Community Wealth Building – the beginning of a new economic order

Joe Cullinane explains what North Ayrshire council is doing to roll back the neo-liberal tide.

We are in the midst of the biggest economic and social crisis of our lifetimes. Coronavirus has exposed the fragilities of our prevailing economic model which for decades has been based on extraction rather than production. An economic system where ‘economic growth’ has not resulted in higher wages and raised living standards for the many, but rather the massive accumulation of wealth by the few.

The last decade of austerity accelerated the disinvestment and disempowerment that has entrenched poverty in communities across Scotland and the current pandemic threatens to make it even worse. How we respond to the crisis will shape Scotland for decades to come – and now is not the time for more empty rhetoric. Vacuous proclamations like ‘Inclusive Growth’ or ‘Community Empowerment’, that have so easily rolled off the tongue of national politicians in recent years without any semblance of action or practice, will not suffice. We need a complete reset on the economy, from national government but also local government.

In North Ayrshire, my Labour administration is seizing the moment to press reset and to create a new local economy. North Ayrshire is an area with some deep-seated problems. Deindustrialisation in the 1980s ripped the heart out of Ayrshire’s proud industrial heritage. Big employers left and alternative employment never came. Local economic development has been largely limited to the pursuit of inward investment in the hope that, if the investment ever came, the benefits would trickle down to our citizens and communities. But readers of Scottish Left Review do not need me to tell them that trickle-down economics does not work. Instead, all it has done is rapidly increase wealth inequality, and in North Ayrshire its pursuit has resulted in up to 1 in 3 children in some of our communities being brought up in poverty.

It was clear before the Covid pandemic that we needed to break from the traditional economic development approaches that got us here in the first place. And in May, in the middle of the first lockdown, we launched Scotland’s first Community Wealth Building (CWB) strategy, setting out a new approach to the economy that will intentionally use the economic levers available to the local state to redirect wealth and economic control to the local economy and our communities.

Those economic levers include our public procurement spend, which totals over £1bn pa across the public sector in Ayrshire, the land and assets that we own and the power we can exert on the local labour market as the largest employers in our local and regional economy. But what is at the heart of our CWB strategy is more democratic control of the economy.

Take procurement for example, our intention is to support and create new local supply chains with more procurement spend, helping to create more local employment – but that’s not the limit of our ambitions as we want to use the spend to expand democratic forms of ownership by supporting co-operatives, social enterprises and worker owned businesses.

Similarly, we want to use the land and assets that we own for the common good. Too often, as a result of austerity, public bodies over the last decade have seen the land and buildings that they own simply as financial assets to be sold to manage budget cuts. That approach fails to recognise the actual economic and social value of those assets and through CWB we want to start realising that value by putting our land and assets into productive use to benefit the community. We will do that by pursuing policies that will transfer ownership to the community, convert vacant buildings in our towns into council housing and allocate land for rewilding and renewable energy generation to aid our fight against climate change.
As Ayrshire’s economy declined following deindustrialisation, family-owned businesses became the backbone of our economy. Those business have sustained employment for many through difficult times but so few family-owned businesses have succession plans in place representing a massive risk to our already weak labour market. That’s why our CWB strategy sets out the intention to work with those businesses on succession plans, and where possible to support their transition to worker ownership as the most viable option to protect the business and the employment it provides.

In total our strategy contains 55 actions. It is not a short-term project but a long-term intention to create a fairer, more inclusive, sustainable and democratic economy from the bottom up and that means it includes longer-term actions. One such action is to explore the creation of a West of Scotland Community Bank. It would be a mutually-owned bank that has a full banking licence from the Bank of England, enabling it to use its customers deposits to create new investment to support the regional economy it serves.

CWB is more than just another concept or term. Rather, it is economic practice that has the potential to turn the dial on our current economic model and to create new local economies that tackle the big issues we face such as poverty and deprivation, the concentration of wealth and the stagnation of living standards. It is a growing movement across the globe which should give us hope that a different economy is possible and the seeds of it are being grown by progressive municipal governments around the world.

Joe Cullinane is the leader of North Ayrshire Council and Cabinet Member for Community Wealth Building. He is a member of Scottish Labour.

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