CIC Share Issues...
Mark Johnson has written an excellent and important piece on community share issues by CICs that deserves to be widely read by people involved in Share CICs. It is very much in line with discussions I've had with the CIC Association - John Mulkerrin in particular.
One point - the view we have developed is that the route Mark suggests of proving common interest through membership of an unlimited company is not necessary in circumstances such as community shops and pubs - because the purpose (of the CIC and the finance) is already held in common.
Here's a bit of our own (draft) guidance...
A common interest group is an identified group of people who have an interest in common with each other in the affairs of the company and in what is done with the proceeds arising from any investment they make. It does not include people linked together and with the CIC only by virtue of normal business relationships – so your customers, for example, do not constitute a common interest group for these purposes simply by virtue of being customers, but a local community investing to save a vital local facility such as a village shop or pub, probably would be regarded as a common interest group.
Geof Cox Associates links with NDTi...
Geof Cox has been made an associate member of the National Development Team for Inclusion.
NDTi is a not-for-profit organisation promoting equality for people who risk exclusion and who need support to lead a full life - especially because of issues around age, youth, disability and mental health.
Geof Cox will of course be advising on the role social enterprise can play in this work, especially in NDTi's current focus on Community Led Social Work.
CIC Regulator to step down...
Sara Burgess will be stepping down from her role as CIC Regulator in September.
Sara has been an excellent Regulator, coming from a third sector background and bringing with her not only understanding but commitment to the sector, and always willing to visit and speak at local CIC events, however modest. I am concerned that we won't get such quality again, especially as the CIC Regulator role is now to be combined with the position of Director of Corporate Strategy at Companies House. I do hope we don't see Sara's achievements eroded by faceless managerialism.
One thing we can do about this danger, of course, is urge passionate people running CICs now to apply for the Regulator position.
More details of the post and the application process can be found here.
CARe Europe Conference...
Social enterprise will be a central theme of the 3rd CARe Europe Conference in Prague, Czech Republic 17 - 18 June, 2015.
Geof Cox will be the keynote speaker on social enterprise and social inclusion, and will also lead a workshop session on 'How to set up a social enterprise for health and social inclusion'.
For people in the UK interested in social enterprise in health and social care this looks like one of the best conferences to come this year - it will be conducted mainly in English, and there is a lot of international interest in the UK experience - but equally there will be crucial insights from CARe network members from throughout Europe. ... and Prague is very easy and cheap to get to and stay, compared with most other European cities (including London!).
The other keynote speaker is also English - Julie Repper is head of Recovery at Nottinghamshire Healthcare Trust, Associate Professor of Recovery at the University of Nottingham, Senior Consultant at the ImROC programme, and author of many books, including Social Inclusion & Recovery: A Model for Mental Health Practice.
You can download the Conference Programme in English here.
Social enterprise and the new Care Act...
I'm not sure how widely it's known in social enterprise circles that buried in the new UK Care Act (2014, coming into force April 2015) is the extension of the power to all local authorities to delegate most statutory care and support functions to independent providers. This 'delegation' power is in addition to the established option of commissioning non-statutory care provision.
It follows the adult social care social work practice pilots which since 2011 have enabled a few local authorities to see if 'externalising' core social work activity can improve services. I've been involved in a number of these that have led to very successful social enterprise development – for example People 2 People CIC, a social worker owned and run service in Shropshire.
Some experts in the care field forsee this movement gathering pace, particularly in view of the push to integrate social care with health. It's important that social enterprise developers get involved – we may not be aware of it, but there are very different cultures in social work and health that can make working for an NHS-dominated organisation unattractive. Many social workers will see a social work social enterprise that empowers both social workers and service users as preferable to their likely future alternatives.
The definitive social enterprise course...
York CVS have joined with Social Enterprise Europe to put on the definitive social enterprise management course.
The course will run from late February to early July 2015, in 6 2-day modules covering the essential differences between social enterprise and conventional organisational development and managment - you can opt to do the whole course, or any of the modules individually.
The venue in York is easy to get to - 2 hours by train from London or Birmingham, an hour from Newcastle, and less than half an hour from Leeds - and of course it's also one of the most beautiful cities in the world to stay over for that all-important post-course networking!
Co-operative Societies & Community Benefit Societies...
Useful outline of the current changes to Industrial & Provident Society law by my friend Simon Lee, including the dropping of the Victorian 'Industrial & Provident Society' in favour simply of 'Co-operative' and 'Community Benefit' Societies.
Social impact measurement for EU legislation...
A potentially very influential set of proposals on approaches to social impact measurement in European Commission legislation has been released by GECES (Groupe d'experts de la Commission sur l'entrepreneuriat social). Download here.
New EU social enterprise procurement promise...
Shadow social enterprise minister Chi Onwurah has promised exclusive public sector contracts for 'not-for-profit' bodies.
