The Community Wealth Building Act has received Royal Assent, marking a historic shift in Scotland’s economic landscape. This world-first legislation formalises the Scottish Government’s strategy to generate and retain wealth within local communities. Now fully enacted, it provides the legal foundation for a fairer, more circular economy across all of Scotland.
This approach, known as Community Wealth Building, focuses on tackling economic and wealth inequalities while driving inclusive growth by creating local jobs, investing in unused spaces and boosting small business support.
What public sector organisations must do to comply
The introduction of this Act sets out what is required from public sector organisations to harness cross-sector collaboration that nurtures positive economic outcomes.
While a community wealth building plan has already been adopted by some local authorities in Scotland, the bill shifts this to a statutory requirement. These mandatory strategies are designed to translate Community Wealth Building principles into local reality, ensuring that economic benefits are retained within the area to foster long term prosperity.
Creating an effective Community Wealth Building Action Plan
The Community Wealth Building model is built on five pillars of economic activity, which form the practical basis for the action plans.
These pillars are:
- Spending - Leveraging procurement expenditure with the strategic use of SME’s and micro enterprises in public sector contracts and maximise community benefits delivered.
- Workforce - Implementing fair employment practices and developing local labour markets through access to local and fair employment opportunities, fairer wages, skills development opportunities, and improved wellbeing of employees.
- Land and Property - Growing social, ecological, financial, and economic value that local communities gain from land and property assets.
- Inclusive Ownership – Supporting local and inclusive enterprises to generate community wealth such as cooperatives, and social enterprises to promote locally generated wealth that stays in the community.
- Finance - Ensuring money and investments are retained in local areas, and available to support communities and businesses.
By using collective power as authoritative bodies through each pillar, local authorities and public bodies can transform how wealth is generated, shared, and reinvested where it was earned.
How SPA solutions are developed to encourage local businesses
As Scotland’s leading framework provider, SPA develop procurement solutions trusted by over 140 public sector partners to address priorities and ambitions. Working with our committee, industry bodies and our public partners to establish provisions that encourage local supply chain coverage. Our solutions have contributed to significant opportunities for local businesses.
Reserving spaces for local businesses
We foster a diverse, compliant, and local supply chain for every project, providing an accessible entry point for SMEs and micro businesses. SPA frameworks often have specific lots segmented by region or value bands, actively encouraging small and medium sized enterprises to successfully bid for work. We also reserve spaces on most of our frameworks specifically for micro and SME’s who align with our quality guidelines. Alongside this, we have a range of dynamic purchasing systems developed to support the participation of local businesses.
Measurable Social Value
SPA is committed to keeping wealth within the community by reinvesting framework surpluses into local projects via the SPA Community Benefit Fund. Our Social Value Strategy has integrated social mobility, individual wellbeing, and environmental considerations into each solution since 2024. We ensure all appointed companies are equipped to deliver meaningful and proportionate community benefits that provide a positive and sustainable impact that can be measured.
Fair Work First
Aligned with the Scottish Government’s Fair Work First policy all of our frameworks assess bidders on their approach to ensuring fair working practices for all employees, including investing in employee development, flexible working practices, providing fair pay for workers, and offering a channel for effective voices through trade union recognition. Bidders are expected to demonstrate how they implement these practices and how they are working towards meeting all aspects of this policy.
Our Partnership with Supplier Development Programme
Our partnership with the Supplier Development Programme plays an important role in Community Wealth Building, proactively raising awareness of supply chain opportunities among local businesses. It helps us identify how best to support smaller organisations and provides a platform to share our upcoming opportunities.
It also enables us to attend events such as Meet the Buyer, where we engage with the local supply network, preparing local firms to meet the high standards of public sector projects.
