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<strong>BRITISH</strong> <strong>PR<strong>OF</strong>ESSIONS</strong> <strong>TODAY</strong>:<br />
<strong>THE</strong> <strong>STATE</strong> <strong>OF</strong> <strong>THE</strong> SECTOR
Table of contents >><br />
1 Introduction 1<br />
1.1 What is a profession? 3<br />
1.2 History of the professions 3<br />
1.3 Declining public perceptions 5<br />
2 Changing regulatory structures 8<br />
2.1 Why regulate? 9<br />
2.2 Historical development 11<br />
2.3 Regulated self-regulation 13<br />
2.4 Case study: the legal professions 14<br />
3 The professional economy 17<br />
3.1 Output 19<br />
3.2 Business creation 20<br />
3.3 Productivity 21<br />
3.4 Balance of payments and trade 22<br />
3.5 Employment 23<br />
3.6 UK professions in Europe 23<br />
4 Social and political contributions 24<br />
4.1 Social mobility 25<br />
4.2 Political consultation 27<br />
4.3 Case study: RICS and Home<br />
Information Packs (HIPs) 30<br />
References 36<br />
Appendices 38<br />
1. Lord Benson’s criteria for the 38<br />
professions<br />
2. Personal interviews 39<br />
Tables, Lists and Charts<br />
Percentage of total UK output 19<br />
(real UK GDP) by sector<br />
VAT registrations and deregistrations 20<br />
as a percentage of stock<br />
Output per employed job 21<br />
by sector (£000s, current prices)<br />
2006 balance of payments, 22<br />
other business services (£ million)<br />
2006 balance of payments, 22<br />
trade in services (£ million)<br />
Percentage of total UK employment 23<br />
by sector<br />
Professional influence in official 29<br />
parliamentary proceedings<br />
5 Conclusion 32<br />
5.1 Summary of findings 33<br />
5.2 Vision for the future 35<br />
© Spada. Some rights reserved. As the originator of this work, Spada,<br />
together with our study sponsors RICS, the Law Society, and CIMA, want<br />
to encourage the circulation of this research as widely as possible while<br />
retaining the copyright. We have therefore developed an open access<br />
policy enabling anyone to access this content online without charge.<br />
Anyone can download, save, perform or distribute this work in any<br />
format, including translation, without written permission. This is,<br />
however, subject to the following terms:<br />
• Spada is credited as author; RICS, the Law Society, and CIMA are<br />
credited as study sponsors<br />
• The address www.spada.co.uk is displayed<br />
• The text is not altered and is used in full<br />
• The work is not resold<br />
• A copy of the work or link to its use online is sent to Spada
Foreword >><br />
This research by Spada was prompted by the informal<br />
collaboration of a working group of professional membership<br />
bodies, which gathered in the interest of the public good to<br />
encourage debate about the role of the professions in society.<br />
The group, which included the Law Society and the Royal<br />
Institution of Chartered Surveyors (RICS), the Chartered<br />
Institute of Management Accountants (CIMA), the Bar<br />
Council, and the Institute of Chartered Accountants in<br />
England and Wales, shared concerns about declining public<br />
esteem for the professions, the associated disadvantage in the<br />
recruitment of young talent, and the sometimes damaging lack<br />
of government consultation on issues of relevant technical<br />
expertise. As a way of grounding their discussions, and in<br />
order to gain an overall snapshot of the professions in the<br />
UK, the group commissioned Spada to research the history<br />
of British professions and their current import to our national<br />
economy, political life and civil society.<br />
As we undertook this research, however, we found that the<br />
report occupied a unique place within the extant sociological,<br />
political, and economic literature on the professions.<br />
Currently, no other document brings together a summary of<br />
the British professions’ history and structures, their various<br />
roles and contributions to society, and a vision for the future.<br />
Three of the group’s member bodies, The Law Society,<br />
RICS, and CIMA, have decided to publish the findings as a<br />
condensed report in order to provide a public forum for<br />
further discussion of these issues. British Professions Today:<br />
The State of the Sector thus represents a first attempt to<br />
set forth a compact overview of the value and scope of<br />
British professions.<br />
Spada’s research is a limited reconnaissance of a vast and<br />
complex subject. The picture of the professions<br />
that emerges, at a juncture when many are undergoing<br />
transformation, is a fascinating one. Despite their obvious<br />
influence and involvement in almost every aspect of people’s<br />
lives, at every level of the bodies politic and economic, and<br />
their extraordinary economic contribution (as the research<br />
documents), the professions do not represent a collective<br />
force in the eyes of our policy makers and opinion-formers.<br />
Hitherto, most professions have tended to think narrowly of<br />
their own discipline and their own individual roles in public life.<br />
Our research suggests that there may indeed be a place for a<br />
united, clear and powerful professional voice in our public life,<br />
but only if the professions can first recognise the extent of,<br />
and limits to, their own latent power in combination. In this<br />
latter respect, we hope the research starts the process of<br />
building up ‘self-knowledge’.<br />
How do we sustain our prosperity and our competitiveness<br />
as a nation? How do we achieve an appropriately skilled<br />
workforce, and a more meritorious civil society? How can<br />
politicians originate better policies and better legislation? Who<br />
will guarantee fair play in the market place? Who will set the<br />
moral tone in business and society (so that we become more<br />
trust- and principles-based and less fettered by over-regulation<br />
and legislation)? How can complex knowledge businesses<br />
learn from one another? These are some of the fundamental<br />
questions that the professions might be well placed to address<br />
with a collective effort.<br />
Finally, the Spada team would like to take this opportunity to<br />
thank all those who have given so generously of their time to<br />
furnish many of the insights that have gone into this document.<br />
Gavin Ingham Brooke<br />
Managing Director, Spada Limited<br />
Ana Catalano<br />
Research Consultant, Spada Limited<br />
British Professions Today: The State of the Sector © Spada Limited 2009<br />
i
Executive summary >><br />
Professionals in the UK form part of the backbone of the<br />
services-based economy, play key roles in the political process,<br />
and, perhaps most importantly, provide vital services in our<br />
day-to-day lives. Yet, the professions have come under attack<br />
from dual fronts: from government, which often fails to<br />
consider professional expertise in relevant policy areas; and<br />
from the general public, which has come to view professionals<br />
suspiciously in an era of declining deference to authority. How<br />
has this ambivalent state of affairs come about, and why do<br />
the professions continue to matter, despite such criticisms,<br />
now more than ever?<br />
British Professions Today: The State of the Sector<br />
represents a first attempt to set forth a condensed overview<br />
of the value and scope of British professions – historical,<br />
regulatory, economic, social and political. The Law Society,<br />
the Royal Institution of Chartered Surveyors (RICS), and the<br />
Chartered Institute of Management Accountants (CIMA)<br />
have undertaken this research for the benefit of the public<br />
and publish the findings to provide an open forum for<br />
further discussion of these issues.<br />
Key Facts<br />
> Professional structures have evolved from the social clubs<br />
and guilds of old to the institutions of today via a process<br />
of gradual establishment and by entering into regulatory<br />
bargain with the state.<br />
> Whilst professions have gained societal importance with<br />
the rise of the information age, they have simultaneously<br />
experienced some decline in public esteem.<br />
> The perceived self-interest of the professions has brought<br />
about significant changes in regulatory structures as the<br />
traditional model of self-regulation is shifting to one of<br />
‘regulated self-regulation.’<br />
> Professions as a group are understudied: an industrial<br />
category of analysis for the professional sector does not<br />
yet exist, and thus truly accurate and comprehensive<br />
statistics on the economic contributions of professional<br />
occupations cannot be measured and compiled.<br />
There is no single, agreed upon definition of ‘profession,’<br />
but for the purposes of this report we follow Sir Alan<br />
Langlands’ working definition: those occupations “where a<br />
first degree followed by a period of further study or<br />
professional training is the normal entry route and where<br />
there is a professional body overseeing standards of entry<br />
to the profession” (Langlands 2005). However, it should<br />
be recognised that entry to a professional qualification may<br />
initially be at a lower level than a first degree, although the<br />
final output will be commensurate with a period of further<br />
study and training beyond the level of a first degree.<br />
Our data has been sourced from the Office of National<br />
Statistics (ONS) and the Sector Skills Development Agency<br />
(SSDA) as of July 2008. For a full explanation of data sources<br />
and disclaimer please see page 18.<br />
><br />
><br />
><br />
Professional services as represented in the category SIC 74<br />
(see page 18 for an explanation) account for the largest<br />
single share of UK output (in UK real GDP), contributing<br />
8% of the total.<br />
Professional services continue to expand at an impressive<br />
rate and have been forecast to grow 3.4% average<br />
annually from 2004 to 2014 compared to 2.4% average<br />
annual growth forecast for the whole economy in the<br />
same period.<br />
Professional services as represented by SIC 74 account for<br />
£15,849 million of British trade in services, or over half of<br />
the total £29,194 million (balance of accounts, as credits<br />
less debits), helping to offset the growing negative balance<br />
of trade in goods.<br />
ii
><br />
><br />
><br />
><br />
><br />
The professions represent the largest single category<br />
of employment in the UK, with 11.5% of total UK<br />
employment.<br />
UK professionals were the largest contributor to the<br />
EU27’s professional sector in 2004, with EUR 203.5 billion<br />
of value added, generating 27.5% of the EU27’s sectoral<br />
value added and employing 19.5% of its workforce.<br />
The professions have played a big role in the development<br />
of meritocracy because of their emphasis on knowledgebased<br />
skills rather than social class.<br />
The professions are a potential source of ethical role<br />
models via promulgation of professional standards, ethics<br />
and morality in business, government, and civil society.<br />
Policy on sophisticated technical skills in the UK is often<br />
legislated without appropriate professional expertise (eg<br />
the case of HIPs) to real consumer and public detriment.<br />
On average, top professional service firms (eg KPMG)<br />
achieve far greater coverage in parliamentary debate<br />
than their fee earners’ professional membership bodies<br />
(eg the ICAEW).<br />
Recommendations<br />
> The legacy of British professions is formidable,<br />
but should not be taken for granted in light of the<br />
threats posed by the evolution of consumerist<br />
values, instant gratification, declining client loyalty,<br />
increasing media scrutiny, and increasing regulation.<br />
> New methodologies and metrics for analysing the<br />
professions should be formulated, as well as<br />
greater transparency and consistency in reporting,<br />
in order for the full extent of professionals’<br />
contributions to society to be brought to light.<br />
> Significant benefit – for the public interest,<br />
government, and the professions themselves<br />
– may come from the professions working<br />
together and speaking with the authority of a<br />
single voice to government and the general public.<br />
> The problems in the banking sector exposed<br />
by the financial crisis in 2008 illustrate all too<br />
clearly the need for professional standards specific<br />
to that sector, including rigorous qualifications,<br />
high standards, continuous monitoring, and<br />
appropriate disciplinary mechanisms.<br />
><br />
The findings set out in this initial report might spur<br />
further debate in appropriate forums with key<br />
stakeholders – government, business, education,<br />
organised labour, professionals themselves, and<br />
most importantly consumers and the general<br />
public – on a range of issues including, but not<br />
limited to, social mobility, skills, regulatory<br />
structures, inter-professional collaboration and<br />
the public interest.<br />
Des Hudson<br />
Chief Executive, The Law Society<br />
Louis Armstrong<br />
Chief Executive, RICS<br />
Charles Tilley<br />
Chief Executive, CIMA<br />
