The introduction of the Bill reflects the Scottish Government’s wider ambition to reduce inequality and empower local communities, and builds on initiatives such as Community Empowerment, Community Asset Transfer, Fair Work and Sustainable Procurement.
What is Community Wealth Building?
Community Wealth Building (CWB) focuses on ensuring that economic wealth is 'generated, circulated and retained in local communities'. There are five pillars to CWB:
- Local spending: ensuring money is spent locally through procurement and commissioning. Public authorities can support local businesses through frameworks and tender opportunities.
- Workforce: ensuring fair work practices, developing local labour markets and improving access to local employment.
- Land and property: ensuring local land and property can be accessed and used by the community for the benefit of that community.
- Inclusive ownership: supporting the development of social enterprises, employee-owned structures and co-operatives.
- Finance: ensuring money flows into local economies and investment is retained in the local area to support communities and businesses.
Five CWB pilots have already been carried out across Scotland and have seen local authorities working closely with other public bodies to redirect wealth back into local communities. Local authorities have been identified as the 'anchor organisations', holding both the knowledge and resources to help local economies grow through, for example, local procurement, the provision of local assets, and business and employability support. During the pilots, local authorities were supported by local NHS boards, local businesses and other third sector organisations. These pilots and the subsequent feedback have helped set the scene and lay the foundations for the Bill.
What does the Bill do?
CWB is an approach intended to encourage local authorities to work with local communities to support growth, create employment opportunities and ensure communities have a greater stake in their local economy. CWB has been operating in practice in Scotland for over ten years, and the Bill seeks to provide clarity and ensure a consistent approach by local authorities in supporting CWB across Scotland.
The three key requirements of the Bill are:
1. Community Wealth Building Statement
Scottish Ministers are required to publish a CWB Statement setting out the measures they intend to take to:
- reduce economic and wealth inequality; and
- support economic growth across Scotland.
The CWB Statement must be revised and reported on at least every five years, meaning that changes over time are likely to be incremental.
2. Guidance
Scottish Ministers are required to publish guidance on the CWB Statement for local authorities. The guidance must include information on creating CWB Action Plans, support the aims of the Bill, and be published within 18 months of the Bill coming into force. Importantly, the specified public bodies set out in the Bill must review the guidance when developing their corporate plans or delivery strategies to ensure their processes comply with the Bill.
3. Community Wealth Building Action Plans
Local authorities are required to prepare and publish, in partnership with specified organisations, a CWB Action Plan. The Action Plan must set out the measures the local authority, and its partners, are taking or intend to take 'to facilitate and support the generation, circulation and retention of wealth in the local economy'. The named public bodies listed in the Bill include universities, health boards and enterprise agencies. The plans must be prepared within three years of the relevant section coming into force.
Positively for smaller local authorities, two or more local authorities may create joint Action Plans, reducing administrative costs. It is important for local authorities to bear in mind that the Action Plans must ensure the consistent implementation of the CWB model across Scotland.
During Stage 1 of the Bill, concerns were raised about the lack of financial estimates for the costs of government, implementation and monitoring. This is likely to be debated further at Stage 2 and will be critical to the success of the Bill. Concerns have also been raised about the lack of monitoring provided by the Bill. Without clear mechanisms for monitoring and compliance, questions have been raised about how the Bill will operate in practice. It is anticipated that amendments may be considered at the next stage to address these points, potentially introducing a monitoring framework that would apply to local authorities and other public bodies.
If enacted, the Bill is expected to have a notable impact on local authorities and other affected public bodies. Developing the required Action Plans is likely to involve a commitment of time and resources, although many local authorities already have elements of community wealth building reflected within their existing economic development strategies.
The Bill is currently at Stage 2 in the Scottish Parliament, with MSPs having had until 8 January 2026 to submit amendments. A meeting to discuss the amendments is scheduled to take place on 14 January 2026. We will continue to provide updates as the Bill progresses through the Scottish Parliament.
If you have any queries or would like advice on community wealth building, community empowerment, local procurement, fair work or community asset transfer, please contact a member of MFMac’s Public Sector team.
This article was co-authored by Rhona MacLeod, Legal Administrator in MFMac's Commercial team.
