Diggers repairing flood damage in Glenridding

Community Interest Companies-could this be an opportunity for you?

Community Interest Companies

A Community Interest Company is a company that has a benefit to the community. A community interest company (CIC) is a type of company introduced by the United Kingdom government in 2005 under the Companies (Audit, Investigations and Community Enterprise) Act 2004, designed for social enterprises that want to use their profits and assets for the public good.

A CIC can employ staff and pay wages, but profits are reinvested in the community.

Legal Structure of a CIC

An accountant will help you to set a CIC up. One model is to have one director and five members, although it is usually advisable to have at least two and possibly three directors. You should always seek professional advice and help in setting up your company. There are a variety of different business models you could choose.

A CIC can be limited by guarantee, this is a distinct legal entity from its owners, and is responsible for its own debts. The personal finances of the company’s guarantors are protected. They will only be responsible for paying company debts up to the amount of their guarantees (often £1).

How CICs benefit communities

If you have an idea that you would like to take forward in your community, being a Community Interest Company will allow you to access grant funding from various organisations, such as the Lake District Foundation.

Being a CIC will also give you the opportunity to work with organisations that support community organisations, such as Natural England and the Environment Agency. It may be easier to build links with government organisations such as the Lake District National Park Authority, it makes communication easier between the organisations and the community. Community driven projects often carry more weight when it comes to grant funding and getting your ideas heard.

Being a CIC gives you the opportunity to work with multiple partners at once and generate match funding- your projects may be funded by more than one organisation in order to make up the required money. Having a legal structure to your company gives organisations the confidence to invest in your community.

The CIC can become the focal point of the community, communications can become easier. It can help a community come together such as through volunteer days, you may build a stronger community through the CIC. In a CIC the work is driven from the grass roots community, it is not driven by outside organisations. It is very relevant to your local community.

Having a CIC can allow you to facilitate community ideas, and find ways of funding them. The CIC can look at a whole range of funding sources and consider various options rather than starting with grants for specific things.

Running a CIC

A successful CIC requires hard work, some of which will be unpaid. You need to be genuinely committed your community before you set up a CIC.

As a CIC you will never please all of the people all of the time, so you may have to receive complaints from other community members. You may need to reassure people that you have properly though through your ideas. Make sure that you have consulted experts and appropriate bodies before launching your schemes or you may leave yourself open to criticism. Make sure that you properly consult your community and consider all feedback.

Make sure that you properly consider all rules and regulations before starting your projects, think about whether you will need planning permission. Your knowledge will improve as you go along. For example if you wanted to plant trees, make sure that you consult with the Forestry Commission and the Lake District National Park Authority. They will tell you who else you need to consult. This is to ensure that the tree planting is in an appropriate place.

Bear in mind that you will need time to build up relationships and your own knowledge. Projects often take many years to come to fruition. It is a long term project building a CIC.

Make sure that you investigate whether you need public liability insurance, and what risk assessments you may need, particularly if you are hosting volunteer days.

Work Commitment

This will depend on the projects you identify. It may take you a while to set your company up. Find out how much your accountant will charge you to set the company up before you begin the process.

Try to ask for help whenever you can. You can save a lot of time by asking for help from relevant organisations, it is not a weakness to ask for help!

Case Study: Ullswater Catchment Management CIC

Ullswater CIC was established after the Storms of 2015 caused huge damage to the Ullswater area. Homes and businesses were flooded, livestock drowned and much farm infrastructure destroyed.

The CIC was set up to look into ways that we could build a more flood resilient catchment by working with our farming community and landowners. Examples of this work have been looking into upland water storage to temporarily store flood water to be released slowly, to running soil analysis programs to improve soil health, to tree and hedge planting.

We have formed good working relationships with The Environment Agency, Natural England, The Woodland Trust, The National Trust, Farmer Network, The Lake District National Park and local Rivers Trusts.

Normally, we have landowners or farmers approach us and enquire about a project or idea that they have, we then liaise with the most appropriate organisation to ensure that the work is completed correctly but efficiently. We only use local workforce to ensure that any funding is kept in the local economy. This approach seems to work well for us and the community, it gives the farmers and organisations one point of contact.

Our work is very focussed on working with our farming community. We strongly believe it is possible to combine conservation, natural flood management and carbon sequestration into a working and sustainable farm business. The success of this approach lies with the fact that we work up ideas and designs that include the landowner right from the beginning to ensure that they are happy with what is being done.

We are currently working on a project to plant and restore as many of our hedgerows as possible throughout the area. There are many benefits to hedgerows, they provide shelter and food for birds and insects, provide shelter for livestock in poor weather, they help improve soil health with the leaf matter and root system. To date we have been lucky enough to receive funding from The Woodland Trust, The Lake District Foundation and a successful crowd funding appeal. By having a grant it enables the work to be completed much swifter and with less bureaucracy than using the Countryside Stewardship application process.