British Professions Today: The State of the Sector © Spada Limited 2009<br />
iii
About us >><br />
RICS is the world’s leading qualification<br />
for professional standards in land,<br />
property and construction. With<br />
over 100,000 property professionals<br />
working in the major established and<br />
emerging economies across the<br />
globe, RICS is the mark of property<br />
professionalism worldwide.<br />
RICS is an independent professional<br />
body originally established in the<br />
UK by Royal Charter. Since 1868,<br />
RICS has been committed to setting<br />
and upholding the highest standards<br />
of excellence and integrity – providing<br />
impartial, authoritative advice on<br />
key issues affecting businesses<br />
and society.<br />
For more information please visit<br />
www.rics.org<br />
The Law Society is the professional<br />
membership body which represents<br />
solicitors in England and Wales. The<br />
Law Society was founded in 1825,<br />
after several prominent attorneys<br />
met to call for the formation of a law<br />
institution to raise the reputation of<br />
the profession by setting standards<br />
and ensuring good practice.<br />
Today, The Law Society counts as<br />
its members nearly 135,000 solicitors<br />
on the Roll and is a major player on<br />
the international legal stage. The<br />
Law Society aims to equip the whole<br />
profession, from sole practitioners<br />
to high street and City firms, to meet<br />
the challenges and opportunities ahead<br />
and provide the best possible services<br />
to the public.<br />
For more information please visit<br />
www.lawsociety.org.uk<br />
The Chartered Institute of Management<br />
Accountants, founded in 1919, is the<br />
world’s largest professional body of<br />
management accountants, with 171,000<br />
members and students operating in<br />
161 countries. CIMA is responsible<br />
for the education and training of<br />
management accountants who work in<br />
industry, commerce, not-for-profit and<br />
public sector organisations.<br />
Working closely with employers, CIMA<br />
offers a globally recognised management<br />
accounting qualification, sponsors<br />
leading-edge research, and supports its<br />
members through professional guidance<br />
and development. CIMA is committed<br />
to upholding the highest ethical and<br />
professional standards of members and<br />
students, and to maintaining public<br />
confidence in management accountancy.<br />
For more information please visit<br />
www.cimaglobal.com<br />
iv
1Introduction >>
Introduction >><br />
All professions are conspiracies<br />
against the laity.<br />
George Bernard Shaw, The Doctor’s Dilemma, 1911<br />
Professionals in the UK form part of the backbone of the<br />
services-based economy, play key roles in the political process,<br />
and, perhaps most importantly, provide vital services in our<br />
day-to-day lives. Professions are involved in every aspect<br />
of human life: birth, survival, physical and emotional health,<br />
dispute resolution and law-based social order, finance and<br />
credit information, educational attainment and socialisation,<br />
physical constructs and the built environment, military<br />
engagement, peace-keeping and security, entertainment and<br />
leisure, religion and our negotiations with the next world<br />
(Olgiati et al. 1998).<br />
Yet, the professions have come under attack from dual fronts:<br />
from government, which often fails to consider professional<br />
expertise in relevant policy areas; and from the general public,<br />
which has come to view professionals suspiciously in an era of<br />
declining deference to authority. How has this ambivalent state<br />
of affairs come about, and why do the professions continue to<br />
matter despite such criticisms, now more than ever?<br />
The aim of British Professions Today: The State of the<br />
Sector is to establish a set of core statistics and key<br />
information about the role of professions in the UK, within<br />
the context of the broader political, economic, social and<br />
technological landscape. It is our hope that this report will<br />
provide the substance to develop an open forum of debate<br />
on the current roles and future of UK professions on<br />
multiple levels, from the professional community through<br />
to the wider public.<br />
Methodology<br />
A number of methodologies were employed to<br />
prepare this report: desk research sourced from<br />
secondary literature, web research, original<br />
quantitative and qualitative research, and a series<br />
of in-depth interviews with key members of<br />
professional bodies. Please see Appendix 2, p. 39,<br />
for a list of the personal interviews that were<br />
conducted for this research. All tables, charts and<br />
graphs have been originated at Spada.<br />
We would like to point out certain limitations of<br />
the study and welcome comments and criticism.<br />
If the study is to be taken seriously, it must lead<br />
to follow-up research and discussion. The first<br />
constraint on the research project is its vast scope.<br />
The approach adopted favours a broad analysis<br />
of trends across the professions in historical and<br />
comparative context over a narrower, in-depth<br />
study of just one or two professions. Due to the<br />
inevitable lack of completeness, particularly the<br />
absence of quantitative measures of analysis,<br />
this report cannot claim to be definitive. Instead,<br />
it offers a critical synthesis of the literature<br />
and statistics available to date, supplemented by<br />
original quantitative and qualitative research where<br />
this has been possible.<br />
2
1.1 What is a profession?<br />
There is no single definition of ‘profession’. For the purposes<br />
of this report, we follow Sir Alan Langlands’ working<br />
definition from his Gateways to the Professions report: those<br />
occupations “where a first degree followed by a period of<br />
further study or professional training is the normal entry route<br />
and where there is a professional body overseeing standards<br />
of entry to the profession” (Langlands 2005). However, not<br />
all professions require an initial degree qualification, the<br />
professional qualification itself providing at least an equivalent<br />
level of achievement.<br />
A more comprehensive study of the term reveals various<br />
connotations. Meanings range from the narrowly defined<br />
traditional professions of doctor, lawyer, and accountant<br />
to the broadly defined usage as any occupation by which<br />
someone earns a living. “Professional” now refers to<br />
competency and efficiency in almost any field (eg the<br />
professional footballer). The Oxford English Dictionary<br />
(OED) defines professional occupation as, “an occupation<br />
in which a professed knowledge of some subject, field, or<br />
science is applied; a vocation or career, especially one that<br />
involves prolonged training and a formal qualification.” In early<br />
use, the OED specifies that the word applied specifically to<br />
the professions of law, the Church, and medicine, sometimes<br />
extending into the military profession.<br />
One of the most thoughtful and comprehensive definitions<br />
of “profession” is Lord Benson’s 1992 criteria for professional<br />
bodies. Lord Benson stated that to be a professional is to<br />
operate within certain principles, most of which ultimately<br />
pertain to the public interest, which he went on to detail in<br />
nine points (see Appendix 1, p. 38).<br />
Indeed, it is the duty to serve the public interest which<br />
distinguishes a profession from a representative body such<br />
as a trade union. This attribute encompasses independent<br />
(eg self-employed barristers), organisational (eg accountants<br />
working in firms), and public sector professions (eg health<br />
care professionals). Our research focuses on the private<br />
sector, “liberal” professions. Though the report approaches<br />
the professions as a generic group of occupations, it does<br />
not attempt to draw a hard and fast line, or even count the<br />
number of professions in the UK. 1 Labelling is less important<br />
than acknowledging the shared, professional characteristics<br />
of certain occupations. Following Everett C. Hughes (1963),<br />
professionalism is a process as well as a structure: “…in my<br />
studies I passed from the false question ‘Is this occupation<br />
a profession’ to the more fundamental one ‘what are<br />
the circumstances in which people in an occupation<br />
attempt to turn it into a profession and themselves into<br />
professional people’?”<br />
1.2 History of the professions<br />
The professions can be considered an “articulation” of<br />
the modern capitalist state (Johnson 1982), because the<br />
opportunity for professions to emerge and thrive is made<br />
possible by modern societies, where knowledge is a unified,<br />
autonomous realm (Gellner 1988), and where free markets<br />
in goods and services exist (Weber 1978). While some<br />
professions, such as medicine and law, have long and rich<br />
histories, in general the rise of the professions in Western<br />
society is a relatively recent historical phenomenon. The<br />
roots of most modern-day professions may be traced to<br />
the nineteenth century or later, with most professions fully<br />
coalescing in the twentieth century (Jennings et al. 1987).<br />
1 Incidentally, no offi cial fi gure for the number of professions or professional<br />
bodies in the UK exists. The Privy Council keeps a record of the number<br />
of Chartered bodies (currently 750), but this fi gure includes other bodies<br />
such as educational institutions. Moreover, certain professions are<br />
represented by several Chartered bodies (eg accounting), and some<br />
remain un-Chartered (eg barristers).<br />
British Professions Today: The State of the Sector © Spada Limited 2009 3
Introduction continued >><br />
Knowledge has become more specialized and technology<br />
more complex, resulting in greater power for established<br />
professions as well as the growth of new professions.<br />
Journalism, management consultancy, and public<br />
administration are just a few of the many occupations<br />
which have attained professional status in the twentieth<br />
century (Ibid.).<br />
The origins of many modern professional bodies are to be<br />
found in social clubs, formed to provide a forum to exchange<br />
ideas on a particular subject without any conscious intention<br />
of becoming a regulatory institution. For example, RICS<br />
counts as its antecedents the Surveyors Club (1792), the Land<br />
Surveyors Club (1834), and the Surveyors’ Association (1864).<br />
By 1868 surveyors in these and other clubs saw enough<br />
identity of purpose to create the Institution of Surveyors, and<br />
a Royal Charter was granted in 1881. The Law Society was<br />
founded in 1825, after several prominent lawyers met to call<br />
for the formation of a law institution to raise the reputation of<br />
the profession by setting standards and ensuring good practice<br />
(Sugarman 1994).<br />
As professions became more established, with distinct sets<br />
of interests, memberships, and bodies of knowledge, so they<br />
began to seek monopoly and privilege. To attain this, they had<br />
to enter into a special relationship with the state so as to<br />
achieve a monopoly, or at least licensure (MacDonald 1995).<br />
This agreement has come to be called the ‘regulative bargain’<br />
with the state (Cooper et al. 1988). The political culture of a<br />
society, which influences the style of this regulative bargain,<br />
can be seen as crucial for the development of a profession.<br />
As a “mixed economy” Britain falls somewhere in between<br />
the extremes of the most capitalist or free-market oriented<br />
states, eg the United States, and the state-controlled,<br />
command economy of the former USSR (Perkin 1996).<br />
In continental Europe, professions generally have been and<br />
are mainly employed in the public sector, closely connected to<br />
and controlled by state authorities (Torstendahl and Burrage<br />
1990). The Anglo-American ‘ideal type,’ by contrast, stresses<br />
the freedom of self-employed practitioners to control working<br />
conditions (Collins 1990). These differences are also reflected<br />
in the types of professionalisation; the Anglo-American type<br />
focuses on “private government” within an occupation, whilst<br />
the Continental type focuses on the political struggle for<br />
control within an elite bureaucratic hierarchy (Ibid.).<br />
So, the evolution of professional structures has not been a<br />
static or isolated series of events. Professions have been,<br />
and continue to function as, part of an important dialectical<br />
movement within British society. Professionals play key roles<br />
in reflecting and developing societal views, norms and<br />
procedures. One of the most obvious manifestations of this<br />
process is the standardised procedure of ‘precedent’ in English<br />
common law. Common law can be contrasted with the more<br />
rigorous, code-based civil law systems of continental Europe,<br />
in which judicial precedents are considered persuasive as<br />
opposed to binding. Professions have matured and evolved<br />