The Labour initiative is enabled by the January 2014 EU Public Sector Procurement Directive - which was in fact driven in part by the UK Coalition Government’s own 'public sector mutuals' initiative. Among other possibilities, the new rules mean that public sector bodies can award contracts to newly established public sector mutuals (or social enterprises) without competition.
Public sector services were previously categorised as Part A or Part B services, with Part B services exempt from the full EU public procurement regulations. This distinction has now been abolished, which means that all public sector contracts over the new higher de minimis threshold of 750,000€ must be advertised, but a new ‘light touch’ regulatory framework has been introduced for most of the services social enterprise undertakes, including health and social services, prison services, leisure, arts and culture.
Probably most importantly, the Directive also creates a new category of ‘reserved contracts’ for certain types of services, again including health, social and cultural services. These contracts can be reserved to particular types of organisations, which
- have as their main purpose the pursuit of a public service mission linked to the delivery of the reserved service
- reinvest surpluses to forward this purpose
- are employee-owned or organised on participatory principles, and
- have not been awarded a reserved contract within the last 3 years.
The term of the contract also cannot exceed 3 years - so we are talking here not about an indefinite exemption from competitive tendering, but a period of exclusivity to enable new social enterprise to get into public contracts.
Update: the January 2014 EU Public Sector Procurement Directive is now in force (from 26th February 2015)
Great look into the implications of the proposed new social investment rules for charities...
What will a statutory power of social investment mean for charities?
NHS to create 'open source' CICs...
NHS England is looking to create a series of community interest companies to act as custodians for open source products introduced to the NHS. Full story here!
Balance in the news again...
We've just heard that Balance, a service transformation that came out of Social Firms UK / Geof Cox Associates' work with the Royal Borough of Kingston, has now been successful in securing the Learning Disability provider services in Kingston through an open tender exercise.
This will mean a big expansion for what was formerly the Kingston Council Workstart & Asperger Syndrome Service, now a unique social enterprise joint venture between the local staff and Pure Innovations - which itself came out of Stockport Council several years ago, and which already runs learning disability services in the North West and elsewhere.
At the time of the spin out Geof Cox commented that he was "particularly proud of this service transformation because it provides an important model for small teams that want to take control of their own destiny, but might struggle to meet ongoing public sector pension costs without the support of a larger partner organisation". Now the robustness of this joint venture model is becoming evident, with about 5 times the current staff numbers set to transfer into Balance in June.
New EU procurement rules to favour social enterprise...
The European Parliament has approved a new set of procurement rules which are expected to come into force in the UK by mid-2014.
They include measures to encourage public sector commissioners to break up procurement into smaller contracts and to give more regard to social value when tendering out contracts.
Most importantly for public service transformations to social enterprise, they will create a protected period for social enterprise spin-outs during which they will not have to compete with other bidders.
CIC Regulator recommends removal of individual dividend caps...
Following the recent consultation on social investment tax relief, the CIC Regulator has recommended that the maximum dividend per share cap should be removed, but the maximum aggregate dividend cap retained at 35%.
This development has enormous significance for the realisation of 'sweat equity' for social entrepreneurs from poorer backgrounds, who invest time but have no money behind them - widely seen as a key problem with the CIC form with regard to social justice, and pointed out in the original and subsequent consultations in responses written by Geof Cox Associates, for example for Social Firms UK.
It also removes the technical anomaly cramping the transaction market for CIC Shares - that the link to original sum invested inevitably led investors to prefer new to existing shares.
The Regulator has also recommended that the maximum rate for performance related interest should be increased from 10% to 20%.
Word on the streets is that the recommendations will be implemented around October, and will be retrospective (ie. apply to all shares, not just new shares).
The CIC Regulator will be running a workshop at the NCVO offices in London on the morning of Tuesday 4 March 2014. If you are interested in attending can please contact firstname.lastname@example.org by Friday 31 January. I would advise that you contact her as soon as possible as places will be limited and they will be allocated on a first come first served basis.
The amendments are tabled for Parliamentary Business 21 July at 3pm - Grand Committee, House of Lords.
What will social enterprise look like in Europe by 2020?
The British Council has published an interesting new vision of the future of social enterprise.
"There may well not be a recognisable ‘social enterprise sector’ by 2020. Certainly any attempts to confine social enterprise to specific legal structures or models of governance will have ceased. But the concepts and ideals of social enterprise will be spreading rapidly into all corners of society, becoming mainstream. All organisations, whatever their ownership model, will be judged on a spectrum of social impact."
Big Lottery to launch new community enterprise fund...
The Big Lottery is to launch a new £150million fund in 2014 specifically targeted at community-led enterprises and kick starting community action across England. The big question is whether Share Community Interest Companies will be elegible for funding - they are currently excluded from some Big Lottery funds, but from the information released to date it looks as though they will be able to apply to the new fund.
