CIC Association

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Institute of Small Bus. & Entrepreneurship just flagged up some research suggesting worrying trends in CICs...<br /> http://bit.ly/1twtaFj

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Comment by John Mulkerrin on December 3, 2014 at 14:27

Hi Adrian

I agree we need to make sure the best decisions are being made,  having helped hundreds get started I totally agree levels of understanding are low in many cases...but I thought your article title was a little unfair on the wider CIC brand and actual state of affairs so naturally challenged.

Love would indeed be welcome, we've had plenty of fresh air meals at the Association over the years :-)

Comment by Adrian Ashton on December 1, 2014 at 12:14

hi John - apologies for my tawdriness in replying to your question (keep getting sidetracked by life...)

my initial reservations about CICs are, thankfully, being successfully challenged, in that I'm starting to come across examples (some of which I've supported in their gaining this status) where being a CIC offers a tangible benefit to aspects of their business model that no other legal form could offer them (also I've also openly blogged about how happy I am when this has happened) - but my experience to date is sadly that there are still too many adopting this form without understanding all its implications and how it compares against other options (which may be more appropriate in some instances), hence my interest in trying to keep provoking open debate and discussion to help people make more/better informed choices about the ventures and visions they pursue;

and if it's any consolation/assurance, it's not just CICs that I take this view with, but also charities, co-ops, ....

but meanwhile here's hoping to more love and fresh air to help sustain us till next time...

Comment by John Mulkerrin on November 11, 2014 at 14:09

You're very welcome Adrian,  almost all the data cited in my reply is actually public data, apart from the employment numbers which we confirmed in our own survey. Mind you, you only need to pick up stats for larger healthcare CICs and that alone would make my statement accurate.

A bit cheeky to now say figures on the back of a fag packet after launching it as research from an institute! Things will go wrong, but no more than currently happening in Co-op and Charity.

Im just trying to keep the dogma out of it Adrian, these types of blogs previously helped entrench the common view that CIC Shares couldnt be delivered without FCA authorisation................whilst there were other issues with the CIC Share this common held truth is grossly inaccurate and has had a material impact in stunting social entrepreneurial activity............in old terms this is what really gets on my tits!

Aside this particular point, would you say your initial reservations have so far been right or wrong?

best regards

John

Comment by Adrian Ashton on November 6, 2014 at 22:13

thanks for picking up on this John, and I'm sorry if the original post came across as an attempt to do a 'hatchet job'; that certainly wasn't my intention (and hopefully my closing invitation on the original post inviting people to offer an alternative analysis and exploration of the data suggests this, at least in part):

I'd originally picked up on a previous request someone else had made under the Freedom of Information Act to the CIC Regulator about the number, extent, and types of complaints that are being officially made against this legal form. To my reading, the Regulators' published response didn't help me to understand how significant (or not) the numbers of complaints were as they didn't offer a context for them (which I sought to do by rummaging through the regulators' annual reports and doing some cross-sums). I've always used by blog as a 'thinking aloud' space to allow the wider world to see what thought processes are going on in my head as a I start to reflect on, and explore, different ideas and themes in hopes that some (like you!) will help reign me in if I start to lose perspective or make completely unjustified jumps in logic... 

While I've never made any secret of personal reservations about the CIC form, I've always professionally presented it as a valid option with groups I support (there are several CICs in existence today who I supported to be awarded this status, and I'm actually a Director of one myself). I've also always been pleased when a group has been able to highlight to me how the CIC form can allow them to do things in pursuit of their mission that other forms can't (which I've also openly blogged about as well).

However, as you highlight, at the centre of this are some rough 'back of the envelope sums' I did one evening that I chose to put out to the wider world with some of my concerns about what sorts of stories they might be suggesting and propagating which could emerge if left unchecked and 'unrebutted' (which your comment below does) - but I'm also well aware of the work of the Association in working with other sector bodies to develop an initial Governance Code for CICs, and the research currently being led by Cambridge University to explore the potential latent innovation that this form might offer over other structures which will feed into these future narratives about this form.

But perhaps what concerns me about the original post and the concerns I outlined in it, is that despite it being picked up on, and discussed on twitter, by the likes of NCVO, Social Enterprise UK, Unltd, a University, a Foundation, several consultants, and ISBE (!), you're the first to clearly articulate a clear response against the points I raised.

It's also great that you cite the evidences that you do, as such data to contribute to discussions and debates with sector ventures is hard to come by... don't suppose you'd be able to share some of your workings out as well?

But thanks again for posting a much-needed response, I'm glad someone was able to.

Comment by John Mulkerrin on November 6, 2014 at 17:07
I'd agree that the honeymoon may well be over Adrian, but the trending actually speaks more to a future pregnant with ideas and solutions rather than the plateau of prevalence you describe.

This month we go through 10,000 CICs one the register, in less than 10 years it has become a multi-billion part of our economy, employing tens of thousands....approx 1 in 200 new businesses is a CIC....even the figures you quote as worrying are comfortably within wider performance figures of normal company failure rate.

It is a shame your article made no comment of all the other data detailed in the Regulators report (you could have simply said it was your own article making a very oblique point), it is true some birds never fly but should we not lay eggs?

It doesnt stack up Adrian and it seemed like a bad attempt at a hatchet job as the actual story is one of steady and impressive impact, with much still to do alongside everyone else in Civil Society. Happy to debate

John

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