billion, yet little of that is reinvested in the local economy and, even when it is, that is usually through financing vehicles that are themselves absentee multinational corporations or venture capitalists. What about the Scottish National Investment Bank? Should that public bank not have a statutory duty to support democratic forms of ownership in our economy?
What I am talking about is community wealth building from the root up: a mosaic, not a monolith, and not a command economy but one that is decentralised and socially owned. I am talking about a democratic socialism that embraces municipal ownership, co-operative ownership, worker participation and worker ownership and control.
I am bound to say that what the bill illustrates is the insufficiency of nationalism and a Scottish National Party Government that has long ago abandoned its radicalism. The bill should be a new path to those old ideals of co-operation, solidarity, democratic reform and of peace and prosperity, founded on principles that are rooted in a collective view of society.
Many of us in the Labour Party come from a radical, democratic and socialist tradition that finds its contemporary form in a community wealth building movement. It is of no surprise to me that two of the movement’s outstanding leaders—Matthew Brown in Preston; and Joe Cullinane in North Ayrshire, who Katy Clark spoke of—are, and have been, Labour Party municipal socialists. The Labour Party should never be about the promotion of market forces and excessive wealth accumulation. It should always be about people before profit and the more equal society. That is who we are and who we always should be.
What we are witnessing with this bill is not just shallowness, moderation or timidity. What we are witnessing is an abject abdication of responsibility. The Scottish Government promised to bring forward a community wealth building act
“to redirect wealth, control and”
community
“benefits to local economies”
It is my fear that the bill, in its current form, will do little to even measure that and will do nothing whatsoever to drive it. This bill does not rewire the economy—a property that Kevin Stewart claimed for it earlier. If the Government wills an end, the Government must also will the means to it—a point that both Katy Clark and Maurice Golden made in the debate
We will vote for the bill in principle. We will seek to amend it. We will seek to co-operate with the Government in that task, because, in the end, it is in all of our interests to make this a community wealth building act worthy of the name.
16:10
It is always interesting to find out which Labour Party has turned up for a debate, and we can see very clearly which Labour Party has turned up today. I salute Richard Leonard’s steadfast commitment—for all the years that I have known him—to the socialist principles of overturning the bourgeoisie and establishing a people’s republic.
Roll the tumbrels!
Indeed—do not encourage him, please.
The Scottish Conservatives do not disagree with the ambition that ministers claim lies behind community wealth building, because stronger local economies, vibrant high streets and genuinely resilient communities are aspirations that we should all support. Our disagreement is about not the principle but the method. The method that is set out in the bill is flawed, limited in ambition and weighed down by bureaucracy.
When I listen to Government ministers’ speeches generally—and, certainly, to speeches from members of the Labour Party and of other leftist parties in the Parliament—on community wealth building, what strikes me most is the astonishing lack not just of scale and vision but, in some cases, of connection to reality. Too often, we hear community wealth building spoken about as though awarding a handful of small contracts to a handful of small organisations represents some great leap forward in economic transformation. It is nothing less than box ticking, it is small-ball economics and it is hardly a strategy for rebuilding Scotland’s prosperity.
Community cafes, volunteer-led woodlands and social enterprises are all valuable contributions to civic life, but they should not be the ceiling of our ambition. Scotland cannot content itself with a narrow circular economy of microcontracts that are passed around a small number of actors. We must be bolder than that. If we are to build genuine national and community wealth, we must harness the full entrepreneurial spirit of the Scottish people. That is why the five pillars matter—not as slogans but as levers for a genuinely ambitious economic strategy.
A lot has been said about procurement. Anchor institutions can and should play an important part in reshaping the Scottish economy at its foundations, by supporting productivity, capability and scale, rather than simply rewriting procurement guidance. Procurement should be strategic, not performative.
On employment, better jobs come from investment, innovation and productivity, not from state mandates or new duties. Growth improves wages. We cannot tax our way to growth, Richard Leonard. Bureaucracy depresses wages.