whilst influencing the concurrent development of the British<br />
system of government and constitution.<br />
4
The unique role of trust in professional societies<br />
Just as individuals have grown increasingly dependent on<br />
professionals, so society as a whole has also become reliant<br />
upon them. We depend on professionals to maintain our<br />
health, handle our legal and financial affairs, protect our<br />
political interests, and manage businesses that provide us<br />
with employment and consumer goods (Jennings et al.<br />
1987). People rely on the ethical integrity of professionals<br />
in a way unprecedented in other occupations because the<br />
services offered by a professional are characteristically<br />
different from goods that are sold by a manufacturer,<br />
merchant or retailer.<br />
A professional provides intangible services, and the purchaser<br />
has to take them on trust. It is in the nature of some of these<br />
services that they are going to be unsuccessful: half of legal<br />
advocates appearing before a court of law may lose their<br />
cases, and doctors will inevitably lose patients. Strong<br />
educational background and qualifications are thus necessary,<br />
but trust, measured by outward appearance and manner<br />
fitting the socially accepted standards of repute and<br />
respectability, is often just as important (MacDonald 1995).<br />
Professional bodies accordingly have a twin function in<br />
assuring quality services to the public, as well as representing<br />
their members in the regulative bargain with the state<br />
(Cooper et al. 1988).<br />
“ As the world has grown more<br />
specialized, countless such experts<br />
have made themselves similarly<br />
indispensable. Doctors, lawyers,<br />
contractors, stockbrokers, auto<br />
mechanics, mortgage brokers, financial<br />
planners: they all enjoy a gigantic<br />
informational advantage. And they<br />
use that advantage to help you, the<br />
person who hired them, get exactly<br />
what you want for the best price.<br />
Right?<br />
It would be lovely to think so.<br />
But experts are human, and humans<br />
respond to incentives.”<br />
(Levitt and Dubner 2005: 5)<br />
1.3 Declining public perceptions<br />
Though the professions have gained power in numbers and<br />
societal importance, equally they are criticised now more than<br />
ever before as, what George Bernard Shaw originally dubbed,<br />
“conspiracies against the laity.” It has become more and more<br />
popular to question the motives, ethics and value of our<br />
expert class. University of Chicago economist Steven Levitt<br />
and New York Times journalist Stephen J. Dubner summarise<br />
this view in the chart-topping book Freakonomics:<br />
British Professions Today: The State of the Sector © Spada Limited 2009 5
Introduction continued >><br />
Part of the decay in public perceptions of the professions may<br />
have been inevitable. Post-industrial values are characterised<br />
by declining deference to authority, and political and religious<br />
institutions have also suffered in this respect (Inglehart and<br />
Baker 2000). The transition from an industrial society to a<br />
knowledge society has brought about an unprecedented level<br />
of wealth, meaning that people can move beyond thinking<br />
about survival to thinking about their subjective well-being.<br />
Values have shifted from an emphasis on physical and<br />
economic well-being to individual freedom and self-expression<br />
(amongst others).<br />
This new focus on subjective well-being is combined<br />
with unparalleled availability of information due to the<br />
exponential growth of technology in the past quarter of a<br />
century. Consequently, even as professionals grow in political,<br />
economic and social significance, members of the public<br />
are able to put their claims of status and expertise under<br />
ever sharper scrutiny. Doctors face patients who must be<br />
convinced of their diagnosis because WebMD.com may<br />
offer a plausible alternative opinion. The internet revolution<br />
threatens the information asymmetry that has always been<br />
a key feature of the relationship between professionals<br />
and clients.<br />
Opinion poll data confirm the professions’ gradual erosion in<br />
the public opinion. Trends from the UK Ipsos MORI ‘Opinion<br />
of Professions’ survey chart a slow but sure fall in the<br />
percentage of people who are very or fairly satisfied with<br />
the way that accountants and lawyers do their jobs. Approval<br />
of accountants fell from 61% in 1999 to 58% in 2004, while<br />
approval of lawyers fell from 58% in 1999 to 54% in 2004<br />
(Ipsos MORI 2006). Similarly, the US Harris Poll of Prestige<br />
in Professions found that of the ten occupations at the<br />
bottom of the American public’s regard, five of these come<br />
from the professional world – journalists, bankers,<br />
accountants, stockbrokers, and business executives. 2 In the<br />
past quarter of a century, the number of people who see<br />
lawyers as having “very great” prestige has fallen some 14<br />
points, from 36 to 22 %. Scientists have fallen 12 points from<br />
66% to 54%, doctors have fallen nine points from 61% to<br />
52%, and bankers have fallen seven points from 17% to 10%<br />
(The Harris Poll 77, 2007).<br />
2 Similar data measuring prestige of the UK liberal professions was not<br />
available, though the Ipsos MORI ‘Trust in professions’ poll measures trust<br />
in a range of other occupations such as doctor, policeman, civil servant<br />
and teacher.<br />
6
Because the professions can only exist on the fiduciary<br />
principle (to the extent that they inspire public trust in their<br />
services), a real or perceived lack of ethical standards should<br />
be considered the most serious of threats. Nearly every<br />
profession has been vilified at one time or another for<br />
malpractice. Recently the corruption of corporate executives<br />
from Enron and WorldCom caused a downward spiral in<br />
public trust of professionals. Usually, such scandals are<br />
perpetrated by the few, yet affect the reputations of many<br />
more members within the profession, as well as the status<br />
of the profession as a whole. The Edelman Trust Barometer<br />
found that, after the 2002 US scandals, public trust in<br />
‘business’ (a category which includes several professions)<br />
fell to a low of 44% of those surveyed. Yet by 2007, trust<br />
in business was back up to 53%, higher than media or<br />
government. This growth in public trust likely was inspired<br />
by strong economic growth, repercussions for executive<br />
wrongdoing, and faith in the role businesses are playing in<br />
solving societal and environmental problems (Deaver 2007).<br />
More recent events, particularly the economic downturn,<br />
will undoubtedly alter this yet again.<br />
The US business example provides compelling evidence that<br />
even more than the high-quality and reliable provision of<br />
services, professional ethics are paramount to maintaining the<br />
public trust. In a speech to the Royal Society for the Arts’<br />
‘Professional Values for the 21st Century’ project Professor<br />
Harold Perkin commented: “Stripped of the deference due<br />
to their ethics and trustworthiness, they [professionals] are<br />
as vulnerable as redundant miners and steel workers”<br />
(Ibid. 2002). Certainly, British governments from Thatcher<br />
to Brown have failed to see a professional distinction, often<br />
treating professions no differently from trade unions or<br />
businesses: all as self-interested bodies competing in the<br />
free market (Craig 2007). For example, speaking about<br />
professional services in supply and demand metaphors,<br />
Department of Constitutional Affairs Minister Bridget Prentice<br />
commented: “I don’t see why consumers should not be able<br />
to get legal services as easily as they can buy a tin of beans”<br />
(quoted in The Telegraph, 18 October 2005).<br />
Professional services cannot be provided like a tin of beans<br />
because of inherent information asymmetries between<br />
professionals and clients. Clients are vulnerable because they<br />
lack the expertise to judge whether the professional that they<br />
have hired is doing a good job; they must rely on professional<br />
ethics and competency above and beyond the pure choice of<br />
market options (Friedman 2006). The next section addresses<br />
how professional bodies are structured to protect their<br />
reputations and the public interest simultaneously.<br />
British Professions Today: The State of the Sector © Spada Limited 2009 7
2Changing regulatory structures
Changing regulatory structures >><br />
When a system of multiple controls<br />
works properly, no one controls an<br />
agency, but it is ‘under control’.<br />
Terry Moe, American Professor of Political Science, 1987<br />
The balance between regulation and<br />
representation is crucial to professional identity.<br />
Organisational structure is a key prerequisite<br />
to any definition of ‘profession’: “An obvious,<br />
politically-based definition, albeit of little<br />
normative value, would be to accept as<br />
professions whatever occupations have been<br />
successful in achieving self-regulating status”<br />
(Trebilcock 1976: 9). The traditional view holds<br />
that were it not for the self-regulatory role of<br />
professional bodies, which forces them to set<br />
high standards and a degree of disinterestedness,<br />
a profession would be no different than a trade<br />
union. Yet, we find evidence suggesting that<br />
regulatory structures are changing, and that selfregulation<br />
is now often measured in degrees. As<br />
society becomes more fragmented, a “decentred”<br />
understanding of regulation, considering the wide<br />
range of different and often blurred regulatory<br />
configurations diffused throughout society, may<br />
become necessary.<br />
2.1 Why regulate?<br />
Correction of so-called ‘market failures’ emerges as the<br />
most common answer to the question, “Why regulate?”<br />
In economic terms market failures include: ‘information<br />
asymmetry,’ ‘credence goods,’ and ‘externalities’:<br />
> Information asymmetry refers to the disparity between<br />
the information held by the service provider versus the<br />
information held by the consumer. Information<br />
asymmetry could lead to market failure where the former<br />
has strong incentives to cut quality with a corresponding<br />
reduction in price.<br />
> Credence goods refers to the intangible nature of<br />
professional services and the difficulty of ascertaining<br />
quality before purchase. Consumers may not be able to<br />
gauge the quality of the service that they have bought,<br />
both due to information asymmetry and the often<br />
ambiguous relationship between the quality of the service<br />
provided and the outcome. The long time it takes for<br />
some advice or services to register or bear fruit can also<br />
be perplexing.<br />
><br />
Externalities refers to the impacts (beneficial or adverse)<br />
on third parties which arise from decisions made by<br />
professionals and their clients (<strong>OF</strong>T 2001).<br />
Regulation aims to remove these market failures at a<br />
reasonable cost in order to improve the efficiency of markets<br />
where trust, transparency and information disclosure are<br />
extremely important.<br />
British Professions Today: The State of the Sector © Spada Limited 2009 9
Changing regulatory structures continued >><br />
Forms of regulation<br />
Regulation of the professions can take many forms. Total<br />
reliance on self-regulation frequently attracts suspicions of foul<br />
play in terms of monopoly, protectionism and administered<br />
markets (Trebilcock 1976). As Lieberman contends: “at first<br />
blush, the claim to self-regulation is strange. We don’t ask<br />
non-playing members of football teams to referee games<br />
involving their teams” (Lieberman 1976). Professionals have<br />
an incentive to impose restrictions upon themselves to<br />
preserve quality standards, thus ensuring that the status and<br />
reputation of their profession is upheld. However, it has often<br />
been noted (most famously by Adam Smith) that an apparent<br />
concern for the public interest may disguise an opportunity to<br />
increase incomes by limiting competition.<br />
Traditionally, a strong focus on ex ante self-regulation has<br />
predominated, whereby the professional body itself sets<br />
prescriptive rules about entry, standards of behaviour and<br />
continuing education. This type of regulation is primarily<br />
designed to prevent the risk of parties offering services which<br />
they are not competent to carry out. Ex ante regulation can<br />
have the effect of damaging competition, particularly inhibiting<br />
the development of new forms of competition. This<br />
argument holds that where professional interests diverge from<br />
those of consumers, there is a risk that the professions will<br />
disguise an opportunity to create monopoly rents for their<br />
members by setting disproportionately stringent ex ante rules,<br />
claiming that such rules are in the public interest (Collins<br />
2006). If that were true, there might be a case for changing<br />
