CIPS licence to practice idea – this won’t help the procurement profession at all

LATE NEWS -  "In the UK, there are no licence requirements for individuals to describe themselves as accountants.”  So that analogy breaks down at the first hurdle.

 

My heart sank when I saw that CIPS have made it official Institute policy that we should “licence” procurement people and somehow make it compulsory that only licensed practitioners can execute procurement activities within organisations.

“The licence to practise would ensure that senior procurement and supply chain managers would be required to have a professionally recognised licence, in a manner akin to the licencing of the accountancy professionsays the CIPS statement.

Then the Policy Statement says;

“The procurement and supply profession must be formally licensed both to protect the public good and to enhance and underpin its significance. This Licence is required by all professionals who are tasked with managing an enterprise's spend”.

I’ve argued against this before, and I take no pleasure in opposing my Institute’s position on an important issue like this. But I am categorically, 100% against it.

One caveat. I can see why this might be appropriate in the government sector in certain countries, as a bulwark against corruption in the procurement process. If a government wants to do something like this for its own staff, then fine – that’s their call. However, even here, it would be interesting to see any evidence that CIPS members are less likely than non-members in certain countries to be corrupt.

But it is the idea of licensing for private sector organisations that I find depressing and futile – I think that is the best word.  And I don’t believe the initiative will benefit our profession at all.

I was on the phone to a senior manager – not in procurement -  just after I started composing this piece  yesterday and I mentioned what I was writing about. “That sounds a bit self-serving”, was her instant and immediate reply (and she is someone who is positive about procurement generally).   Well yes, it will make CIPS look self-serving and self-interested.  Frankly, you may think it is CIPS being self-serving and self-interested – but there’s no doubt how it will look to the outside world.

And even if it happened, who would decide what licensing is allowable? Do CIPS think that the Institute itself will be the licensing body? Surely it can’t be.  So we will need a new quango to approve license awarders. And what is the geographic reach of this? Global? UK?  Will non-UK companies have to recruit a UK procurement professional to be allowed to trade in the UK?

We’ll come back to this, to be sure, and there are many other questions.  But I wanted to get into the debate today at least. So let’s finish with the great Adam Smith, and words that are as true today as they were in 1776.

“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices”.

Whatever the true motives of David Noble and colleagues, that’s what this will look like, I’m afraid - the action of a procurement trade union, looking to boost the status and wealth of itself and its members through regulatory protection and action.

Comments welcome as ever and more on this to come.

Voices (14)

  1. bitter and twisted:

    The CIPS policy basically says ‘in order to become a specialist you have to be standardized first’.

  2. Trevor Black:

    I am pleased that the proposal that was sent out by CIPS last week is at least being discussed and good to see so many getting hot under the collar over it. This may not be the solution but the fact remains that the profession is falling short as many of its members believe that passing an exam over 20 years ago still makes you a professional. There is a global shortage of commercial skills required by business and CIPS needs to step up to the mark or disappear. Ignore the reality if you wish but constructive prposals I’m sure will be greatly received.

  3. Rish:

    You are right, in that there is no requirement for anyone to describe themselves as ‘accountant’. BUT: Only certain types of accountants can engage in certain types of work. For example, only ICAEW – the ‘Chartered Accountants’- may describe themselves as such. Along with ACCA (the ‘Chartered Certified Accountants’) these two are the only bodies whose members can engage in providing services to companies such as statutory preparation and Authorisation of company accounts.

    Also, while once can and must be a member of any of the major accountancy bodies (there are 6, the two above plus CIPFA and CIMA and the two Chartered bodies of Scotland and Ireland) to engage in audit work; only the first two bodies can issue auditors licenses for statutory auditors in England and Wales.

    CIPFA and CIMA members must take examinations/exemptions to gain membership or authorisation from one of the other two in order to carry out these reserved duties.

    Another example would be for a listed company to have a qualified person as a company secretary. This person can either be a Chartered Secretary, solicitor, barrister or a member of one of the 6 professional accountancy bodies above.

    While I don’t necessarily agree with CIPS, I think the point is that private companies do have to utilise the services of particularly qualified people with membership or licence from certain professional bodies in order to comply with the law. The implication of the law being that only suitable, independent bodies ought to qualify/authorise people to carry out these functions because such membership is dependent upon the agreement of the qualified personnel to comply with certain standards of ethics and to have been suitably educated and experienced in the pertinent principles to carry out that function. And that having such a requirement in place, while not eradicating the problems of fraud etc., could help to ensure that those carrying out important functions on behalf of the company have the interests of the company and the public good in mind.

