§ The Secretary of State for Trade and Industry (Ms Patricia Hewitt)I announced in a written ministerial statement to the House on 26 March 2003,Official Report, column 14WS, that a joint DTI/Home Office&/Treasury consultation document on proposals for a community interest company (CIC) was being published. The consultation document set out proposals for a new type of company, not for profit, and working for the public benefit.
I am today publishing a report on the outcome of the consultation. The consultation ended on 18 June and the Government received over 130 formal responses. The overall reaction to the consultation has been extremely positive, with the concept of the CIC receiving widespread support. This is consistent with the response to the outline proposal on CICs in the Cabinet Office Strategy Unit report of September 2002 "Private Action, Public Benefit". Respondents suggested that this new type of company, with the features proposed, could potentially benefit a range of organisations, particularly those looking to work for community benefit within the relative freedom of the non charitable form, but with a clear assurance of not for profit status.
The Government are encouraged by the confirmation of strong support for the CIC concept which this consultation demonstrated. As I announced in July 2003, we intend to proceed with legislation on CICs as soon as Parliamentary time allows.
In the light of the responses to the consultation, and further consideration of the technical issues, the Government intend that the key features of the CIC will be largely as proposed in the March 2003 consultation paper. However, we intend to clarify and in some respects amend the detail of the proposals, as described in the report. In view of the responses on stakeholder consultation, we do not propose that there should be a statutory requirement for CICs to carry out such consultation.
41WSNonetheless, there will be a strong presumption that CICs should take steps to engage their stakeholders where appropriate. As the consultation paper suggested, there will be a requirement on CICs to report annually on what has been done to involve stakeholders and this will be supported by guidance on good practice. We also intend that the CICs should report to stakeholders on key issues such as directors' remuneration.
Copies of the report on the public consultation and the Government's intentions are available in the Libraries of both Houses and on the DTI website.