The Government Is Thinking About Merging the CIC Regulator Into Companies House — Be Careful What You Wish For

The rumours have been circulating for a while, but they’ve become more persistent this year. The government is considering merging the CIC Regulator’s function into Companies House. The argument is one of efficiency: the CIC register is administered through Companies House anyway, the Regulator’s office is small, and merging would save money.

I understand the logic. I think it’s dangerously wrong.

Companies House is a registry. Its job is to collect and store information. It doesn’t assess the quality of that information. It doesn’t investigate companies that file false returns. It doesn’t enforce standards of behaviour. It’s a filing cabinet with a website.

The CIC Regulator does something different. It assesses whether organisations meet the community interest test. It reviews community interest reports. It has the power to investigate potential abuses of the CIC model. It can apply sanctions, remove directors, and in extreme cases, wind up a CIC. It’s not just a registry. It’s a regulatory body with a specific mandate to protect the integrity of the CIC brand.

Merging that function into Companies House would effectively end proactive CIC regulation. The community interest test would become a box-ticking exercise. The annual report review would become a filing check. The enforcement function would atrophy. The CIC brand, which depends on regulatory credibility, would be devalued.

I’ve been critical of the Regulator’s office in the past. The lack of formal investigations concerns me. The resource constraints are obvious. But the solution isn’t to abolish the function. It’s to resource it properly.

If the government wants to save money on CIC regulation, it’s looking at the wrong problem. The Regulator’s office achieved 152% cost recovery in 2022. It’s not a drain on the public purse. It’s a self-funding regulatory body that delivers value for money.

The merger proposal feels like a solution in search of a problem. The CIC movement has grown to nearly 40,000 organisations. We need more regulation, not less. We need a regulator with the resources to investigate, enforce, and protect the CIC brand. We don’t need to be folded into a registry that wasn’t designed for the task.

The consultation is ongoing. If you’re a CIC director, now is the time to make your voice heard. The future of the model you’ve chosen depends on it.