    Thinking about this and another post on changing the name of procurement, I do think though that we ought to have a better name for us as professionals.

    Accountants, surveyors, engineers and even builders who are properly qualified to call themselves ‘Chartered…..’ have cottoned on that somehow this raises the status, prestige and even the public understanding of what it is they are qualified to do. Even where a qualified accountant is not engaged directly in accountancy per se, having the term on his/her business card or store-front could be said to raise his/her profile. I have noticed that a number of estate agents partnerships, flash the status of their principle partners where they are RICS and/or RIOB members even though there is certainly no requirement for estate agents to be qualified in any way at all – the hope is of adding certain sense of professionalism to their image perhaps?

    Perhaps MCIPS members should become ‘Chartered Procurers’ or similar?

    I note that this is exactly what Nigeria has done. They DO require their public sector procurers to be members of their version of cips to practice too it seems. Which is Peter’s point on the developing world I guess:

    https://groups.google.com/forum/#!msg/oguejiofo/3_yT0HCiWiE/Pp5rBhuN9RYJ

  4. RJ:

    I can’t see how this will go anywhere. How would it possibly be policed? What arbitrary thresholds might be applied (value of the purchase, size of the organisation, number of employees, nature of the purchase)? What would you actually be “qualified” in, as there is such a range of skills required to manage procurement to a high quality? And can anyone in CIPS say how being “qualified” ever stopped an individual from being corrupt, misguided or unprincipled? Pure headline grabbing with no real intent, I’m sure.

    But it’s prompted the biggest debate for a few days on Spend Matters!

  5. Ed Luttrell:

    I agree with your position, Peter (and, it seems, all of the above comments.) Whilst it pains me to openly criticise CIPS, I’m adding my view because I’m passionate about playing a part in making a POSITIVE difference to the performance and standing of the profession. Guy’s comment particularly resonates with me; I guess that CIPS have done well to establish a qualification-based framework that addresses (mainly) the technical competencies required for ‘core’ procurement practice. However, as Guy points out (extrapolating), in the end the nature of procurement’s engagement with the wider business will come down to people. My hobby-horse: behavioural flexibility and mental/emotional agility. How will a licence to practise enhance or even address this I wonder?

  6. Ben Glynn:

    I concur.. not a very well thought through idea. I agree with B&T regarding CIPS profit. Also, who would regulate it? They would have to set up a PCA (Procurement Conduct Authority!) and who would fund that?

  7. Graham Smith:

    Oh dear. Not a good idea. Despite the fact that this will never gain any significant traction or ever get close to being implemented it will certainly not help the debate with internal stakeholders on the value a commercially orientated procurement team can deliver.

  8. Paul Wright:

    Terrible idea. It also perpetuates the idea that procurement is an administrative function like accounting or law, rather than a commercial function like sales (yes I know law and accounts are not always admin, but still).

  9. Aardvark:

    If CIPS had any influence, I’d be worried.

    A good starting point would be for them to publish some evidence of linkage between CIPS qualifications and performance. In my experience there’s no correlation between MCIPS and results, and a negative correlation between FCIPS and results…

    Unfortunately there seems to be a bit of a protectionist theme emerging: this follows hot on the heels of the attack on commissioning.

    It doesn’t help any of us when our professional body seems to be terrified of the competition.

  10. bitter and twisted:

    The ‘problem’ is not enough CIPS profit.

  11. Guy Allen:

    I suspect the problem it is trying to solve is Procurement Involvement. But you cant fix that by legislation, it will just become a box ticking exercise

    What is important is the quality of the involvement, not the quantity. And this in the end boils down to the quality of the individuals involved rather than any imposed rules

  12. Dan:

    This is just plain daft. Anyone with some commercial nous is capable of procuring effectively. And just having a qualification is not a guarantee of quality.

    The only sector where something like this would be useful would in the public sector – having to deal with the public procurement regs means you need more specialised knowledge over and above commercial expertise. I wouldn’t trust CIPS to provide this though. I learned nothing new of the procurement regs from my CIPS diploma, and in some cases had to correct my tutor when he got it wrong.

    Where would this leave small companies? All companies, regardless of size, need to carry out procurement activity of some sort, even if its just the electricity bills for the office and some stationery. Yet the smaller ones might not be able to justify the cost of a dedicated procurement person.

  13. Ian Heptinstall:

    What problem is this trying to solve? How will a licence make things better? What analysis have they done into obstacles & side-effects of the proposal?

    I have my own guesses, what do others think?

  14. bitter and twisted:

    Terrible idea.

    Now how to kill it?

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