the regulatory balance for the professions, putting more<br />
emphasis on ex post regulation and external regulation.<br />
In ex post regulation professionals are sanctioned for<br />
breaching professional rules or service commitments. Ex post<br />
regulation involves the proactive monitoring of quality<br />
services, handling consumer complaints, punishing miscreants<br />
and ensuring proper redress is available for inadequate<br />
service. Because consumers may not be confident in the<br />
profession’s impartial handling of complaints (amongst other<br />
issues of perceived self-interest), ex post regulation might be<br />
further complemented by external regulation.<br />
The role of an external regulator may take many forms: the<br />
threat of external regulation may be used to condition the<br />
self-regulatory body’s behaviour; an external regulator may<br />
set rules of how a self-regulatory body must function without<br />
being directly involved; or, external and self-regulation may<br />
work alongside each other so that there is a degree of<br />
competition between them. Increased regulation by an<br />
external body has the potential to improve the effectiveness<br />
of both ex ante and ex post self-regulation.<br />
Extensive direct government regulation of the professions is<br />
equally open to scepticism both from the professions, who<br />
have a longstanding pride in their autonomy, and from the<br />
public, who question the government’s ability to regulate<br />
large-scale and highly technical institutions effectively (Ibid.). 3<br />
The benefits of external regulation should be weighed against<br />
those of self-regulation; namely, an understanding of the<br />
market, potential flexibility, lower costs and efficiency, and the<br />
absence of political interference (Collins 2006). Given the<br />
unsatisfactory perceptions within both contexts of selfregulation<br />
and external regulation, it may be the case that<br />
appropriately tempered forms of self-government hold the<br />
competitive advantage.<br />
3 For example, recent research conducted by the Chartered<br />
Insurance Institute (CII) found that over 60% of the general public have<br />
lost confi dence in the government’s ability to control the banking system<br />
(CII 2008).<br />
10
2.2 Historical development<br />
The current structures and governance of professional<br />
bodies are largely a result of their historical development<br />
and the impact of statutory regulation. The economic and<br />
technological advances of the Industrial Revolution, and<br />
consequently the rise in living standards and the growth<br />
of governmental and corporate institutions, meant that<br />
professional expertise was required more than ever before<br />
(Perkin 2002). Professions in Great Britain and other countries<br />
developed gradually from an unrestricted right to practise to<br />
professional self-regulation in the public interest. In the early<br />
19th century virtually no controls existed to restrain those<br />
who called themselves a solicitor, a physician, or an<br />
accountant. Experience proved the need to establish certain<br />
standards of expertise, and these, established by selfregulatory<br />
bodies, enhanced the quality of practitioners to the<br />
benefit of their clients, the public (Younger 1976). Even most<br />
critics of the professions agree that it is necessary to limit<br />
admission to the professions by setting certain standards of<br />
character and competence.<br />
Backlash?<br />
The perceived self-interest of the professions is at the root<br />
of its historical and (some might say) current crises. Criticisms<br />
of professional self-interest hinge on: the drive to monopoly,<br />
contempt for the free market, setting of own fees or salaries<br />
and conditions for service, the exclusivity of an “old boy”<br />
network, and a fundamental conservatism that predicates<br />
unwillingness to reform (Perkin 2002; Burrage 2007). The<br />
National Audit Office (NAO) recently identified the public<br />
concern that undeserving managers and shareholders,<br />
particularly in private sector professions, will take advantage<br />
of regulatory structures to enrich themselves to levels<br />
considered obscene by the public. This has been perfectly<br />
illustrated by the intense debate over whether bonuses should<br />
be paid to bankers following the financial crisis in 2008.<br />
In Britain and the United States the public sector professions<br />
have often been seen as parasitic, a cost rather than a<br />
contributor to society. The dichotomy between public and<br />
private sector professions in Anglo-American society has<br />
grown up around the neo-classical economic work of the likes<br />
of F.A. Hayek and Milton Friedman, who argue that industry<br />
creates the wealth that government (especially welfare)<br />
squanders. Attacks have not been confined to the right; from<br />
the left, the professions have been vilified as self-interested<br />
elites who award themselves overly handsome perks (Titmuss<br />
1960), or even create the problems they claim to solve (Illich<br />
1973). The Russian academic Ivan Illich (in)famously made<br />
perhaps the most extreme attack on the professions: “Like<br />
Spanish Inquisitors they hold the mandate to hunt down those<br />
whom they shall save… The new professionals gain legal<br />
endorsement for creating the need that, by law, they alone<br />
will be allowed to serve” (Ibid. 1977). However, the most<br />
significant backlash against the professions in modern times<br />
undoubtedly came from Margaret Thatcher.<br />
Thatcher’s attacks on the professions<br />
The three Thatcher governments are essential to<br />
understanding the modern evolution of the structure of<br />
British professions. Thatcher’s governments were devastating<br />
for the professions – the first two terms for the public sector<br />
professions, eg medicine and teaching, and the third term for<br />
the legal profession in particular (Burrage 2007). The<br />
Thatcher governments challenged the legal monopolies of<br />
the professions, arguing that the professions should be<br />
required to justify any claims for immunity from legislation<br />
dealing with monopolies (whereas before, the onus of proof<br />
was reversed). Where past administrations had avoided<br />
confrontation with the professions, the Thatcher governments<br />
challenged them head on with proposals for ending restrictive<br />
practices and strengthening the public regulation of<br />
professional bodies (Klein and Day 1996).<br />
British Professions Today: The State of the Sector © Spada Limited 2009 11
Changing regulatory structures continued >><br />
Thatcher’s crusade against professional self-regulation and<br />
later cuts in funding for public sector professions, proved that<br />
despite being Conservative in name, her political programmes<br />
were some of the most radical the country had ever seen<br />
(Burrage 2007). Much of the intellectual theory behind<br />
Thatcher’s policies came from Milton Friedman, an advocate<br />
not only of monetarism but also of breaking the legal<br />
monopoly of the medical and other professions. In his view,<br />
one should pursue the logic of the free market wherever it<br />
may lead, regardless of what it might mean for established<br />
institutions (Klein and Day 1996). In Thatcher’s mind too,<br />
professionals should be competing for customers (rather than<br />
clients or patients) in the free market. Thatcher’s position held<br />
that what the professions actually enjoyed was their high<br />
status; their self-regulation and ethical standards were<br />
nonsensical pretences (Burrage 2007).<br />
Despite her success in breaking the trade unions, Thatcher’s<br />
attacks did not result in changing the structure of professional<br />
bodies. She was, however, responsible for breaking the<br />
traditional political deference to the professions. Her general<br />
tactic has not been changed in subsequent decades, despite<br />
changes in government. In fact, most legislation affecting<br />
professional structures of regulation has been passed in the<br />
past decade, under New Labour governments. 4<br />
The rise of the regulatory state<br />
The 1980s was characterized by the retreat of the state (Cook<br />
and Stevenson 1996) as privatisation changed corporate<br />
markets and government-business relations in the UK (Harris<br />
1999). A new style of politics has emerged, characterized by<br />
the steady rise of legislation and regulation in Western<br />
societies (see, for example, Majone 1994). New issues take<br />
precedence on a legislative agenda moulded by regulating the<br />
operations of businesses, rather than government involvement<br />
via direct ownership of parts of the economy (Ibid.). The<br />
economic reforms ushered in by Thatcher, perhaps once<br />
deemed radically Conservative are now taken as the rule. As<br />
Peter Mandelson famously claimed: “we are all Thatcherites<br />
now” (10 June 2002, in an interview with The Times). 5<br />
Shifts in professional regulatory structures have taken place<br />
within the broader context of a general political shift from<br />
interventionist to regulatory modes of governance within the<br />
European Union. The rise of the ‘regulatory state’ in Europe<br />
has followed two key trends: 1) the decline of ‘positive’ (or<br />
Keynesian/Welfare) state tools of stabilisation and<br />
redistribution (with the highly significant exception of the state<br />
response to the global financial crisis 2008), 6 and 2) the<br />
European Commission’s expansionist role through the use of<br />
policy content given the lack of budgetary tools 7 (Majone 1997).<br />
Because of the reduced role of the interventionist state, we<br />
have seen a corresponding increase in the role of the regulatory<br />
state; in short, ‘rule making is replacing taxing and spending’<br />
(Ibid.). An apparent paradox emerges, as ‘deregulation’ – eg<br />
privatisation and devolved powers – is characterised by<br />
‘re-regulation’ – eg price regulation and competition law.<br />
4 Although, government action in the 1980s and 1990s did liberalise certain<br />
professions, particularly the legal services: legislative changes ended<br />
solicitors’ monopoly on the provision of conveyancing services with the<br />
Administration of Justice Act 1985, permitted authorised practitioners to<br />
undertake certain conveyancing functions in relation to land transactions,<br />
and brought an end to barristers’ monopoly over advocacy in higher<br />
courts and solicitors’ monopoly over litigation by allowing both existing<br />
and new professional bodies to apply for such rights, both with The<br />
Courts and Legal Services Act 1990 (Collins 2006).<br />
5 Mandelson’s full remark was: “Globalisation punishes hard any country<br />
that tries to run its economy by ignoring the realities of the market or<br />
prudent public fi nances. In this strictly narrow sense, and in the urgent<br />
need to remove rigidities and incorporate fl exibility in capital, product,<br />
and labour markets, we are all Thatcherites now” (Ibid.). The current<br />
economic downturn and part nationalisation of the banks has caused<br />
some to revise this position: ‘we are all socialists now’.<br />
6 The social democratic consensus about the role of the positive<br />
state began to crumble in the 1970s when the combination of<br />
unemployment and rising rates of infl ation could not be explained within<br />
Keynesian models (Majone 1997).<br />
7 Roughly one-fi fth of regulation now comes from the EU, and one-third<br />
when national discretion is included (Healey 2006).<br />
12
2.3 Regulated self-regulation<br />
Regulatory structures are becoming more and more<br />
blurred in today’s global, fragmented society. In the past<br />
concrete self-regulation has been a defining characteristic<br />
of a profession; now regulation is referred to in “layers”<br />
and degrees (Kaye 2006). One speaks of a “regulatory<br />
landscape” involving not only actors such as state institutions<br />
(eg ministries, departments, agencies, supra-national bodies<br />
such as the EU, international bodies such as the WTO)<br />
and non-state institutions (eg firms, committees, associations,<br />
and networks) but also economic (eg the market) and social<br />
conditions (eg norms, cognitive frames, technologies).<br />
Regulation can take many forms and can be done via various<br />
instruments and techniques, including but not limited to rules<br />
(national or international), monitoring, sanctioning, trust, the<br />
interaction of rational actors in the market, or the structuring<br />
of social forces (Black 2002). These new processes of<br />
regulation have been termed “regulated self-regulation”<br />
(Kaye 2006), or “meta-regulation” (Scott 2004), both of<br />
which refer to the “decentred” understanding of regulation<br />
deemed necessary in the 21st century (Black 2002).<br />
How has this process developed in Britain? Particularly in<br />
the past decade, the paradigm of professional self-regulation<br />
has been called into question with significant reforming<br />
pressures. The main impetus for British government’s recent<br />
reforms has been the Office of Fair Trading’s (<strong>OF</strong>T) 2001<br />
