The new Scottish policy framework seeks to maximise economic benefits for local communities

09 May 23

The goal is to create economic systems that are more resilient, equitable, and democratic, with local communities having more control over their economic futures.


Community wealth building is a strategy for local economic development that aims to build long-term, sustainable wealth for communities (as the name suggests). This is done by promoting the growth of local businesses, creating well-paying jobs and working with local community groups.

The difference is more pronounced when compared to a more ‘traditional’ approach to economic development. This is because it involves a shift away from a focus on attracting outside or inward investment and big corporations to an area. Instead, community wealth building emphasizes the importance of nurturing local businesses, encouraging employee ownership and cooperative models, and investing in community assets such as housing, public transportation, and infrastructure.

The goal is to create economic systems that are more resilient, equitable, and democratic, with local communities having more control over their economic futures. To achieve this, there are many levers a business or institution can pull, typically these are summarised by five pillars[1] :

  1. Plural ownership of the economy
  2. Making financial power work for local places
  3. Fair employment and just labour markets
  4. Progressive procurement of goods and services
  5. Socially productive use of land and property

Looking at the practical implications, if you’re submitting a planning application in Scotland, community wealth building really matters. The newly adopted National Planning Framework 4 (NPF4) states “development proposals which contribute to local or regional community wealth building strategies and are consistent with local economic priorities will be supported”.

Before the adoption of NPF4 community wealth building was piloted by five local authorities: Clackmannanshire, Fife, Glasgow City Region, South of Scotland and Western Isles. Following the trail, each pilot area developed action plans focusing on:

  • Growing local supply chains.
  • Supporting the creation of good fair work opportunities for local people.
  • Promoting the Real Living Wage and wider fair work objectives.
  • Bringing vacant and derelict land to more productive use.
  • Using land as a tool to achieve net zero.
  • Maximising the community benefits associated with procurement and developing local supply chains.
  • Supporting local firms to take part in public procurement contracts. 

North Ayrshire is Scotland’s first community wealth building council and is a good example to demonstrate an alternative way to economic development. The Council has pushed forward with a range of initiatives including developing its own solar farm and wind turbines which could make North Ayrshire Council a net exporter of excess renewable energy[2]. In addition, the renewable energy program is in municipal ownership meaning that the income generated can be reinvested in North Ayrshire.

In England, whilst not yet a planning policy requirement yet, applying community wealth building principles to development proposals can help to articulate to councils how development will be embedded into their localities and can be considered in the planning balance. It can show how communities will benefit from developments by creating well-paying jobs for local people, supporting local businesses, improving access to services and amenities, and investing in community assets such as parks. Ultimately, community wealth building helps make development more palatable to local communities by understanding that the development’s benefits will remain local.

In summary, community wealth building is a powerful tool for building more inclusive, resilient, and sustainable local economies, and can help to address some of the key economic and social challenges facing societies today.

Please get in touch with Iceni if you like to help demonstrate your scheme’s compliance with community wealth building.

[1] Centre for Local Economic Strategies (2023) The Principles of Community Wealth Building

[2] North Ayrshire Council (2023) Council reveal latest green drive