Dissolutions Hit Their Lowest Rate Ever — It Turns Out Government Support Works

Here’s a number that deserves more attention than it’s getting. In 2021, only 1,792 CICs were dissolved — 7% of the register. That’s the lowest dissolution rate since the CIC legislation came into force.

Now here’s the uncomfortable question. Is that because CICs have become more resilient, or because government support kept alive organisations that would otherwise have failed?

The honest answer is both.

The COVID-19 support measures — furlough, CBILS, business rate relief, the Coronavirus Community Support Fund — kept many CICs alive that would otherwise have closed. Companies House suspended strike-off actions. The CIC Regulator extended filing deadlines. The message from government was clear: we’re not going to let viable organisations fail because of a temporary crisis.

And it worked. Thousands of CICs that were struggling survived because they had a financial cushion that they’d never had before. The government’s pandemic response was, inadvertently, the most generous CIC support programme ever created.

The lesson is uncomfortable for someone like me who’s spent years arguing that the state should do more for CICs. Because the pandemic proved that when the state does act — when it provides meaningful financial support and regulatory forbearance — the CIC sector doesn’t just survive. It thrives. Dissolutions drop. Formations surge. The whole ecosystem becomes healthier.

The question is whether we can learn from this. The pandemic response was emergency measures, not a permanent change in policy. But it demonstrated that targeted government support for CICs works. It’s not a theoretical debate about whether the state should intervene. We have the evidence now. Support works.

I’m not suggesting that the government should permanently subsidise CICs. But I am suggesting that a modest, permanent support programme — something far smaller than the pandemic measures — could have a disproportionate impact on CIC survival rates and growth.

We have the proof. The 2021 dissolution figures are a case study in what happens when government actually helps. The challenge is making the case for a permanent version of a temporary success.