report, Competition in the Professions. The basis of the<br />
report was a consultation exercise that allowed 93<br />
professional bodies across a whole sector to identify possible<br />
restrictions on competition. The report identified restrictions<br />
arising from law, professional rules, or other sources, and<br />
challenged those responsible to remove the restrictions<br />
unless they could be clearly identified as benefiting customers.<br />
The government was called to address those restrictions<br />
originating in statute; eg to remove the exclusion of<br />
professional rules from the Chapter I prohibition which<br />
existed at the time. The majority of restrictions, however,<br />
were found to originate with self-regulatory organisations<br />
(SROs), who were called upon to either remove or justify<br />
them. 8 Professional bodies were given twelve months to do<br />
so, with the <strong>OF</strong>T threatening to use competition enforcement<br />
powers if rules appearing to infringe UK competition law were<br />
not addressed.<br />
Many of the <strong>OF</strong>T’s identified restrictions were addressed<br />
by professional bodies, such as restrictions on comparative<br />
advertising and restrictions on direct access to the<br />
professional. The <strong>OF</strong>T also found the professions’ arguments<br />
on behalf of certain other restrictions persuasive. However,<br />
some significant restrictions remained unaddressed. This was<br />
the key motivation for the government’s independent reviews<br />
of regulatory reform in specific professions (for example, the<br />
Smith Reports 2002-2005 for the medical profession, the<br />
Clementi Report 2004 for legal professionals, and the Morris<br />
Report 2005 for actuaries), as well as professions taking action<br />
themselves to pre-empt similar reviews (such as the Carsberg<br />
Report 2005 for surveyors). As Phillip Collins, Chairman of<br />
the <strong>OF</strong>T, explains:<br />
“ The <strong>OF</strong>T’s experience has been that<br />
the professions, when confronted with<br />
well articulated arguments, have often<br />
responded to the plausible threat of<br />
enforcement by amending their rules<br />
as requested.”<br />
(Collins 2006, footnote 31 corresponding to section 4.7).<br />
8 “Where restrictions on competition exist, or are proposed, in<br />
relation to a profession, the onus should be on the defenders or<br />
the proponents (eg the Government in the case of some new<br />
form of regulation) to show why the restrictions are essential<br />
and proportionate to achieve their principal purpose, such as<br />
the protection of the consumers, while not unduly restricting competition.<br />
Where the professions maintain self-regulatory powers, competition<br />
agencies can seek to ensure that such powers are subject to independent<br />
oversight by infl uencing Government decisions on the regulatory<br />
framework” (Collins 2006; 8.5).<br />
British Professions Today: The State of the Sector © Spada Limited 2009 13
Changing regulatory structures continued >><br />
Perhaps the most visible of the British reforms are the<br />
government-imposed new regulatory models of “front-line<br />
regulators.” Front-line regulators are accountable to a new tier<br />
of sectoral “meso-regulators” across key professional<br />
industries such as law, accounting, and healthcare (Kaye 2006).<br />
These “meso-regulators,” eg the Council for Healthcare<br />
Regulatory Excellence (CHRE), the Financial Reporting<br />
Council (FRC), and the Legal Services Board (LSB), answer to<br />
the government rather than to the regulated profession. They<br />
are charged with providing the sustained oversight to the<br />
front-line regulators which central government agencies lack<br />
the specialization to offer. Such bodies have been designed<br />
expressly to address concerns about traditional regulators,<br />
namely that self-regulatory bodies have been more responsive<br />
to practitioners’ concerns than those of the general public.<br />
The specific regulatory functions of the new tier of “mesoregulators”<br />
remain ambiguous. One of the most important<br />
powers to emerge has been the ability to question front-line<br />
regulators’ disciplinary decisions (Kaye 2006).<br />
2.4 Case study: the legal professions<br />
The legal professions are an interesting case study with regards<br />
to regulation for two reasons: 1) the review of legal services’<br />
regulatory structures has affected multiple professional bodies,<br />
and these entities have responded differently; and 2) law and<br />
regulation have a complex relationship, being intimately bound up<br />
with one another. As Scott states, “If regulation can be conceived<br />
of as the processes through which conduct is sought to be<br />
controlled through systematic oversight by reference to rules then,<br />
with many regimes, law supplies both the substantive rules and<br />
the procedural rules governing monitoring and enforcement”<br />
(Ibid. 2004).<br />
The legal professions have been under increased scrutiny since<br />
the Thatcher governments, with enquiries coming to a head in a<br />
government-sponsored independent review in 2004. The review,<br />
led by Sir David Clementi, considered what regulatory framework<br />
would best promote competition, innovation and the public and<br />
consumer interest in legal services.<br />
The legal professions were considered by many to be one of<br />
the last bastions of professional self-regulation (Kaye 2005).<br />
Leading up to the Clementi review, the Department for<br />
Constitutional Affairs (DCA) argued that the sector was<br />
“one of the last examples of a self-regulatory system in which<br />
primary accountability is to the regulated providers through<br />
their trade associations rather than the public” (“Government<br />
Conclusions…” 2003).<br />
14
The Clementi review concluded that the legal professions’<br />
regulatory systems were flawed as a result of: the governance<br />
structures of the main front-line bodies being inappropriate for<br />
the regulatory task they faced; the over-complex and inconsistent<br />
system of oversight regulatory arrangements for existing front-line<br />
regulatory bodies; there being no clear objectives and principles<br />
which underlie this regulatory system; and, the system not having<br />
sufficient regard to consumers (Collins 2006).<br />
The main recommendations of the report were accepted by the<br />
government and set forth in the Legal Services Bill, which received<br />
Royal Assent on 30 October 2007. The Legal Services Act (LSA)<br />
provides for a single external oversight regulator in legal services<br />
called the Legal Services Board (LSB) to provide consistent<br />
regulation of professional bodies such as the Law Society and the<br />
Bar Council. The LSB may be considered a meso-regulator, along<br />
the lines of the FRC or the CHRE.<br />
The Act also requires professional bodies to make governance<br />
arrangements separating their regulatory and representative<br />
functions. The ring-fenced regulatory bodies will retain day-to-day<br />
regulatory functions, but consumer complaints will be delegated<br />
to a single independent body, to be called the Office for Legal<br />
Complaints (OLC). Finally, the LSA lifts restrictions on alternative<br />
business structures that could allow different types of lawyers<br />
and non-lawyers managing and owning legal practices in order to<br />
enable them to adapt business structures to meet consumer needs<br />
(Collins 2006).<br />
In response to the Clementi review, and in anticipation of the<br />
changes required, both the Law Society and the Bar Council have<br />
ring-fenced their regulatory and representative functions. In 2006,<br />
the Bar Council separated its regulatory function with the creation<br />
of the Bar Standards Board (BSB). This Board has entirely<br />
separate membership from the Bar Council, and a lay chair.<br />
The BSB has final say on all changes to the Code of Conduct and<br />
other regulatory processes, including consumer complaints, which<br />
are handled by the Complaints Committee and overseen by the<br />
independent Complaints Commissioner.<br />
The Law Society also separated its regulatory function after<br />
Clementi, establishing the independent Solicitors Regulation<br />
Authority (SRA) in January 2007 (previously called the Law Society<br />
Regulation Board). The SRA is composed of all non-Council<br />
members, with eight solicitor and seven lay members, and a<br />
solicitor Chair. The SRA handles all regulatory functions, including<br />
setting the standards for qualifying as a solicitor, drafting rules of<br />
professional conduct, administering the roll of solicitors, and<br />
investigating (non-consumer) concerns about solicitors’ standards<br />
of practice.<br />
British Professions Today: The State of the Sector © Spada Limited 2009 15
Changing regulatory structures continued >><br />
Complaints about solicitors are handled by the independent Legal<br />
Complaints Service (LCS), previously known as the Consumer<br />
Complaints Service (CCS) and before that, the Office for<br />
Supervision of Solicitors (OSS). The LCS Board consists of seven<br />
lay and six solicitor members, with a lay Chair. Whilst the Bar<br />
Standards Board hopes to retain its complaints handling function,<br />
the Law Society recognises that the LCS is transitory and<br />
handling of consumer complaints will pass to the Office of<br />
Legal Complaints in a few years’ time (Chapman 2007).<br />
The nature of the legal services professions’ regulatory structures<br />
may be different from the other professions due to the relationship<br />
between law and regulation. Law is written (by legal professionals)<br />
and enforced by agencies and others on the ground. The question<br />
of how law itself is regulated is necessarily complex. To what<br />
extent is modern law autonomous, and what is the role of wider<br />
social and economic activities in steering law? Much regulation is<br />
oriented towards law (eg ‘command and control’), but regulation<br />
can be achieved through other mechanisms. A delicate balance is<br />
needed to ensure that law is neither dominant nor unimportant in<br />
regulation (Scott 2004). Some contemporary scholars have<br />
suggested that “regulated self-regulation” like the new structures<br />
proposed by the LSA may provide a middle path which is also<br />
able to accommodate the pluralism of many regulatory systems<br />
(Parker et al. 2004).<br />
Although many have faith in the proposed structures, criticisms<br />
have already been raised about the Legal Services Board’s<br />
potential regulatory power. One can only speculate about how well<br />
the new system will function when the Act takes full effect in 2-3<br />
years. The LSB is not intended to be a mega-regulator along the<br />
lines of the Financial Services Authority (FSA). While the FSA<br />
spends roughly £200 million per annum on regulatory activities,<br />
the budget of the LSB is estimated at £4.5 million annually.<br />
However, the events of 2008 suggest that the FSA’s big budget<br />
has been no guarantee of its effectiveness as a regulator.<br />
The LSB’s power lies in its leverage over the regulatory activities<br />
of the professional bodies; yet, these will reduce their selfregulatory<br />
activities once the legislation is passed. The LSB will<br />
be expected to develop its own regulatory expertise and offer the<br />
“sustained and focused control” that central government cannot,<br />
eg acting as an appellate mechanism for the fitness of practice<br />
decisions of front-line regulators, or ordering a front-line regulator<br />
to change its rules. The possibility of LSB intervention to change<br />
a front-line regulator’s rules has been criticised with speculation<br />
that it may encourage such regulators to leave tough decisions to<br />
the LSB. A new tier of regulation may shift power, and regulatory<br />
expectations, upward, without appropriate resources allocated to<br />
make effective decisions (Kaye 2005).<br />
The questions raised in the legal professions’ regulatory<br />
development are applicable to any of the professional bodies<br />
faced with expanding, decentred regulation. Professional bodies<br />
face a trade-off: is alleviating the risk of market failures which<br />
are inherent in the principles of self-regulation worth risking new<br />
dangers of ineffective regulation due to blurred remits of<br />
multiple oversight bodies and scattered resources? How far are<br />
professional bodies content to rely upon the market to protect<br />
consumer interests?<br />
16
3The professional economy >>
The professional economy >><br />
All things will be produced in superior<br />
quantity and quality, and with greater<br />
ease, when each man works at a single<br />
occupation, in accordance with his<br />
natural gifts, and at the right moment,<br />
without meddling with anything else.<br />
Plato, 427-347 BCE<br />
How, and to what extent, do the professions<br />
contribute to the growth of the British and<br />
European economies?<br />
In the absence of a clear operational definition<br />
of the professional sector, we must rely upon<br />
proxies (or substitutes) to measure the<br />
professions’ contributions to the British economy.<br />
