Q&As

Can councils provide services to a Community Interest Company?

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Published on LexisPSL on 26/10/2016

The following Local Government Q&A provides comprehensive and up to date legal information covering:

  • Can councils provide services to a Community Interest Company?
  • What is a CIC?
  • Can a local authority supply services to a CIC?
  • Local Authorities (Goods and Services) Act 1970
  • Local Government Act 2003

Can councils provide services to a Community Interest Company?

What is a CIC?

A community interest company (CIC) is a corporate vehicle for running a business which wishes to trade for a non-charitable social purpose.

For information on how to form a CIC, what safeguards are in place to ensure that a CIC only uses its assets, income and profits for the benefit of the community, and how CICs are regulated and terminate, see Practice Note: Community interest companies.

Can a local authority supply services to a CIC?

Local Authorities (Goods and Services) Act 1970

Local authorities can trade (and make a profit) with other public bodies in the provision of goods and services by virtue of, and subject to the restrictions in, section 1 of the Local Authorities (Goods and Services) Act 1970 (LA(GS)A 1970).

They may not use their powers under LA(GS)A 1970 to trade with an individual or the private sector—see the section titled Local authority powers to charge and trade — General powers in Practice Note: Local authority powers to charge and trade.

For further information on what is covered by this definition of 'public

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