An economic revolution is underway in Ayrshire that could help rid Scotland of the scourge of poverty – Joe Cullinane and Peter Kelly

In the midst of the pandemic, there is a greater need than ever to use our resources wisely. Here Joe Cullinane, leader of North Ayrshire Council, and Peter Kelly, director of the Poverty Alliance, highlight how Community Wealth Building can help reduce poverty and widen prosperity.
Sunset over Arran as seen from Haylie Brae in Largs, North Ayrshire (Picture: Allan Milligan)Sunset over Arran as seen from Haylie Brae in Largs, North Ayrshire (Picture: Allan Milligan)
Sunset over Arran as seen from Haylie Brae in Largs, North Ayrshire (Picture: Allan Milligan)

That poverty is intrinsically linked with the ways our economy works seems an obvious point to make, but it is true. Given that around one in four children in Scotland lives in poverty, 65 per cent in homes where someone is in paid employment, it is patently obvious that something is wrong with the Scottish economy. One thing we know for sure is that a growing economy with rising employment no longer represents a guarantee of social progress for people, and it certainly doesn’t represent progress for the planet.

As we look ahead, the serious economic impact of coronavirus means we must come together to choose a new approach, one where we redesign our economy to make it work for everyone. ‘Community Wealth Building’ has emerged as an important set of proposals that would begin the process of practically redesigning how our economy works, putting it at the service of people and communities.

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The economic ‘growth’ that has taken place for decades has resulted in massive wealth accumulation for some, but that accumulation has been underpinned by jobs that often fail to provide a real living wage or security. In addition, our extractive model of economic growth has resulted not only in bad jobs but has degraded the environment and decimated communities.

A new approach is needed, one that ends this extractive economic model and builds a new generative one. Communities in North Ayrshire have been at the wrong end of this economic model for too long. That’s why they are now at the forefront of efforts to make Community Wealth Building a reality in Scotland.

What we are talking about is the total reorientation of the economy to redirect wealth and control of the economy away from extraction (of wealth and our natural resources) to local economies and communities. We will do that by using the untapped power of the local state to create a new fairer, inclusive, sustainable and democratic economy. Our experience of the coronavirus response has shown how important that local and national government action can be to saving lives and protecting well-being. Community Wealth Building applies this experience to how we reshape our local economy.

Through the five pillars of Community Wealth Building – procurement, employment, land and assets, financial power and plural ownership – we will re-establish the link between a healthy economy and reducing poverty; reconnect economic strategy with the general principles of social justice; and make work a real route out of poverty.

In Ayrshire £1 billion a year is spent procuring goods and services, that’s £1 billion that can be used to make the transition to a new economy. That means using it to increasingly support the kinds of enterprises that will create good employment and retain wealth in local communities. That means more of that spend reaching co-operatives, social enterprises and worker-owned businesses – forms of business that have a different value set from many for-profit businesses.

Since North Ayrshire launched Scotland’s first Community Wealth Building strategy in May, there has been widespread interest in what is happening. With the Scottish Government also supporting the development of Community Wealth Building in five other locations, it is an idea that is gaining significant traction. With this traction comes the danger that the concept becomes watered down, losing its power to reshape power and wealth in communities across Scotland.

As interest in the concept grows, and as the need for a new direction for our economy becomes more urgent, the need to retain the power of the idea becomes critical. Community Wealth Building has the potential to transform the economy in a way that addresses the deep-rooted deprivation that has plagued so many communities across Scotland for decades. As we face the likelihood of a return to mass unemployment, which will impact communities like those in North Ayrshire that are already suffering, Community Wealth Building can be a central part of the response.

Our challenge now is to scale up what is happening in North Ayrshire to a national level. This will require a fundamental shift in the culture and behaviour of economic development, including how we measure economic performance. The last six months have shown clearly what we value: it is the strength and connections we have in our communities, the safety and well-being of our family and friends, it is decent jobs that are well rewarded. Few people have worried about the latest GDP figures these last six months, even whilst they have been concerned about their jobs, their ability to pay the rent, or their health.

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As we begin to look to the future, we should reflect on what kind of society and economy we want. Community Wealth Building provides us with an opportunity to genuinely build back better, to harness the power of the local economy and to make one that creates decent jobs, reduces poverty and provides genuine prosperity for all.

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