What is Community Wealth Building? A Practical Guide for Local Economies
16th October 2025
Community wealth building (CWB) has become a familiar term in conversations about inclusive growth and local economic resilience. In the UK, many local authorities and partners are now embedding CWB principles into their strategies—redirecting wealth back into communities, creating good local jobs, and ensuring public money delivers social value close to home.
A New Model for Local Economic Development
Traditional economic development has too often been top-down and developer-led, failing to address persistent inequalities or support locally rooted prosperity. Community wealth building offers a people-centred alternative—placing ownership, control, and benefits in the hands of local people.
Pioneered in the UK by the Centre for Local Economic Strategies (CLES) since 2007, CWB builds on international inspiration such as the Democracy Collaborative’s work in Cleveland, Ohio, and the Mondragon cooperatives in the Basque Country. It draws from the European social democratic tradition, in which the state actively supports public value and fair outcomes for citizens.
In essence, community wealth building responds to the deep challenges of austerity, financialisation, automation, and poverty, focusing on practical ways to make economies fairer and more resilient.
The Five Pillars of Community Wealth Building
1. Plural Ownership of the Economy
The challenge: The UK remains one of the most unequal countries in the world—10% of people own 44% of national wealth, while over a fifth live below the poverty line, even when in work. The wealth created in local economies often leaks out to distant shareholders rather than staying with local people.
The solution: Community wealth building strengthens the connection between wealth creation and those who generate it. This means promoting locally owned or socially minded enterprises that employ, buy, and invest locally—helping wealth “stick” within communities. Models include co-operatives, worker ownership, municipal enterprises, and community-owned businesses—each keeping value local and democratic.
2. Making Financial Power Work for Local Places
The challenge: Mainstream banking operates through global markets, not local economies. Lending to small businesses has declined, and branch closures have weakened community connections.
The solution: CWB encourages local institutions to redirect financial power back into the community through initiatives such as local authority pension fund investment, mutual banks, and regional financial institutions focused on inclusive local growth. These models circulate capital locally, supporting enterprise and social investment while delivering fair returns.
3. Fair Employment and Just Labour Markets
The challenge: Stagnant wages, job insecurity, and the rise of precarious work mean that too many people are struggling despite being in employment.
The solution: Community wealth building promotes fair, inclusive employment practices—living wages, local recruitment, and clear progression routes. Anchor institutions, often the biggest local employers, can play a decisive role by embedding good employment standards and supporting inclusive local labour markets.
4. Progressive Procurement of Goods and Services
The challenge: Public sector contracts are often awarded based primarily on cost, overlooking the wider social, environmental, and economic benefits that procurement can deliver.
The solution: Through progressive procurement, anchor institutions use their spending power to strengthen local supply chains and build ecosystems of SMEs, co-operatives, and social enterprises. This approach retains wealth locally, supports better jobs, and delivers broader community benefits.
5. Socially Productive Use of Land and Property
The challenge: Land ownership in the UK remains highly unequal, with much public land sold off to private interests over the last few decades. This has eroded community benefit and increased inequality.
The solution: CWB promotes land and asset ownership models that generate value for local citizens rather than private investors. This can include Community Land Trusts, Public-Commons Partnerships, and governance models where local people directly manage community assets. The goal is not simply public ownership, but shared stewardship—ensuring that land and property work for the collective good.
Anchor Institutions and Their Role
‘Anchor institutions’ are large, place-based organisations—such as local authorities, NHS trusts, universities, housing associations, and major local employers—whose operations are deeply rooted in their localities. Their scale of employment, purchasing, and landholding gives them significant influence over local economic outcomes.
By embedding community wealth building principles, anchor institutions can drive systemic change, strengthening local economies and supporting inclusive, sustainable prosperity.
Conclusion: The West Midlands Context
In the West Midlands, there is a growing focus on Place—on building local economies that deliver for the people who live and work there. Community wealth building aligns closely with the ambitions of the region’s social economy organisations, which are already creating local employment, reinvesting profits, and managing community assets for public benefit.
By working together—local authorities, anchor institutions, and the social economy—the region can:
• Expand social procurement opportunities;
• Support local ownership and enterprise growth;
• Enable community-led asset development;
• And attract social investment that builds long-term local wealth.
Community wealth building is not just a theory—it’s a practical framework for reshaping how local economies work, ensuring that prosperity is shared, and that wealth truly belongs to the communities that create it.
Learn more via the Community Wealth Building Centre of Excellence | CLES: https://cles.org.uk/
