Chamber and committees

The Government’s position on the four amendments in the group is that they cannot be supported.

Amendment 85 seeks to create an additional requirement for community wealth building partnerships to assess

“economic leakage from the local area”

and include measures in the action plan to address that. Amendment 118 is consequential to amendment 85 and would provide that the measures listed in section 5(5) may be used to address economic leakage. If Richard Leonard’s amendment 60 is agreed to, the measures would have to be used for that purpose.

10:00

Under section 5(4) of the bill, community wealth building action plans

“must set out the measures”

that the partnership

“is taking, or intends to take, to facilitate and support the generation, circulation and retention of wealth in the local economy.”

It would seem to me that retention of wealth in the local economy and the prevention of economic leakage are two sides of the same coin.

Further, although everyone wants to see our local businesses grow and access opportunities for growth from public procurement, many goods and services will need to be purchased in the wider region or beyond. As such, I think that amendment 85 is not necessary. The issue could be explored further in dialogue as we develop the statutory guidance.

Richard Leonard’s amendment 60 seeks to amend section 5(5) to change the wording as regards the listed measures from “may” to “must”. That would create a legal obligation for community wealth building partnerships to include those measures in their plans rather than afford them discretion to include and prioritise actions and measures that are most relevant to their local areas.

Further, because section 8 requires partnerships to

“implement the measures set out in the plan”

so far as that is reasonably practical, amendment 60 would have the indirect effect of making the adoption and implementation of the listed measures effectively mandatory, unless there were practical reasons why they could not be implemented. Although the Government’s position is to support a similar proposition linked to the community wealth building statement by Scottish ministers—amendment 21—in my view, amendment 60 places too much restriction and prescription on community wealth building partnerships in preparing their action plans where local flexibility is essential. We therefore cannot support amendment 60.

We cannot support amendment 25, in Lorna Slater’s name, for similar reasons. It would require action plans to be aligned with other listed plans, those being community action plans, local place plans and local development plans. It should be left to those in the lead in local areas to ensure that plans with relevance to one another are aligned, rather than being obstructed through primary legislation. I do not want to tie the hands of partnerships as regards what they can and cannot do in their action plans. Issues of linkage and synergy can more appropriately be explored through development of guidance, and I am happy to give the undertaking that Lorna Slater sought with regard to discussing how that can be reflected in the statutory guidance.

I am very happy to do that, convener. I can meet you, Murdo Fraser and others who are interested in the targets and in seeking to lodge amendments at stage 3 that will deliver what we all want to have, while keeping as much flexibility as possible, in line with the context that I have outlined.

The Procurement Reform (Scotland) Act 2014 already provides a strong foundation. It requires authorities to consider how procurement can improve economic, social and environmental wellbeing and to facilitate the involvement of SMEs, third sector bodies and supported businesses, while treating all operators equally. Scotland already performs strongly in that respect. As I have indicated previously, the latest data shows that fully 47 per cent of Scotland’s public sector procurement spend is with SMEs, which is far in excess of the proportion across the rest of the UK and, indeed, more widely across Europe.

Amendments 28, 29, 29A, 29B, 68, 108, 110, 112 and 142 relate to reviews and broader reforms of contributory policy areas. Amendment 29 would require the Scottish ministers to review the contribution of the Procurement Reform (Scotland) Act 2014 and the Community Empowerment Act (Scotland) Act 2015 within one year of the bill receiving royal assent. That is unnecessary. We have recently consulted on the scope for increasing contract thresholds in the 2014 act and lowering thresholds for community benefit requirements. That consultation closed on 8 January, and responses are being analysed.

It is worth reflecting on the list of bodies that members want to include. It is important to recognise that the relevant bodies—the community wealth building partners—already have the ability to invite specified bodies to participate in preparing the plan. That is an important piece of the plan.

It is important to get the proportionality right and not to place too many requirements on those bodies. Many of the listed bodies are not legally distinct from Scottish ministers anyway, because they are directorates of government or they are—

Indeed.