No document or dataset currently exists that<br />
accurately measures the true value of the<br />
professional sector to the UK economy – by<br />
Sir Alan Langlands’ definition of ‘profession’ or<br />
any other. The fact that comprehensive statistics<br />
on the professional economy are not available is<br />
an important finding in and of itself.<br />
Data disclaimer<br />
We use the Standard Industrial Classification (SIC) 74, “Law,<br />
accounting, architecture, and other business activities not<br />
elsewhere classified,” as the best extant proxy for the<br />
professional services sector. 9 SIC 74 includes most of the<br />
occupations generally considered “professional:” the legal<br />
profession (including barristers, solicitors, and other legal<br />
professionals), accountancy, tax consultancy, financial<br />
management, general management consultancy, architecture,<br />
surveying, urban planning, engineering, technical consulting,<br />
advertising, market research, public relations, and labour<br />
recruitment and provision of personnel.<br />
However, SIC 74 also includes occupations that one would<br />
not generally consider to be professional, many of which do<br />
not have a specific public interest remit (eg investigation and<br />
security activities, industrial cleaning, photographic activities,<br />
and call centre activities). The classification also leaves out<br />
many occupations that might be considered professional:<br />
notably, real estate, financial services such as banks, insurance,<br />
and fund management, and the public sector professions,<br />
eg teaching and medicine.<br />
9 The Standard Industrial Classifi cation is identical to the EUROSTAT<br />
System NACE at the four digit class level and the United Nations system<br />
ISIC at the two digit Divisional level. The SIC was recently reviewed, and a<br />
series of consultations resulted in a major revision (2007). Although<br />
technically new classifi cations have been in effect as of 1 January 2008,<br />
most statistical bodies have not yet made the change from the old SIC<br />
(2003). Accordingly, all data used in this report refer to SIC 2003.<br />
18
Our data has been sourced from the Office of National<br />
Statistics (ONS), including the Pink Book 2007 and the Blue<br />
Book 2007, and the Sector Skills Development Agency (SSDA)<br />
data matrix, a comprehensive source of key labour market<br />
data by sector, in July 2008. 10 The SSDA matrix contains data<br />
from the ONS (including the Labour Force Survey, Annual<br />
Business Inquiry, Annual Survey of Hours and Earnings, and<br />
the Inter-Departmental Business Registry) and employer skills<br />
surveys from England, Wales, Northern Ireland and Scotland.<br />
Data reliability has been maintained by adhering to the<br />
guidance provided by the administrator or owner of the data<br />
set used. The SSDA is not able to control or verify the<br />
accuracy of the raw data used, therefore neither the SSDA<br />
nor the authors of this report can give any warranty as to<br />
the accuracy of the data and shall not be liable for any use of<br />
the data.<br />
3.1 Output<br />
Output, the total value of goods and services produced, is<br />
an important estimate of the whole economy’s welfare.<br />
The professional sector accounts for the largest single share<br />
of UK output (in UK real GDP), contributing 8% of total UK<br />
output (IER 2006/ SSDA Sector Skills Matrix 2008).<br />
The impact of recession notwithstanding, the sector is<br />
predicted to have a comparatively high level of long-term<br />
output growth. Professional services expanded at an<br />
impressive annual rate of 6.1% per annum between 1994<br />
and 2004. This growth is forecast to moderate to 3.4% per<br />
annum in the forecast period 2004-2014. One can compare<br />
this to the rate of output growth of the whole economy,<br />
3.0% average annual increase in UK GDP over the 1994-2004<br />
period, and forecast to grow at 2.4% per annum in<br />
the 2004-2014 period (IER 2006/SSDA Sector Skills<br />
Almanac 2007).<br />
10 Following the closure of the SSDA, the Sector Skills Matrix went offl ine in<br />
July 2008. The SSDA has been replaced by the UK Commission for<br />
Employment and Skills (UKCES). The UKCES will be developing a web<br />
based Labour Market Information (LMI) tool in 2009. More information on<br />
the UKCES’ LMI products and services will be available from the Research<br />
section of its website (www.ukces.org.uk) in due course.<br />
Percentage of total UK output<br />
(real UK GDP) by sector<br />
9<br />
8<br />
7<br />
6<br />
5<br />
4<br />
3<br />
6.3 6.3<br />
5.9<br />
5.0 5.1 5.1 5.3 5.4<br />
7.7 7.9<br />
7.2<br />
2<br />
3.8 3.9<br />
3.2 3.3 3.3<br />
2.4 2.4<br />
1<br />
1.7 1.8 1.8 1.9<br />
0.6 0.7 0.7 1.1 0.4<br />
0<br />
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27<br />
Source: IER 2006/SSDA Sector Skills Matrix 2008<br />
* Professions in group “Law, accounting, architecture, and other business activities”<br />
1 Mining and quarrying<br />
2 Textiles and textile products<br />
3 Wood, pulp and paper products<br />
4 Furniture, jewellery, musical instruments, sports goods,<br />
games and toys; recycling<br />
5 Agriculture, hunting, forestry, fishing<br />
6 Basic metals and fabricated metal products<br />
7 Publishing, printing and reproduction of recorded media<br />
8 Electricity, gas, water supply<br />
9 Transport equipment<br />
10 Food, drink and tobacco<br />
11 Sale, maintenance and repair of motor vehicles; fuel retail<br />
12 Machinery, electrical and optical equipment<br />
13 Post and telecommunications<br />
14 Computer and related activities<br />
15 Hotels and restaurants<br />
16 Coke, petrol, nuclear fuel, chemicals, rubber, plastics, glass,<br />
ceramics and cement<br />
17 Financial services<br />
18 Wholesale trade<br />
19 Transport<br />
20 Community, social, personal service activities<br />
21 Public admin and defence; compulsory social security<br />
22 Education<br />
23 Construction<br />
24 Retail trade<br />
25 Health and social work<br />
26 Real estate, renting and research and development<br />
27 Law, accounting, architecture and other business activities<br />
British Professions Today: The State of the Sector © Spada Limited 2009 19
The professional economy continued >><br />
3.2 Business creation<br />
The number of new businesses registered each year indicates<br />
the approximate rate of new business creation, a measure<br />
of ‘entrepreneurialism,’ the state of business optimism, and<br />
(inversely) barriers to market entry.<br />
VAT registrations and deregistrations<br />
as a percentage of stock<br />
16<br />
14<br />
Deregulations<br />
Registrations<br />
Business creation has been relatively high in the professional<br />
sector, with VAT registrations as a percentage of stock<br />
exceeding deregistrations, indicating a marginal expansion in<br />
total stock. Of the 371,235 registered professional businesses,<br />
VAT registrations account for 11.1% of stock, while<br />
deregistrations account for 7.8%. The stock of businesses is<br />
the largest single block in the British economy (IDBR 2006/<br />
SSDA Sector Skills Matrix 2008).<br />
12<br />
10<br />
8<br />
13.5<br />
12.7<br />
6<br />
11.4<br />
10.8<br />
11.1<br />
10.1 9.8 10 10<br />
4<br />
8.3<br />
8.6<br />
7.8 8.0 7.9 8.0<br />
7.4<br />
7.1 7.3<br />
7.5<br />
6.7<br />
6.8<br />
6.8 7.0<br />
6.0<br />
5.4<br />
2 4.4<br />
4.1<br />
2.7<br />
1.0<br />
0<br />
0.5<br />
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15<br />
Source: IDBR 2006/SSDA Sector Skills Matrix 2008<br />
1 Community, social, personal service activities<br />
2 Health and social work<br />
3 Education<br />
4 Public admin and defence; compulsory social security<br />
5 Law, accounting, architecture and other business activities<br />
6 Real estate, renting and research and development<br />
7 Financial services<br />
8 Wholesale and retail trade<br />
9 Transport, storage and communications<br />
10 Hotels and restaurants<br />
11 Construction<br />
12 Electricity, gas, water supply<br />
13 Mining and quarrying<br />
14 Agriculture, hunting, forestry, fishing<br />
15 Manufacturing<br />
20
3.3 Productivity<br />
Industry productivity is measured in terms of Gross Value<br />
Added (GVA), the contribution to the economy of each<br />
sector and an important measure in GDP estimation. The<br />
link between GVA and GDP can be defined as: GVA + taxes<br />
on products – subsidies on products = GDP. The source of<br />
sustainable GVA in a sector is the willingness of customers to<br />
pay substantially more for the value they perceive in a<br />
company’s products and/or services than the company paid<br />
for the goods and services it used in creating them.<br />
Output per employed job by sector<br />
(£000s, current prices)<br />
Productivity in the sector is average for the economy, both<br />
domestically and internationally. The professional sector’s<br />
GVA per employed job is £38,000, compared to £33,000 for<br />
the whole economy (ABI 2006/SSDA Sector Skills Matrix<br />
2008). Productivity in the sector was projected to grow at an<br />
average annual rate of 2% over the period 2004-2009, the<br />
same rate as productivity in the whole economy is projected<br />
to grow (IER 2006/SSDA Sector Skills Matrix 2008).<br />
Indexes comparing the UK to the EU and the US find that<br />
productivity per worker per hour is lower for the professions<br />
in the UK than competitor nations. Sector productivity is 83%<br />
of EA15 levels and 80% of US levels, measured in output<br />
(GVA) per hour worked based on purchasing power parity<br />
(Experian 2006, Groningen Growth and Development Centre,<br />
60 Industry database).<br />
Agriculture, hunting, forestry, fishing – 27<br />
Manufacturing – 48<br />
Community, social, personal service activities – 32<br />
Health and social work – 14<br />
Education – 2<br />
Law, accounting, architecture and other business activities – 38<br />
Real estate, renting, research and development – 39<br />
Wholesale and retail trade – 32<br />
Transport, storage and communications – 55<br />
Hotels and restaurants – 16<br />
Construction – 49<br />
Electricity, gas, water supply – 187<br />
Mining and quarrying – 362<br />
Source: IER 2006/SSDA Sector Skills Matrix 2008<br />
British Professions Today: The State of the Sector © Spada Limited 2009 21
The professional economy continued >><br />
3.4 Balance of payments and trade<br />
The balance of payments and trade measures economic<br />
transactions between UK residents and the rest of the world,<br />
an important indicator in the broader systematic set of the<br />
UK national accounts. The professional sector accounts for<br />
£15,849 million of British trade in services, or over half of<br />
the total £29,194 million (balance of accounts, as credits less<br />
debits) (The Pink Book 2007).<br />
2006 balance of payments,<br />
trade in services (£ million)<br />
25,000<br />
20,000<br />
15,000<br />
10,000<br />
22,575<br />
15,849<br />
Comparatively, trade in goods contributed -£83,631 million,<br />
leaving the balance of total trade in goods and services at<br />
-£54,437 million. The surplus on ‘invisible’ or services trade<br />
has significantly offset trade in goods deficit for most of the<br />
past decade.<br />
5,000<br />
0<br />
-5,000<br />
-2722<br />
290 129<br />
2,565<br />
3,831<br />
1,974<br />
1,285<br />
604<br />
2006 balance of payments,<br />
other business services (£ million)<br />
-10,000<br />
16,000<br />
14,000<br />
12,000<br />
10,000<br />
8,000<br />
6,000<br />
4,000<br />
3,119<br />
2,092<br />
2,380<br />
2,553<br />
2,000<br />
1,384<br />
936<br />
778<br />
794<br />
166<br />
0<br />
1 2 3 4 5 6 7 8 9 10<br />
1 Legal<br />
2 Accounting<br />
3 Business management and management consulting<br />
4 Advertising and market research<br />
5 Research and development<br />
6 Architectural, engineering, and other technical services<br />
7 Agricultural, mining and on-site processing<br />
8 Services between affiliated enterprises<br />
9 Other<br />
10 Total miscellaneous business, professional,<br />
and technical services<br />
14,202<br />
-15,000<br />
-20,000<br />
-15,978<br />
Transportation<br />
Travel<br />
Communications<br />
Construction<br />
Insurance<br />
Financial<br />
Computer and information<br />
Royalties and license fees<br />
Other business<br />
Personal, cultural and recreational<br />
Government<br />
Source: The Pink Book 2007, Table 3.1: Trade in Services Summary Table (pp. 34; data from 2006)<br />
*Professions in group “Other business”<br />
22
3.5 Employment<br />
A considerable portion of the professions’ contributions to<br />
the UK economy is represented by the opportunities they<br />
create for employment.<br />
The professional sector is the largest employer in the<br />
UK, with 11.5% of total employment (IER 2006/SSDA Sector<br />
Skills Matrix 2008). Total employment stands at 3,465,000<br />
(Ibid.). By comparison, the second largest employer is the<br />
Percentage of total UK employment<br />
by sector<br />
14<br />
12<br />
10<br />
8<br />
6<br />
4<br />
6.2 6.5 6.9 8.1<br />
10.4 10.7 11.5<br />
5.1<br />
2<br />
3.9 4.2 4.3<br />
0.2 0.4 0.6 0.6 0.8 1.2 1.3 1.4 1.5 1.6 1.8 1.8 2.0 2.1 2.3 2.6<br />
0<br />
