EVIDENCE of the Government's commitment to social enterprise was provided recently when three Cabinet Ministers shared the platform at the Enterprise for Communities conference at London's Barbican Centre.
The Chancellor of the Exchequer, Gordon Brown, Home Secretary David Blunkett and Secretary of State for Trade and Industry Patricia Hewitt backed the launch of a three-month consultation period into the setting up of the Community Interest Company (CIC).
This is a new type of company designed for social enterprises that want to use their profits and assets for the public good. To qualify as a CIC, it is proposed that companies will need to pass a community interest test and submit annual reports to an independent regulator. An asset lock will stop CICs from distributing their assets or profits to members.
Patricia Hewitt said that the new structure aimed to combine `the idealism of the voluntary sector with the entrepreneurialism and commercial acumen of the private business sector.`
Ms Hewitt also announced the accreditation of 11 Community Development Finance Initiatives (CDFIs), able to raise £ 35 million over the next three years to lend on to social enterprises. These CDFIs included the London Rebuilding Society, the Aston Reinvestment Trust and Prime.
Gordon Brown praised the dedication of those working in the social enterprise sector – a sector he said that was making a difference in communities across the UK , including some of its most deprived areas.
CICs, he said, were not intended to deliver public services but would work alongside the public and private sectors to deliver a range of services – from childcare and social housing to leisure and community transport.
The Chancellor, a patron of the Co-operative Party's think tank, Mutuo, said that 2,000 locations across the country were now designated as enterprise areas and the Government is keen to see social enterprises taking up opportunities in these areas.
He added that community investment tax relief would cut the cost of investing in these areas; stamp duty had been abolished in them and he hinted that further support for these areas may be announced in the budget.
Mr Blunkett said CICs were another example of the continuing `reshaping of the relationship between government and people – about what government can do as enablers and what communities themselves can do as part of the solution.`
He pointed out that CICs built on the success of the 'great' mutual and co-operative enterprises that had `survived through thick and thin`, adding that CICs were `not a replacement for anything, but part of a jigsaw giving people the opportunity to develop and expand.`
Mr Blunkett announced the first ten recipients of funding from a new £ 2.7 million Adventure Capital Fund designed to address the 'equity gap' faced by social enterprises.
In particular, he highlighted the work of the Community Ventures initiative in Middlesbrough (awarded £ 250,000) and Bradford's Action for Business (awarded £ 300,000).
In this article
- Barbican Centre
- Chancellor of the Exchequer
- Community development financial institution
- Community interest company
- David Blunkett
- Gordon Brown
- home secretary
- Parliament of the United Kingdom
- Patricia Hewitt
- Politics of the United Kingdom
- Secretary of State
- Social economy
- Social Issues
- Transaction processing
- Types of companies
- United Kingdom company law