Community Interest Companies

This is achieved by a “community interest test” and “asset lock”, which ensure that the CIC is established for community purposes and the assets and profits are dedicated to these purposes. Registration of a company as a CIC has to be approved by the Regulator who also has a continuing monitoring and enforcement role.

NextGenUs are registered as a Community Interest Company and are listed on the CIC Regulators Register

Find out more about why we chose the Community Interest Company approach.

When setting up NextGenUs, we wanted to set ourselves apart from the competition in many ways. One of them was the way we setup the company.

In the UK, we tried nationalised telecommunications when the incumbent operator was the General Post Office (GPO). While customer focused, there was a lack of innovation. Following the privatisation of the General Post Office and BT being formed, we started to get innovation but customer focus slowly eroded.

Thanks to legislation in the middle of this decade, we now have a third way – Community Interest Companies (CICs). This new type of company combines the best parts of nationalised companies (customer focus) with the best parts of private sector companies (finance and innovation).

A Community Interest Company is different from a standard private company in that the main focus is the communities it serves rather than shareholders. This is done through the two requirements of a CIC :-

65% of any profits made must be reinvested in the community that created the surplus.

All assets of a CIC can only be transferred to other CICs. This stops the assets being sold to the highest bidder a few years after the network is built.

NextGenUs is currently the only national CIC. Generally, CICs are serving a specific small area compared with NextGenUs who operate right over the country. To keep things local, we wrote into our Memorandum of Association (the fundamental document that governs a company’s dealings with the outside world) that we use the existing parish structure to define an area. When we deploy a solution in a parish, we section out our accounting for that parish so that we can determine when it turns a profit (generally 5-7 years after installation of a network) and what profits it is making.

At the end of each year, we will advise the parish as to what surplus has been generated and the amount available for either reinvestment in the network or for distribution as the parish council sees fit. The decision is then fully up to the parish how they spend the 65% of profits either accepting our proposals combined with local projects (the village hall, a community play area, etc) or spending it all on local projects. This community reinvestment gives a sustainable revenue stream to each parish we deploy in.

The way we work as a Community Interest Company is a good example of coalition Government’s Big Society policy devised by the Conservative party because of the way we engage with people at a local level to give them a fast and future proofed solution that they helped install (by digging the trench along their property, etc) and then giving them control of how profits are spent. Our CIC could easily be the largest example of Big Society in a few years time.

Because of us building monopoly networks, protection needs to be in place to stop this being abused. The CIC regulator is very good at doing this as they make decisions on a neutral basis (ie not technology specific where many think OFCOM fail). They basically ask is the CIC serving the communities it works with well. For NextGenUs specifically, this is basically about asking are we providing a service people are happy with. Anybody can lodge a complaint with the CIC regulator at any time which they will investigate.