I start by confirming that the Government will support Lorna Slater’s amendment 21, which makes the list of measures in section 1(3) mandatory rather than discretionary. It is right that a core compulsory suite of measures is covered in a community wealth building ministerial statement. However, a fit-for-purpose core set was included in the bill at introduction, subject to some small modifications, which are the subject of my amendments in the next group.

My amendment in this group, amendment 71, seeks to make it clear that, although community wealth building is an economic policy that can make a contribution to growth, the form of growth that we seek is sustainable and inclusive.

I know that Lorna Slater lodged amendment 70 to remove section 1(2)(b) from the bill entirely, but I consider the pursuit of growth to be critical for Scotland’s economic future and a core objective of the bill, and I do not think that the bill mentions GDP per se. I hope that the member will withdraw her amendment and support the amendment in my name to clarify the nature of the growth that is sought. I urge all members to support my amendment 71.

The Government will support Sarah Boyack’s amendment 72, although there is room for debate about whether any particular economic growth is or is not in line with the United Nations resolution referenced in the Climate Change (Scotland) Act 2009, to which the amendment refers. The community wealth building statement can encompass that, even if the UN goals are due to be reviewed in 2030. I urge members to support amendment 72 and the associated amendment 117.

The Government position on all other amendments in the group is not to support them. I will take each in turn briefly. Amendment 30 is not required, chiefly as the pillars of community wealth building are already reflected, albeit not specifically referred to, in section 1(3) of the bill as introduced. I also have concerns that there may not be universal agreement about what the five pillars of community wealth building comprise, and that using such high-level concepts in legislation without defining them could create uncertainty. Their implementation can best be taken forward in guidance.

On amendment 73, in Sarah Boyack’s name, highlighting community organisations and local businesses as the intended beneficiaries of community wealth building activity is too narrow. The amendment would restrict the measures that ministers could take in the community wealth building statement to those supporting the generation, circulation and retention of wealth only by community organisations and local businesses, not more broadly. Therefore, the amendment does not attract Government support.

Although I understand that Sarah Boyack’s amendment 74 has the same intention as Lorna Slater’s amendment 21, I ask the member to withdraw amendment 74 and support amendment 21. In essence, it comes down to the word “must” being stronger and less ambiguous than “should” in this context.

Regarding amendment 40, in Lorna Slater’s name, the Government’s position is that such activity in the energy policy context is best taken forward in guidance. The Government wants to avoid a lengthy prescriptive list of mandatory measures in the bill that must feature in a ministerial statement, and the current drafting offers flexibility for those matters to be included without being specifically mentioned in the bill.

The Government does not support Lorna Slater’s amendment 32, as the actions set out in the statement will need time to evidence support of the delivery of national planning framework outcomes. Describing in the statement the relevant indicators of success for community wealth building is an approach that any Government should consider. However, in my view, it is not appropriate for primary legislation to oblige future Administrations to abide by an overly exacting list of mandatory demands as to how they should approach the preparation of the statement.

Finally, on amendment 79, in the name of Lorna Slater, local authorities are already under a statutory duty in section 102 of the Community Empowerment (Scotland) Act 2015 to establish and maintain a register of property held by the authority as part of the common good. That duty has been in force since June 2018. If local authorities are not complying with a statutory duty within a reasonable timescale, I am not clear that including provision in a statement will be effective in bringing them into compliance. To the extent that there is an issue with non-compliance by local authorities, the community wealth building statements proposed by this bill are not, in my view, the place to address that.

I will make one or two more general points, if I may, convener. It is clear that there is widespread support for the bill among stakeholders, but it is important that we give community wealth building the best chance to succeed. That requires a clear focus and requires the bill to create a consistent platform for implementation. It is therefore important to avoid unnecessary administration burdens on public bodies, local authorities and others. The guidance in that regard—you will be aware of the work that we have done on that—is important.

The Government’s position is to resist all amendments in this group except amendment 82. I ask members who have lodged the remaining amendments to withdraw them, and I will briefly explain why.

With regard to amendment 82, in the name of Sarah Boyack, the provision in the bill as it stands is proportionate in respect of progress reporting. However, reporting on the impact of the community wealth building statement and the measures that are contained in it, in the way that is suggested by the amendment, might complement the bill, so I am content to support that amendment.