Download Big Lottery's initial briefing on the new fund here.
Seminars for social enterprise advisers in North East England...
Are you an adviser called on to help set up or grow social enterprise? - and would you like to improve your ability to find the optimal organisational structure for your clients?
Geof Cox Associates ran seminars in North East England in early December on behalf of the North East Social Enterprise Partnership, aimed at developing a network and resources to embed organisational structure development expertise in the social enterprise support infrastructure in the region. The Newcastle and Gateshead event were both over-subscribed, so we hope to repeat them in 2014.
Seminar 1 – developing your ability to find the optimal organisational structure - Darlington on 2 December 2013 (Teesside University (Darlington Campus), and Newcastle on 4 December (The Beacon, Westgate Road, Newcastle) - buffet Lunch at 12noon followed by a working afternoon, finish by 5pm.
This seminar explored the knowledge and resources required to give excellent advice on structuring and restructuring social enterprise and explained NESEP's plans for a sustainable expert network.
Seminar 2 – community share issues, how and why? - 3 December 2013 in Gateshead (Gateshead Advice Centre) - buffet Lunch at 12noon followed by a working afternoon, finish by 4pm.
Although aimed primarily at advisors, this seminar was open to anyone interested in financing social enterprise by raising money from the public. It was led by Dave Hollings, whose consultancy, CMS, advised on the renowned community buyout of the UK’s first co-operative pub, the Old Crown at Hesket Newmarket, and went on to advise a number of other community buy-outs and social enterprise start-ups financed by share issues, and also by Geof Cox, who outlined his work with the CIC Association on guidance and model documentation to enable Community Interest Companies to more easily raise share investment from their 'community of interest'.
— Geof Cox (@GeofCox) November 18, 2013
— NESEP (@team_at_NESEP) November 19, 2013
miEnterprise Herefordshire wins RBS Inspiring Enterprise award...
miEnterprise Herefordshire was one of only 10 winners - out of 200 applicants - of RBS funding for its project with disabled students at its local special school.
More details here!
self-employment, self-management, and new notions of work...
I promised at this event to post here the sources of the statisitcs I used in my speech:
- the total number of social enterprises in the UK is 688,000
- the sector employs more than 2 million people, including half a million sole traders
- social enterprises are estimated to have total annual incomes of £163 billion a year
- all of these figures are from the May 2013 UK Cabinet Office paper Social Enterprise: Market Trends
- 1 in 3 of of all businesses in development want to be social enterprises
- from Dr Rebecca Harding's research for Delta Economics Social Entrepreneurship in the UK 2008 - also the conclusion of research for UnLtd the same year
- 1 in 3 entrepreneurs have primarily social motives
- Global Entrepreneurship Monitor United Kingdom 2004, also by Dr Harding
- the figure that 1 in 3 MBA students do not put profit at the top of their priorities is taken from the work of Dr Rory Ridley-Duff - who is currently looking for the original research source for me
- over half of the income of UK NGOs is earned income (over ¾ in some regions)
- The Economic Contribution of Voluntary Organisations, NCVO, November 2012
- 45% of registered charities currently identify themselves as social enterprises and 92% want to increase earned income
- 2013 paper by Social Enterprise UK
- the growth rate in the numbers of Community Interest Companies in the UK is exponential
- Regulator of Community Interest Companies Annual Report 2011/2012
- all of the figures on the growth of micro-businesses and decline of large firms in the UK were taken from the current UK Government Department for Business, Innovation & Skills Annual Business Population Estimates
- the quotation from Simon Wicks - "The major business trend of the last few years is the regeneration of the cottage industry economic model" - is from the Enterprise Nation website which he edits.
— Supermarkt Berlin (@super_markt) October 19, 2013
self-employment, self-management, and new notions of work...
3-day Symposium, October 18-20 2013, Berlin more details here
Geof Cox was a keynote speaker at this event, considering the relationship between social enterprise, self-employment and new notions of work.
For many reasons, including the increasing complexity of both machines and societies, there is ever greater demand for individual expertise, and at the same time the potential, via the internet, for experts to work together in 'collaborative communities', or in networked organisations (what might be called 'dis-organisations'). These are among the factors driving the growth of self-employment and decline in the numbers of large firms. The future is micro!
Social enterprise has embraced these trends, and is developing new organisational structures that enable these new ways of working, and which might, in the long run, out-compete firm-based organisational models. It works alongside environmentalism, because it respects equally the local and the global, rather than working at the level of the national or multi-national.
Is this actually how capitalism concludes? - not with revolution or planned economy, but back to the future of a technologically enabled artisanal market?
Big Society Capital's Response to the Social Investment Tax Relief Consultation...
Download here. Probably the most important section is on the CIC Dividend and Interest Caps, p.17-20.
Read more on 2013 and other not-so-recent stories in the News archive