Should social enterprise be regulated like other forms of business?

MOTIV CIC as seen on the new CIC website

That was the question I was asked yesterday as I spoke to the Local and National Regulators conference at the Department of Business Innovation and Skills (BIS). Delegates were regulators, not a natural audience for the subject of social enterprise you may think, but an important one in my view. It was interesting that as soon as I and my fellow speaker Sara Burgess, the community interest company (CIC) regulator, had finished speaking, that was the first question. I responded that yes they should be regulated the same, I can't imagine a world where social enterprises are treated differently and still taken seriously, but then I went on to ask about the motivation for the question. A discussion ensued and it seems that many regulators, at least those there, felt under political pressure to give social enterprise an easier ride.

I have no idea how this manifests itself or indeed if it actually true, but as a perception it is worrying. I pointed out that in my experience social enterprises feel highly regulated and that they often tell me of their struggles to be trusted and understood by regulatory authorities in areas such as planning, finance and health and safety. It seems to me that in fact social enterprises are being treated exactly the same as ordinary SMEs but that when very challenging regulatory issues arise, the valuable work they do for a wide community comes to the fore, potentially turning a process-based problem into a political one.

I know from my members how hard it is to comply with all statutory requirements, not least because small businesses don't get a how-to pack only a what-you-did-wrong notice. I also know we all have to play by the rules, but as our community matures - and hearing from Sara that the numbers of CICs were up to 5,800 was great news - and the business focus of what we do becomes more widely understood, I hope any sense from regulators that we are looking for special treatment will give way to a more considered view. To be fair, many of my audience at BIS made it clear they already have a lot of time for social enterprise and in fact the regulator who asked the killer question turned out to be a keen board member of his local allotment society. So over tea, talk of health and safety quickly gave way to an animated and hilarious discussion about the politics of fox control.

CICs – interested?

I am joining a panel at 1pm live on the Guardian Social Enterprise Network website to discuss Community Interest Companies (CICs). I think CICs are great – well I would, we are one – but I also think that a great deal of confusion exists around the structure and its applicability, so I welcome the debate.

In keeping with so much in the social enterprise world, it's horses for courses. Sometimes CICs are spot on, sometimes other types of company structure are called for, it depends on what you want to do and how you are going to operate. I hope I can shed some light on the subject, I shall certainly be reflecting the thoughts of SEL members, many of whom were early adopters of the CIC.

If you want to join in the link is here.