Sarah Boyack has lodged amendment 108, which would oblige the Scottish ministers to commission an independent review of the impact of the measures in the statement, and her amendment 83 relates to reporting on the steps taken in response to such a review. The Government’s position is that it should be accountable to Parliament and that primary legislation is not required for a future Administration to commission an independent review. Our position is therefore not to support amendment 108 in group 9 or amendment 83 in this group, to which it is linked.

On amendments 33 and 35, regarding the use of metrics, substantial dialogue would be needed with COSLA and others before the inclusion of commentary on metrics in the guidance. The guidance that must be prepared under section 9 will be developed alongside the ministerial statement, and that guidance is the appropriate place to set out advice on monitoring progress. That is particularly important at the local level, where economic structures vary significantly between communities. At the national level, community wealth building connects to many other policy areas, so guidance will ensure coherence and alignment across those links. Work on measurement at large should be conducted as part of the guidance work strand. That will inform the approach of ministers as to what could be in a national statement about targets and objectives.

Amendment 54, in Richard Leonard’s name, specifically highlights reporting on businesses that are operating with inclusive and democratic business models. That issue may well feature in reports on progress that are required under section 4. However, the amendment is too specific in obliging reporting on certain types of businesses only.

The Government does not support Richard Leonard’s amendments 55 and 56, which seek a move to a yearly reporting cycle instead of five-yearly reporting. Such a short reporting interval is not desirable in a policy context where change in outcome terms needs to be measured and observed over a longer timescale.

I therefore urge members not to press or move those amendments, and, if they are pressed or moved, not to support them.

The Government’s position is to resist all amendments in the group, except for amendments 23 and 34, in Lorna Slater’s name.

With regard to amendment 23, ministers are already obliged to

“have regard to the just transition principles set out in section 35C of the Climate Change (Scotland) Act 2009”,

so the amendment is not essential, but, in order to strengthen the obligation in an economic policy context, we are, on balance, able to support it.

11:45

With regard to amendment 122, the economic democracy group is already looking at all recommendations made in the independent report “Developing Scotland’s Economy: Increasing The Role Of Inclusive And Democratic Business Models”. I therefore see no need for the amendment, because the work of that group can feed into the first community wealth building statement.

In response to Richard Leonard’s earlier comments about the group not meeting, I understand that the group met last year. The group falls under the business minister’s portfolio and is chaired by senior officials. My officials are very happy to engage with Mr Leonard to advise him about the group’s status.

On amendment 123, the matter of using community share and bond models involves a level of detail that is best suited to the guidance. The bill intends to provide a framework for the preparation of a statement and action plans, not to prescribe consideration of specific financial mechanisms.

I encourage members to support all four amendments in my name in the group, as well as amendment 128, in the name of Lorna Slater. Amendment 84 is a small adjustment to make it clear that local authorities and their relevant partners must develop a community wealth building action plan together, as opposed to producing one each. The latter unintended interpretation was highlighted during stage 1.

Amendments 92 and 93 are linked. Amendment 92 seeks to ensure that there is inclusive development of local action plans by adding specific requirements to consult representatives of the community, businesses and the third sector. Amendment 93 ensures that local authorities are transparent about how they consult during the preparation period and how they factor in views that have been received in framing the final document.

Amendment 100, in my name, adjusts the bill to ensure that there is clarity on local authorities’ role in publishing a revised action plan. Section 5(2) already makes it clear that the responsibility for that falls to the local authority. However, the wording of section 7(3) also needs to be tightened to make that clear. The Government’s position is to resist the rest of the amendments in the group, except amendment 128. Although existing statutory provisions set out how common good assets can be used, I do not think that introducing additional measures via the bill would impact negatively on existing provisions. Therefore, the Government’s position is to support amendment 128.