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27<br />
health and social work sector, making up 10.7% of total UK<br />
employment (IER 2006/SSDA Sector Skills Matrix 2008).<br />
The professions have been a growing industry with 2.5%<br />
average annual past employment growth 1999-2004. The<br />
workforce has been projected to grow at an average rate of<br />
1.6% per annum 2004-2009, compared to workforce growth<br />
of 0.4% over the whole economy. Strong employment<br />
growth in the sector has been a trend across Europe, with<br />
the professions boasting the highest annual average growth<br />
of employment (4.0%) in services in the EU27 from 2002<br />
to 2007 (Eurostat 2008).<br />
3.6 UK professions in Europe<br />
Professions comprise 3.9 million enterprises in Europe,<br />
together generating EUR 739.6 billion of value added and<br />
employing 19.4 million persons in 2004 (Eurostat 2008).<br />
The UK was by far the largest contributor to the EU27’s<br />
professional sector in 2004, with EUR 203.5 billion of value<br />
added. It generated 27.5% of the EU27’s sectoral value added<br />
and employed 19.5% of its workforce. The UK is the most<br />
professionally specialised Member State, with professions<br />
contributing 21.1% of non-financial business economy<br />
value added, compared with the EU27’s average of 14.5%<br />
(Eurostat 2007).<br />
1 Mining and quarrying<br />
2 Electricity, gas, water supply<br />
3 Textiles and textile products<br />
4 Wood, pulp and paper products<br />
5 Furniture, jewellery, musical<br />
instruments, sports goods,<br />
games and toys; recycling<br />
6 Transport equipment<br />
7 Publishing, printing and reproduction<br />
of recorded media<br />
8 Agriculture, hunting, forestry, fishing<br />
9 Food, drink and tobacco<br />
10 Basic metals and fabricated<br />
metal products<br />
11 Post and telecommunications<br />
12 Computer and related activities<br />
13 Coke, petrol, nuclear fuel,<br />
chemicals, rubber, plastics, glass,<br />
ceramics and cement<br />
14 Sale, maintenance and repair<br />
of motor vehicles; fuel retail<br />
15 Machinery, electrical and optical<br />
equipment<br />
16 Real estate, renting and research<br />
and development<br />
17 Financial services<br />
18 Wholesale trade<br />
19 Transport<br />
20 Public admin and defence;<br />
compulsory social security<br />
21 Community, social, personal<br />
service activities<br />
22 Hotels and restaurants<br />
23 Construction<br />
24 Education<br />
25 Retail trade<br />
26 Health and social work<br />
27 Law, accounting, architecture<br />
and other business activities<br />
British Professions Today: The State of the Sector © Spada Limited 2009 23
4Social and political contributions
Social and political contributions >><br />
To depend upon a profession is a less<br />
odious form of slavery than to depend<br />
upon a father.<br />
Virginia Woolf, Three Guineas, 1938<br />
The professions have played a big role in pushing<br />
society to achieve a more meritocratic society,<br />
where people are judged on skills rather than<br />
social class. Because professionals are typically<br />
amongst the most educated groups of society,<br />
people and governments often look to them to set<br />
standards. As trusted experts, professionals have<br />
a unique opportunity to be highly influential in the<br />
public sphere. Professions as a group help shape<br />
ways of thinking about problems which fall within<br />
their realm of technical expertise (Dingwall and<br />
Lewis 1983). However, the political role of the<br />
professions is a murky picture. They are either<br />
seen as businesses or lobbyists, their commitment<br />
to the public interest often mistrusted. In today’s<br />
changing political environment, where public<br />
opinion and the “spin” of media commentary are<br />
more important than ever before, stable<br />
democracy needs the technical expertise that<br />
professions offer.<br />
4.1 Social mobility<br />
Social mobility, considered by many to be a measure<br />
of the extent of a society’s equality of economic and social<br />
opportunity, has increased enormously since the rise of the<br />
professional class. Professional societies have developed<br />
differently across cultures, evolving in accordance with<br />
different values, social norms, political cultures, and economic<br />
resources. In Europe the professions arose along with the<br />
bureaucratic and administrative apparatus of the state. In<br />
England and America, conversely, the professions emerged<br />
out of a competitive struggle for special legal privileges and<br />
favourable market positions, rather than becoming appendices<br />
of a centralised state (Jennings et al. 1987).<br />
Despite such differences, all post-industrial nations have in<br />
common some major trends that characterise professional<br />
societies. Professional societies put most of their man- and<br />
woman-power into services rather than agriculture and<br />
manufacturing. The UK economy made this transition early,<br />
and the economy continues to be dominated by service<br />
provision. The latest statistics show that the services sector<br />
continues to grow, with 80% of the workforce employed in<br />
services-producing sectors, compared to 72% in 2000 (ONS<br />
Labour Force Survey August 2008). Professional societies<br />
raise living standards for all, not just for the few. The rise of<br />
professional society has made the UK much wealthier as a<br />
nation. GDP per head has almost trebled in real terms in<br />
the last generation alone, from £6,960 in 1957 to £19,978<br />
in 2006 (ONS Time Series Data).<br />
British Professions Today: The State of the Sector © Spada Limited 2009 25
Social and political contributions continued >><br />
In professional societies meritocracy is, at least in<br />
theory, substituted for class as the basis of social structure.<br />
Consequently, social mobility increases, and women are<br />
incorporated into the workplace, achieving new levels of<br />
liberty. Britain’s labour force has seen a marked increase in<br />
the number of jobs performed by women since the rise of<br />
professional society. Over the last two decades alone women<br />
have closed a big gap: in 1981 men filled 3.2 million more jobs<br />
than women, whereas now the numbers are almost equal,<br />
with men filling 12.8 and women 12.7 million jobs (though<br />
nearly half of women’s jobs are part time, and women are<br />
still much more likely to do administrative or secretarial work<br />
than men) (LFS 2002).<br />
Government, too, expands to provide the universal benefits<br />
of a welfare state. Government administration has grown<br />
substantially over the past two decades, despite reducing the<br />
number of direct employees (eg civil servants) (Hood et al.<br />
1999). The provision of higher education is particularly<br />
important in order to create human capital (Perkin 1996). In<br />
the UK, greater access to higher education has been made<br />
available largely by the upgrading of colleges and polytechnics<br />
to university status (Perkin 2002).<br />
Evidence suggests that whilst social mobility and access to<br />
the professions is an ongoing concern, the professions have<br />
a comparatively good record for setting clear, meritocratic<br />
entry standards and working to help individuals from all<br />
backgrounds reach them. Still, the connection between<br />
professional societies and progress towards meritocracy is<br />
under-studied, and a subject worthy of further research.<br />
Today, the UK ranks near the bottom of a comparison of<br />
social mobility in Europe and the US, with lower social<br />
mobility than many advanced nations (save for the US)<br />
(Blanden et al. 2005). Do professional skills and qualification<br />
structures have the capacity to boost lagging social mobility?<br />
Research which charts the evolution, and establishes variables<br />
of causation, could measure the professions’ potential roles in<br />
pushing society forward towards greater equality and social<br />
justice in the future.<br />
Gateways to the professions<br />
The Labour government signalled its commitment to social<br />
mobility through improved access to the professions with the<br />
Gateways to the Professions initiative, which arose from<br />
Sir Alan Langlands’ report 2005. The Langlands report<br />
examined the potential impact of variable fees in terms of<br />
access to the professions. Key issues facing access to the<br />
professions were found to be: outdated, stereotypical<br />
perceptions of the professions, accumulation of student debt,<br />
length of study, and retention, particularly of women in those<br />
professions which lack flexible or “family-friendly” work<br />
practices (Ibid.).<br />
The government accepted all of Sir Alan’s recommendations<br />
and has taken action on a number of fronts, including the<br />
creation of a “Gateways to the Professions Development<br />
Fund.” The fund provided up to £6 million over three years<br />
(up to March 2008) to support projects that tackle the full<br />
range of issues and barriers faced by people seeking to enter<br />
the professions through higher education. Individual<br />
professions have also developed a range of their own<br />
initiatives to breaking down barriers to their professions.<br />
A collaborative forum of representatives from professional<br />
bodies continues to meet to share and develop strategies<br />
which will support access to the professions. The professions<br />
must continue to work alongside current government<br />
programmes and structures (particularly school systems), not<br />
to mention ingrained systems of hierarchy and tradition, to<br />
make access for all a reality.<br />
26
Civil society<br />
Given the decline in deference and shift in values over recent<br />
years, those trusted professionals who can break through<br />
citizens’ automatic scepticism or cynicism occupy a privileged<br />
position in society. Scholars in the social capital tradition<br />
consider trust to be a fundamental characteristic of effective<br />
democracy (Putnam 1993). Though trust is in many ways an<br />
intangible quality, people have clear and measurable opinions<br />
about the trustworthiness of various occupations. If<br />
democracy depends upon high levels of interpersonal trust, it<br />
is perhaps worrying that trustworthiness is a quality citizens<br />
find lacking in their legislators (Ipsos MORI 2007). The<br />
comparative, albeit recently declining, trust endowed in<br />
professionals suggests that society may welcome the<br />
amplification of their advice and consultation to social and<br />
political institutions. Professionals might build upon their<br />
integral contributions to charitable, sporting and social clubs<br />
– contributions which shore up civil society – to play a larger<br />
political and social role, in collaboration with government, the<br />
civil service, consumer groups, and the third sector.<br />
Our research finds that professionals have an important role<br />
in setting societal benchmarks, eg putting forth the initial test<br />
cases which change legal precedents in common law. Although<br />
influential people may come from a range of backgrounds, and<br />
are not necessarily differentiated by age or gender or any<br />
other demographic characteristics, what does differentiate<br />
them, according to recent research, is: 1) being gregarious/<br />
outgoing; 2) being part of a number of networks; and 3)<br />
being well-read/having expertise (Duffy and Pierce 2007).<br />
Professionals have expertise, a prerequisite to socio-political<br />
influence, and (almost always) built-in networks of<br />
professional colleagues and clients. Of course, not all<br />
professionals will be, or want to be, socio-political influencers;<br />
however, their status, knowledge, and networks make them<br />
well placed to do so. In fact, they may even underestimate<br />
their own influence. Additional research to quantify the<br />
professions’ contributions to broader society and to measure<br />
their collective leverage might further clarify the potential<br />
scope of the professions’ future socio-political role.<br />
4.2 Political consultation<br />
Radical academic Ivan Illich once categorised professions<br />
as cartels which dominate modern society (Ibid. 1977). His<br />
modern-day disciples might include the likes of Prem Sikka,<br />
who claims that, “the aim of the International Accounting<br />
Standards Board (IASB) is nothing less than global domination<br />
and to make the rest in the image of the West, fit for major<br />
corporations” (The Guardian 29 August 2007). Turning to the<br />
other extreme, government often underestimates professional<br />
expertise and influence. The fact that the ONS and other<br />
official sources do not collect statistics on the professions<br />
as a group suggests that the state has not recognised the<br />
significance of the professional sector.<br />
The reality of the professions’ political influence surely<br />
lies somewhere in between. Professional bodies are key<br />
institutions for post-industrial states founded on liberal<br />
principles, providing an effective method of regulating<br />
certain spheres of economic life without developing an<br />
oppressive central bureaucracy. Just as professions are<br />
