The Scottish Government is currently consulting on introducing legislation to support community wealth building (CWB), the aim of which is an approach to economic development which focuses on how the economy can work to increase equality and wellbeing. Many would ask what else the economy should be aiming to achieve. Although this consultation has formally ended, we thought that for this month’s short blog it was worth considering the contradictions between this policy agenda and where wealth or assets exist in Glasgow, especially as Glasgow City Council also appears to have made a commitment to CWB.
Firstly, let’s consider the definition of CWB in more detail. The consultation document describes it so:
“CWB is an approach designed to tackle long-standing economic challenges and transform Scotland’s local and regional economies by considering the ways in which the public sector, in partnership with the private, third and community sectors, can ensure more wealth is generated, circulated and retained in communities and localities.”
“In short, CWB is focused on growing the influence communities have on the economy and ensuring communities receive more of the benefits from the wealth they help to generate.“
CLES, the national organisation for local economies, goes further by citing 5 principles of CWB; Plural ownership of the economy, making financial power work for local places, fair employment and just labour markets, progressive procurement of goods and services and the socially just use of land and property.
Rightly, it assumes that a city’s assets should work for the local population and local institutions and that these should be prioritised rather than those of big business and global institutions. It also implies that there should be greater accountability over these assets. For this to work however, there needs to be full transparency about the wealth of different organisations and how these might be influenced. It is claimed that even apparently poor cities usually have a goldmine of assets that are not known about and are not being well used or developed.
This public wealth, about which there is insufficient public awareness and where it is highly questionable about the extent of its use for CWB, where does it lie in Glasgow? We want to draw attention briefly to three sources of wealth or hidden assets, but there will be many more in order to stimulate more of a debate about their use. These are City Property, the Strathclyde Pension Fund and University reserves.
According to its website, ‘City Property (Glasgow) LLP is wholly owned by Glasgow City Council but is a separate legal entity. City Property is governed by a Strategic Board, which is appointed by the Council and operates in its own name, directly enters into contracts, directly employs staff and keeps separate accounts.’ It has a sister organisation, City Property Glasgow (Investments) LLP which ‘owns one of the most significant commercial property portfolios in the city, extending to around 1800 commercial properties across a range of sectors: including industrial estates, retail units, office space and ground leases.” The total value of these is unknown but are put up for sale, presumably to increase the revenue to Glasgow City Council. There is no public involvement in the decision making about these sales other than through Councillor representation on the Board of the arms length organisation.
CLES argues that pension funds should put in the service of local investment and local priorities. The Strathclyde Pension fund is one of the largest in the UK, covering 12 local authorities of which Glasgow is by far the biggest. It currently has assets of £27 billion with highly contested investments in fossil fuels amongst others. Only 14% of the fund is invested in UK businesses and we can find no record of any substantial investment in the Glasgow area other than a contribution of £45 million to Places for People, itself a private company involved in the social housing market. This comes to 0.17% of the total assets. Decisions affecting the strength of the Fund are however made by Glasgow City Council, the administering authority legally responsible for the Fund and for paying benefits.
Lastly, recent research by the EIS Union as part of their claim for a decent pay rise for University staff has discovered that Universities have considerable reserves which could be used for both pay and the common good. Overall Scottish Universities have combined reserves of £5.8billion with reserves for Glasgow institutions as follows:
|Reserves 2020-21||Reserves 2021-22|
|Glasgow Caledonian University||117,753,000||238,752,000|
|Glasgow School of Art||34,102,000||65,372,000|
|Royal Conservatoire of Scotland||20,491,000||28,482,000|
|University of Glasgow||1,007,997,000||981,800,000|
|University of Strathclyde||342,600,000||219,100,000|
The combined total comes to over £1.5 billion, which could also be used to ensure the five principles of CWB but for which staff and Glasgow residents have little to no say.
We have tried to show with these snapshots that there is a considerable amount of wealth associated with Glasgow. At the same time, Glasgow has the highest relative poverty rate in Scotland according to the recent report from the Joseph Rowntree Foundation. We think that this is a travesty. If you have more information about Glasgow’s hidden assets or views on the contents of this blog, please let us know.