On amendment 18, I agree with the importance of consulting with businesses on community wealth building action plans, but I invite the member to speak to me about that prior to stage 3. I am concerned that obliging local authorities to consult all businesses that are operating in the relevant local area goes too far and represents a significant task. As I say, I would be happy to discuss that further and I hope to find a more workable solution for consulting businesses. In addition, it is worth highlighting amendment 92, in my name, which would require persons who are considered representatives of businesses, amongst other things, to be consulted. Should Murdo Fraser find my amendment satisfactory, perhaps he could consider withdrawing his amendment 18.

I turn to amendments 125 and 129 in Paul Sweeney’s name. The Government cannot support amendment 125, as it places too high a focus on one potential collaborative partner, namely credit unions, for community wealth building partnerships. Credit unions are important bodies in the context of community wealth building, but not to the extent that they should be isolated and elevated above others in the way that amendment 125 proposes. Amendment 129, which proposes a specific obligation on local authorities to consult credit unions, cannot be supported by the Government on the same grounds.

Richard Leonard’s amendment 61 is similar to amendment 125 in its selective focus, this time on Co-operative Development Scotland, which is part of Scottish Enterprise, the public body that will be obliged to be part of the development of every community wealth building action plan. Therefore, there is no requirement for amendment 61. I urge the member to withdraw it.

Sarah Boyack’s amendment 91 reminds me of the huge importance of working with communities to maximise the impact of community wealth building as a policy and a model of local economic development. However, an obligation to consult any community bodies operating in a relevant area when preparing an action plan—in other words, all of them—seems quite onerous in practice. I respectfully ask the member to withdraw the amendment and consider supporting my amendment 92 instead, which would require there to be consultation with such persons that the community wealth building partnership considers as representatives of the interests of the community.

I encourage Lorna Slater to withdraw amendment 38, which adds additional entities that must be consulted by local authorities when preparing an action plan, and support amendment 92. The combination of the proposed consultation requirements, as amended by my proposed amendments, and statutory guidance can address the issue of adequate consultation.

Finally, on Richard Leonard’s amendment 65, the Government cannot support imposing a requirement to update action plans every year. In my view, that is too frequent. Further, that would need to be discussed with COSLA and others prior to committing community wealth building partners to an annual timescale for revising action plans.

I have a few brief comments. I hear Paul Sweeney’s points about credit unions. My previous comments were not intended to downplay the critical importance of credit unions; they were more a reflection on how other types of bodies could or should be considered in the same vein when we articulate the legislation. Having said that, I am happy to meet Paul Sweeney and engage on that point in advance of stage 3, to talk through the Government’s position.

I thank Murdo Fraser for agreeing not to move his amendment 18, and look forward to engaging with him on that specific point on businesses.

On Sarah Boyack’s point about community bodies, there are real concerns about how to define a community body and how to find out how many there are in any given area—there could be many hundreds of them. What would happen if you miss one? I get the intent behind her amendment, but it is an impractical approach to address the issue.

I press amendment 84.

The Government position is not to support any of the amendments in this group. Amendment 6, in the name of Lorna Slater, would impose a legal obligation on the Scottish Government to consider the contents and relevance of its published community wealth building statement when making any other Government policy, including proposals for legislation. Seeking a productive synergy between linked Government policy should be a staple for any Administration, and I do not think that we need an obligation to undertake such activity to be set out in primary legislation. We should also bear in mind the principle of parliamentary accountability, wherein the reporting requirement lies.

Amendment 124, from Paul Sweeney, would impose a legal obligation on ministers to implement their community wealth building statement. The statement is a list of measures that the Scottish ministers are taking or intending to take, so I see no necessity to compel the Scottish ministers to be legally obliged to implement the measures. There will also, rightly, be scrutiny by Parliament through the mechanisms of laying the statement and the reports on progress before it.

Amendment 102 from Paul Sweeney would amend section 8 of the bill to remove the words

“so far as reasonably practicable”

from the provision. The revised provision would state:

“community wealth building partners must implement the measures set out”

in their action plan. That would obligate local authorities and the relevant public bodies to implement actions as set out in the plan, even if they prove to be impractical or impossible to deliver for any reason. My concern is that that would reduce flexibility and might actually inhibit the ambition of community wealth building partnerships.