Ministers back new CIC scheme

EVIDENCE of the Government&#039s commitment to social enterprise was provided recently when three Cabinet Ministers shared the platform at the Enterprise for Communities conference at London&#039s Barbican Centre....

EVIDENCE of the Government&#039s commitment to social enterprise was provided recently when three Cabinet Ministers shared the platform at the Enterprise for Communities conference at London&#039s 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 &#163 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&#039s 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 &#039great&#039 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 &#163 2.7 million Adventure Capital Fund designed to address the &#039equity gap&#039 faced by social enterprises.

In particular, he highlighted the work of the Community Ventures initiative in Middlesbrough (awarded &#163 250,000) and Bradford&#039s Action for Business (awarded &#163 300,000).

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