Headlines: April 24th, 2003

The Institute for Public Policy Research warns that Government plans for widespread development of Community Interest Companies could run into difficulties because of their complex structure. In a report ‘In the Public Interest?’ it argues that CI companies are only suitable for specific areas of the public sector.Last month the Department of Trade and Industry announced radical plans to create a new type of ‘community interest’ company, bringing together voluntary sector expertise and private sector entrepreneurialism. They will be designed to 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. It is envisaged that the sort of people who will want to set up such a company will typically be entrepreneurs who want to do good in a form other than a charity. The concept of the CI company was outlined in the report “Private Action, Public Benefit”, published by the Cabinet Office Strategy Unit in September 2002, see www.dti.gov.uk/cics/background

Because of difficult issues such as finance, risk and governance the IPPR believes that CI companies should only be used where: the public interest cannot be secured by a contract eg an NHS foundation trust; where the key aim is to secure greater public involvement eg a local regeneration scheme; for monopoly services eg electricity distribution services and where there is significant public subsidy eg transport.

CI companies that operate under current legislation include a trust that operates 32 leisure centres in partnership with five London Boroughs, a community transport company and a company which sells produce from allotments controlled by residents of an estate.

Consultation on the DTI paper ‘Enterprise for Communities: Proposals for a Community Interest Company’ closes on 18th June 2003.The consultation document can be viewed at www.dti.gov.uk/cics

Link: http://www.ippr.org