In its Programme for Government announced in September, one of the Scottish Government’s key commitments was to bring forward a Community Wealth Building (CWB) Bill, which has an objective “to enable greater community and third sector ownership of assets”
Community Wealth Building has five pillars: Progressive procurement, making financial power work for local places, socially just use of land and property, inclusive ownership of local economies and fair and just employment.
To date the main focus of CWB has been on the Procurement pillar and shifting public sector contracting towards more local and progressive procurement policies. However, if the bill is to meet its objective of more community ownership, then the Financial pillar is of equal importance. More fully, this pillar is about increasing investment to communities by harnessing and recirculating the financial resources that already exist within those communities.
CWB could be a real game-changer for social and community enterprises if it mobilises local people to invest locally. At SCF, we call this ‘Citizen Investing’ – ordinary people investing in their communities in return for a small financial return and a big social return.
Citizen investment is an option that offers people within communities the chance to repurpose and redirect a small percentage of their savings into local investment opportunities. Repurposing them from a mainstream bank, where they sit accumulating minimal interest rates, to investment in specific ventures with clear economic and social benefits to their neighbourhoods.
The capital raised could then be used for a variety of local purposes including investing in solar projects, high street regeneration, theatre expansion and redevelopment, new builds, building and land purchases and even ‘bespoke’ loan funds that can lend to start-ups and SMEs within distinct communities.
In the process transforming savings from a ‘passive’ to an ‘active’ state by financing social and community organisations. By doing so, assisting them to bring to life ambitions to make their communities more vibrant, resilient and sustainable.
Although a relatively new concept, Scotland has already started on a journey towards becoming a nation of citizen investors, as the growing use of Community Bonds and Community Shares demonstrates.
Ultimately, citizen investment is about making sure that savings circulate in our communities bringing maximum mutual benefit and bolstering the local ‘real’ economy where most of us live and work.
It is an approach that reflects the increasing focus on communities themselves as ‘Agents of Change’ and by extension a willingness to invest in their own future development.
The concept of CWB is one that prioritises neighbourhoods. It’s a strategy that ensures that local residents are the beneficiaries of the economic activity that happens in their vicinity. Citizen investing is a crucial part of that model. Realising local financing, in particular for social and community enterprises which are an essential part in the revitalisation of communities, whilst also giving local people a return on their investment.
Pauline Hinchion, Director, Scottish Communities Finance Ltd