Radical plans to create a new type of ‘community interest’ company, bringing together voluntary sector expertise and private sector entrepreneurialism, have been announced by the Department of Trade and Industry.Secretary of State for Trade and Industry Patricia Hewitt said: “This is about giving power back to local communities. Community Interest Companies will help liberate the entrepreneurial spirit of individuals with public sector values and create new opportunities at local level to provide services where they are needed most. The opportunities created by CICs will be a huge boost to communities in many of the UK’s most deprived areas.”
She added: “The sort of people who will want to set up a CIC will typically be entrepreneurs who want to do good in a form other than a charity. There is no reason why, for example, a group of residents who care about a community transport venture or local environmental improvement scheme shouldn’t actually own it and run it in trust for the wider community.”
The Community Interest Company is a new approach for promoting social enterprise and community development. The planned legislation will overcome many of the barriers to meeting social needs that currently exist in charity and company law.
CICs will be registered as companies in the usual way, but with an additional requirement to show that they are dedicated to the community interest. Investors will not be allowed to skew the priorities of a CIC away from its central pursuit of the community interest.They will report annually to a new independent regulator on progress on delivering for the community and involvement of key stakeholders in their activities. The regulator will have a core responsibility for ensuring that CICs are meeting their public interest obligations.
The consultation document is available at www.dti.gov.uk/cics and the consultation period extends to 18th June 2003.