Community Interest Company (CIC) 2.0?

Nearly 20 years ago, the Community Interest Company (CIC) form was introduced to high acclaim and interest for the social economy sector.

Since then, it seems to have struggled to fulfil its potential, based on various datasets which has shown it to:?

• not actually offer any of the unique features it promises;?
• be more reliant on being able to access grants than charities are (despite the fact that nearly all find it highly challenging to be able to apply for/be awarded such funding in the amounts they're seeking);?
• be no more sustainable than private companies;
• and be the most secretive (and therefore least trustworthy) of all the legal form options (with an additional previous post about this here).

And my poking around different data sets in these ways as shared in my blog here, has led me to be invited to write features for both Pioneers Post, and Stir to Action?in recent years.

But I've spotted something recently about CICs in the data about them that makes me wonder if we're about to see a change in how this part of the social economy acts.

One of the data sets I regularly look up are those published by the CIC Regulator (along with those published by the regulators of the other legal forms: Companies House, the Charity Commission, and the FCA). And recently, the CIC Regulator has started reporting on how many of the new CICs that are appearing each year aren't 'new', but are actually existing limited companies who have decided to convert to a CIC.

Over the last 2 years, 50% (yes, half!) of all CICs added to the register have come through this route of an existing private company converting to a CIC.

Frustratingly, it's not clear what the motivations are behind these companies wanting to make the shift to gain a legal status that doesn't offer them anything that they couldn't already have otherwise incorporated within their legal form more easily, and which isn't automatically helping them access any new grant funding opportunities.

But these new data points suggest something seismic may be starting to take place amongst the CIC community - without this rise in interest from already established private companies, the growth in CICs would be in single % figures each year (lower than private companies), rather than the current roughly 20% growth. This means that CICs as a whole are likely to be starting to be increasingly influenced by the practices and thinking of previously private companies - rather than the historic basis of wider local communities applying for this form.?

What this means for how CICs will start to be viewed by the wider sector and others remains to be seen, but with a growing number of CICs being registered that don't have their origin story in how this part of the social enterprise sector has worked for the last 20 years, must surely mean that if this trend continues, we may be seeing the start of CIC 2.0?