Proposal to merge Community Interest Companies regulator with Companies House in 'bonfire of quangos'

The Office of the Regulator of Community Interest Companies (CICs) is the latest quango targeted by the government's efforts to cut the cost of regulation and boost economic growth.

CICs are limited companies with a primary purpose of benefitting the community rather than making a profit.

Set up in 2005, the Office of the Regulator of Community Interest Companies is responsible for deciding whether an organisation is eligible to become, or continue to be, a CIC, investigating complaints and providing help to people setting up CICs. There are currently almost 37,000 CICs.

In a policy paper on a "new approach to ensure regulators and regulation support growth", the government said it will merge the office with Companies House as part of a commitment to cut administrative costs for businesses by 25% by the end of the Parliament.

The paper said:

"The current regulatory landscape is not functioning as effectively as it should. Our system now too often holds back growth and inhibits private sector investment. Whilst countries such as Singapore and Australia have continued to improve their regulatory systems, the UK has fallen behind.

"One of the clearest manifestations of this is the high associated administrative costs for businesses arising from activities such as filling out forms or from overly onerous and disproportionate reporting requirements.

"We cannot let this continue. Now is the time for reform: to ensure the UK regains its global competitive leadership. We need to go further and faster to secure and sustain growth, supporting the objectives of our new industrial strategy and the wider growth mission."

Other actions include:

• reviewing the performance of the Groceries Code Adjudicator and the Pubs Code Adjudicator.

• reviewing the British Hallmarking Council, including options to merge, abolish or reform it.

• merging the Payment Systems Regulator into the Financial Conduct Authority.

• merging the Gangmaster and Labour Abuse Authority, Employment Agency Standards Inspectorate and Director of Labour Market Enforcement into the Fair Work Agency.

The government also said watchdogs have signed up to 60 "growth boosting measures", including fast-tracking new medicines to market so patients can more quickly access them, and helping start-ups secure funding through the Financial Conduct Authority (FCA) issuing more notices where they are likely to approve applications from budding entrepreneurs.

The announcements follow the confirmation by prime minister Keir Starmer last week that the government will close NHS England, described as "the world's largest quango".

Chancellor Rachel Reeves said:

"The world is changing and that's why we must go further and faster to deliver on our plan for change to kickstart economic growth. Today we are taking further action to free businesses from the shackles of regulation.

"By cutting red tape and creating a more effective system, we will boost investment, create jobs and put more money into working people's pockets."

Business and trade secretary Jonathan Reynolds added:

"Unnecessary regulation chokes competition and stifles business. That's why we're taking action to unleash industry right across the UK to go for growth."