On land and property, the Scottish state—the largest landowner in the nation—is sitting on unproductive assets. If ministers were serious, they would release land for productive use by those who can create jobs, investment and prosperity. Instead, we get more frameworks.
On ownership, co-operatives and social enterprises have a role, but they are not inherently superior to private enterprise. The Government’s ideological tilt risks distorting procurement and squeezing out the very businesses that drive Scotland’s tax base and innovation.
On finance, we should be unlocking real investment by modernising pension structures, empowering—yes—local financial institutions, such as credit unions, and supporting capital formation across Scotland.
However, none of that requires this bill. The Government has the power now to do those things. The problem is that the bill does not do the things that genuinely build wealth. Instead, it does what the Government so often does: it creates new duties, new partnerships, new statements, new plans, new reporting cycles and new ministerial powers; it centralises; it prescribes; and it expands ministerial discretion while offloading obligations on to public bodies that are already stretched to breaking point. The bill demands action plans, but with no obligation to demonstrate results and no requirement to show improvements in productivity, business growth, wages or investment. Compliance is measured in paperwork, not outcomes. Scotland has had enough of government by process.
Local authorities, health boards, colleges and enterprise agencies all warned the committee of the substantial new burdens that the bill will create, but the financial memorandum claims that the cost will be minimal. That is simply not credible. There are obligations without resources, responsibilities without clarity and expectations without realism.
Let me say this plainly: the bill hands ministers sweeping powers to issue binding guidance, revise national statements at will and add public bodies to the statutory regime with limited scrutiny. That is not decentralisation; it is the expansion of state power through the back door.
If we have real ambition and real vision, Scotland can be a genuine leader in community wealth building—not the limited, bureaucratic version that is set out in the bill, but a model that unleashes the full entrepreneurial capacity of the Scottish people. The framework that is before us contains elements that we can support, which is why we will vote for the bill at stage 1, but let us be honest: as drafted, it is far too narrow, process driven and centralised to deliver the transformation that ministers claim will be delivered.
As, I think, the minister knows, real community wealth is not created by another statutory plan or another set of ministerial powers; it is created by investment, enterprise, the productive use of land, competitive procurement and the hard graft of growing businesses. It is created when the Government steps back from ideology and steps up to support innovation, skills and local success. Only when we couple the principles of community wealth building with the natural entrepreneurship of the Scottish people will we see the gains in productivity, investment and prosperity that Scotland urgently needs. That is the challenge for the Government as we move to the next stage of the bill. If ministers meet that challenge, the Parliament can turn an underpowered framework into something that is worthy of Scotland’s potential.
16:17
I thank all members who have contributed to this wide-ranging debate, which has taken various twists and turns over the past hour or so, although that was not totally unexpected.
I will start by reflecting on some of Daniel Johnson’s comments about the committee’s consideration of the bill. First, is the bill necessary? Indeed, that was the first question that I asked officials when I took over responsibility for the bill last year. Daniel Johnson answered the question quite effectively by noting that it will provide a clear obligation to act.
It is important that we consider the bill as being a step in a process. Many have recognised the significant work that has already taken place over a long period to build community wealth and the mechanisms that come with it, whether that is what we have done on procurement, which I will come back to, what has happened with community asset transfers or the range of support and interventions that the Government has provided. The bill is a step on the journey as we cement and embed community wealth building in communities across Scotland.
The next step on the journey will involve providing the platform, standards and requirements that local authorities and partners will need to step up to. Willie Coffey and other members recognised that that is exactly what the bill will provide.
It is absolutely true to say that the guidance will contain answers to many of the issues that have been raised today. I have been clear that we need to pull together the content of the draft guidance at an early stage. That guidance will lay out what local authorities and their partners are expected to provide as part of the process. The setting out of those expectations and that floor is an important part of the process. The guidance will include evaluation mechanisms, which have, rightly, been mentioned, including by the committee. It will also include how the wider business community, the third sector, community groups and others should be involved in the process. The requirement to consult them is central to the approach.
