CIC – the new Nylon

From the Shetland Isles to the Isles of Scilly, with activity spanning art to zoology, there are nearly 6,000 CICs employing tens of thousands, and a collective turnover in excess of £500 million annually. Whilst big numbers get headlines there is a hell of a lot more going on, I personally think CIC is the new nylon for the social economy. Its versatile and tough, with the country on a war footing financially it will need to be.

So, when the going gets tough where do the tough get going to? Well, in the case of CICs it seems to be to the most deprived areas in the country. For example, 60% of CICs in the West Midlands work in the poorest 20% of wards, with core activities being in health and social care, education and community development. Although the diversity of size, type and activity of CICs is a fundamental positive that brings with it huge promise, it can make it difficult to explain what CIC is really all about collectively. Much of what we have been able to achieve at the Association so far has been on goodwill and I must thank Prof John Shepherd of Birkbeck University for this powerful statistic and his ongoing involvement.

CICs can be not-for- profit, for-profit, co-operative, mutual, employee led, limited by guarantee, limited by share, a PLC. Some can issue golden and preference shares, be volunteer led and pay market salaries. Uniquely it allows individuals to frame their efforts for community change, irrespective of whether that community is local, regional, national or international. Many are far from the finished article but every one of them is a change-maker that UK PLC needs more than ever. CIC is being used by people from all spheres of society, from professionals looking to maintain a social provision,to community groups taking over local assets.

Legislative changes look likely to radically improve things too. Progress on the Social Value Bill to the House of Lords is promising (keep banging the drum people!) and the changes around credit unions are definitely a positive step. For me what is most exciting is what seems to be coming through via the Financial Bill 2012. This Bill really could be the game-changer. I wont discuss the new seed investment relief here other than to mention it is fantastic news, but there were also some clues in the statements put out by Treasury to further changes that really could help herald a new era of social investment.

To keep it short, when describing an exemption for qualifying investments into a 'feed in tariff' activity, they included Co-ops, Ben Comms and CICs. Assuming this is the policy throughout the Finance Bill it would suggest (hopefully) that the exemption under the Financial Promotions Order (FPO) will also be extended to include Ben Comms and CICs. We included it as a recommendation in our submission to the Cabinet Office consultation, 'Supporting a Stronger Civil Society' in Nov 2010, so I'm (potentially) over the moon. I know a few sector heavyweights like Jonathan Jenkins fed into the red tape task force which made it one of six key recommendations and it would complement the new seed investment relief very nicely.

Obviously there are a 1,001 issues, but finance is key and the Association will be increasing our social intermediary activity next year subject to the details of the Finance Bill. This hasn't stopped us collaborating, the most immediate news on that front is that our partnership with Allia is developing well and we hope to have the first CIC approved to use their innovative Charitable Bond in January.

I don't think we've even got started, but with 1,600+ members already we've a good platform to help make 2012 a breakthrough year for CICs. In seven years nylon had a 25% market share, let's get to it!

The very best of health, wealth and happiness for 2012.