There has been much talk and back-and-forth about targets. To be clear, the Government believes that locally set targets can be an important part of taking forward community wealth building at a local level—I think that everyone agrees that it would not be the right approach for the Government to set those targets. When we talk about statutory targets, members need to be careful about what exactly they are asking for. The guidance will set out that local authorities will be able to put together targets; that requirement will be set out. However, I do not think that anyone wants to see a statutory setting of numbers by the central Government.
Does the minister accept that most of the members who commented on the setting of statutory targets spoke not about the setting of specific numbers but the idea that we need to have some measurable outputs? Currently, nothing in the bill comes anywhere near to being a measurable output.
I accept that. I talked about that with the committee, and I have talked about it with stakeholders. It is important to design the system in a way that gives scope for local authorities and their partners to set targets locally. Members are clear that, although a requirement can be set, the targets need to be set locally.
I want to touch on the issue of procurement, which was raised by a number of members. I would like to think that no one works harder than I do in engaging with local businesses. This week, I have engaged with more local businesses and Scottish start-ups to get them plugged into procurement across the Scottish public sector. Our procurement team, which works tirelessly on the issue, recognises that the £16 billion that is spent across Scotland’s economy by public sector organisations is a huge engine for growth. I make that point repeatedly during all my engagements on the matter.
I absolutely recognise that there is more work to do. There are more opportunities to be opened up and more mechanisms to be created to streamline processes. We continue to work tirelessly on that. I just ask that members reflect on the progress that has been made.
For example, south of the border, 20 per cent of public procurement money is spent on small and medium-sized enterprises. For the Scottish public sector, the figure is 47 per cent—more than double the figure south of the border. We should be proud of that, while recognising that there is further to go. It was interesting to listen to Katy Clark reflect on the wonderful work that is being done in North Ayrshire. I had the pleasure of visiting the Lochshore initiative recently to see the great work that is going on there. She held up the figure of 26 per cent as a fabulous local achievement—which it is—but we should recognise that the figure of 47 per cent has been achieved across the whole of Scotland, according to the reported data.
Members mentioned compulsory purchase orders and compulsory sales orders. A consultation on the matter is being held now, with some great work being done by Roseanna Cunningham and an expert group. Following the consultation, the Government will bring forward proposals on how to modernise the CPO system to make it even more effective. The introduction of compulsory sales orders is also being considered as part of that process. That work is under way.
Likewise, there have been calls from some quarters for changes to procurement thresholds. Some members mentioned that, but they should be aware that we already have a consultation on that issue. Legislation is not needed to change the thresholds. The quickest way to make those changes is through the process that we have taken forward through that consultation, rather than doing it through the bill.
Some of the interventions in the debate were very effective in focusing on what is already happening locally. As I mentioned, Willie Coffey and Katy Clark highlighted some great examples, which point to the fact that community wealth building is not new—it has been embedded in many parts of the country. Great work has already been taken forward, but the bill will give us structure and a framework.
We also need to minimise the bureaucracy that is involved. Members know that no one is more focused on minimising bureaucracy than I am. I want to make the process as streamlined as possible by providing the focus, requirements and framework so that all parts of Scotland can move up to the level of the best examples that have been identified.
This is not the end of the journey—we can continue to do much more beyond what I have set out to deliver the bill’s objectives on public spend, the fair work agenda, the management and control of assets, community ownership and support for businesses. We also want to ensure that the other types of ownership that we all want to see more of are supported across the country.
I look forward to working with members as we take the bill forward over the coming weeks and months to deliver the next stage in the journey towards more thoroughly embedding community wealth building in support of Scotland’s growing economy.
That concludes the debate on the Community Wealth Building (Scotland) Bill at stage 1.