(partially) regulated by government, vice versa, professions<br />
have a role to play in moderating government. The professions<br />
provide another “check and balance” on government,<br />
with its tendency to centralise power and to produce<br />
increasing quantities of legislation and regulation in an ad hoc,<br />
reactive fashion.<br />
Professional bodies have key roles to play in the political<br />
consultation process. They also provide an important<br />
counterweight to centralised government administration<br />
through their systems of self-regulation. Without them, a<br />
sophisticated law-based liberal society and late-stage economy<br />
could not function. As Frits Bolkestein, EU Internal Market<br />
Commissioner, states: “Economies only work if companies are<br />
run efficiently and transparently. We have seen vividly what<br />
happens if they are not: investment and jobs will be lost – and,<br />
in the worst cases, of which there are too many, shareholders,<br />
employees, creditors and the public are ripped off ” (quoted in<br />
Gosschalk and Hyde 2003).<br />
British Professions Today: The State of the Sector © Spada Limited 2009 27
Social and political contributions continued >><br />
There is an essential difference separating the political goals of<br />
a professional membership body from a professional firm. The<br />
former has a public interest remit, evidenced by self-regulatory<br />
functions to maintain quality standards, often via Royal Charter<br />
membership, whilst the latter is a business, concerned<br />
primarily with commercial interests. The public interest is the<br />
top priority in professional bodies’ political consultation, even<br />
over members’ (short-term) interests when the two conflict<br />
(Craig 2007; McAdoo 2007; Labrey 2007; Hatcher 2007;<br />
Chapman 2007). In fact, most professional bodies do not see<br />
a conflict at all between the public interest and professional<br />
members’ long-term interests because professionals must<br />
maintain the public trust in order to survive.<br />
Two types of policy consultation<br />
The processes involved in political consultation vary according<br />
to the issue. Broadly speaking, there are two types of policy<br />
consultation: 1) responsive, when a professional body is called<br />
to consult or advise the government on a relevant policy issue;<br />
and 2) proactive, when a professional body goes to the<br />
government with advice on a policy which may be on the<br />
agenda sometime in the future. Professional bodies initiate<br />
projects and influence governments, but more often<br />
professions are responding to external demands for change,<br />
which can be social, economic, and political.<br />
The formal process of political consultation does not differ<br />
greatly across the professions. It consists of monitoring<br />
government, assessing the situation to evaluate which actions or<br />
proposals merit responses in light of limited resources, advising<br />
on how to argue the platform in terms of wider political<br />
engagement, and facilitating the discussion between members<br />
of the profession and the state (McAdoo 2007; Labrey 2007).<br />
The role of the public affairs and policy teams of professional<br />
bodies is to determine where and how their organisation can<br />
participate in the debate, what the key platforms are for the<br />
public interest, how to engage them, and marshalling<br />
membership to do so. Members are typically willing and eager<br />
to participate in the government consultation process, and do<br />
so pro bono. Members, and firms, are likely to be willing to<br />
provide their time and expertise free of charge because they<br />
see the value in helping to shape public policy (Ibid.)<br />
The informal process of political consultation occurs when a<br />
professional body sees a gap or a problem which may not be<br />
on the government’s agenda but should be (Craig 2007). This<br />
form of communication and advice is non-traditional for most<br />
professional bodies (Craig 2007; Hatcher 2007; McAdoo<br />
2007; Labrey 2007; Chapman 2007). Still, most see significant<br />
value in becoming more proactive in their approach. Forward<br />
thinking allows professions to get involved with the agendasetting<br />
before ideas develop into (much more inflexible) policy<br />
proposals (Chapman 2007).<br />
Quantifying professional influence<br />
Too often professional bodies are overlooked when it<br />
comes to making complex, technical policy decisions relevant<br />
to their fields of expertise. The case of Home Information<br />
Packs (on page 30) is one instance in which consultation with<br />
the relevant professional body might well have resulted in a<br />
better-designed policy to achieve the government’s aims<br />
of simplifying the property-buying process. One way of<br />
evaluating the impact of professional bodies is to measure<br />
the number of times professional bodies are mentioned in<br />
parliamentary debate, committee hearings, written<br />
statements and other official transcripts. 11 This analysis does<br />
not capture many facets of the consultation process, such as<br />
informal meetings and behind-the-scenes counsel. Still, the<br />
mention of a professional body in parliamentary debate is<br />
one indication of political influence. The following chart<br />
compares the average yearly number of references of four<br />
professional bodies against the coverage of top professional<br />
services firms in their respective sectors. The analysis also<br />
compares coverage of the Confederation of British Industry<br />
(CBI), Trades Union Congress (TUC) and other major<br />
institutional bodies.<br />
11 Hansard, the Offi cial Report, is the printed transcript of parliamentary<br />
debates. Hansard transcripts cover proceedings in the Commons<br />
Chamber, Westminster Hall and Standing Committees. Lords Hansard<br />
covers proceedings in the Lords Chamber and its Grand Committees.<br />
Both contain Written Ministerial Statements and Written Answers<br />
(“Hansard” 2007).<br />
28
The period of analysis is, for most bodies, the past seven<br />
years, 2000 – 2007. 12 The analysis was carried out using the<br />
Hansard search engine available via the website www.<br />
theyworkforyou.com. This site conducts a search for words<br />
within the text of House of Commons debates, Written<br />
Answers, Westminster Hall debates, Written Ministerial<br />
Statements, Lords debates, and Northern Ireland Assembly<br />
debates. The chart shows that some organisations are more<br />
successful at achieving parliamentary ‘coverage’ than others:<br />
KPMG and PricewaterhouseCoopers both average above 80<br />
mentions per year whilst the ICAEW and CIPFA average under<br />
30. One should bear in mind that particular debates may skew<br />
the results for some organisations, eg the Law Society, who<br />
were the focus of sustained scrutiny over the development of<br />
the Legal Services Bill. On average top firms in the accountancy<br />
profession achieve far greater coverage than professional<br />
membership bodies. In the property sector, the professional<br />
body RICS does comparatively well at about 11 mentions to,<br />
eg the British <strong>Property</strong> Federation’s nine and CB Richard Ellis’<br />
less than one mention, but in the wider analysis compares<br />
poorly to other sectors. Notably, the CBI has achieved by far<br />
the most parliamentary mentions per year at 160. This initial<br />
analysis provides a start to thinking about how scholars might<br />
operationalise professional influence in policy-making and<br />
chart its effects.<br />
All political consultation provided by professional bodies is<br />
pro bono. Another way to begin quantifying the professions’<br />
political consultative efforts may be to look at the hours of<br />
the people directly involved, the internal public affairs and<br />
policy teams. How many are on the teams, what is the scope<br />
of the budgets they work with, and how much member time<br />
do they co-opt? Beyond time donated, what is the value<br />
of the content provided, the expert advice? In many cases,<br />
these records are not kept. Professions might pursue the<br />
approach of valuing their contributions to society – such a<br />
methodology would allow them to evaluate costs and benefits,<br />
measure performance and demonstrate accountability<br />
and transparency.<br />
Professional influcence in official<br />
parliamentary proceedings<br />
Yearly average of Hansard mentions<br />
180<br />
160<br />
140<br />
120<br />
100<br />
80<br />
60<br />
40<br />
20<br />
Accountancy<br />
<strong>Property</strong><br />
27.8 27.1<br />
93.5<br />
40.1<br />
61.8<br />
85.8<br />
Legal<br />
Other bodies<br />
11.4 9.1<br />
0.5 1.4 0.5 6.0 2.2 3.1<br />
0<br />
1 2 3 4 5 6 7 8 9 10 11 12 13 14<br />
4.4<br />
0.1<br />
15 16 17 18 19 20 2122 23 24 25 26 27 28 29 30<br />
1 Institute of Chartered Accountants<br />
2 Chartered Institute of Public Finance<br />
and Accountancy<br />
3 KPMG<br />
4 Deloitte & Touche<br />
5 Ernst & Young<br />
6 PricewaterhouseCoopers<br />
7 Institute of Chartered Surveyors<br />
8 British <strong>Property</strong> Federation<br />
9 CB Richard Ellis<br />
10 Jones Lang LaSalle<br />
11 Cushman & Wakefield<br />
12 DTZ<br />
13 King Sturge<br />
14 Drivers Jonas<br />
15 Bar Council<br />
34.7<br />
10<br />
122.5<br />
30<br />
18<br />
1.7<br />
1.8 2.8 2.1 1.5<br />
16 Bar Standards Board<br />
17 The Law Society<br />
18 Solicitors Regulation Authority<br />
19 Legal Complaints Service<br />
20 Council for Licensed Conveyancers<br />
21 Institute of Legal Executives<br />
22 Allen & Overy<br />
23 Clifford Chance<br />
24 Linklaters<br />
25 Slaughter & May<br />
26 Freshfields Bruckhaus Deringer<br />
27 British Retail Consortium<br />
28 CBI<br />
29 Institute of Directors<br />
30 London First<br />
25.5<br />
160<br />
36<br />
9<br />
12 For newly created bodies such as the Bar Standards Board,<br />
the average yearly mentions were calculated only over the time<br />
of the body’s existence.<br />
British Professions Today: The State of the Sector © Spada Limited 2009 29
Social and political contributions continued >><br />
4.3 Case study: RICS and Home Information<br />
Packs (HIPs)<br />
The recent high-profile case of RICS’ opposition to the<br />
government-proposed Home Information Packs (HIPs) and Energy<br />
Performance Certificates (EPCs) illustrates that public interest and<br />
political interests do not always coincide. The concept of a “Home<br />
Information Pack,” to include evidence of title, copies of planning,<br />
regulations consents, a local search, guarantees for any work on<br />
the property, and an energy performance certificate, was first<br />
vetted as early as 1997 (Knight 2007). HIPs were conceived<br />
with the intent of making the home-buying process simpler and<br />
quicker, and to ensure that fewer sales broke down. HIPs would<br />
also include a Home Condition Report (HCR), carried out by<br />
qualified Home Inspectors, which would detail the condition of<br />
the property in plain English.<br />
In their policy response to the Department of Communities and<br />
Local Government (DCLG) consultation, RICS states that while<br />
it supports reforms to the home-buying process to lend timeliness<br />
and certainty to the current system, a number of concerns with<br />
HIPs led the body to seriously question the policy. The government<br />
intended to implement this proposal without ensuring that the<br />
certification schemes for the inspectors or the databases to<br />
hold their reports would be set up in time. According to RICS<br />
spokesman Jeremy Leaf: “The Government’s own research shows<br />
that we will need up to 7,400 Home Inspectors to ensure the<br />
smooth introduction of the new regime.<br />
However, to date, only a handful of candidates have satisfactorily<br />
completed the Diploma in Home Inspection, the key prerequisite<br />
for obtaining a Home Inspector’s licence”. (“HIP day...” 2005)<br />
In addition, serious concerns about whether enough “specialist<br />
energy assessors” required to have all homes energy rated once<br />
every ten years would be available to do the job (Ibid.). RICS<br />
was particularly concerned that the government was putting this<br />
proposal forward without consulting the appropriate industry<br />
members. Heavy hitters across the property industry opposed the<br />
proposal, including RICS, the National Association of Estate<br />
Agents, and large firms, eg Spicerhaart. Yet, rather than consulting<br />
RICS or major firms, the government consulted people that had<br />
set up businesses to be HIPs providers (Craig 2007).<br />
After the government refused to meet with RICS on a number<br />
of occasions, RICS finally went public with its discontent. On<br />
15 May 2007, RICS started Judicial Review proceedings against<br />
the Department for Communities and Local Government for the<br />
department’s failure to carry out a full consultation on HIPs. The<br />
government called RICS self-interested (and anti-green), implying<br />
that RICS had ulterior motives and wanted to control the<br />
implementation of HIPs. The body countered that in fact this was<br />
quite low-value work for its members and very few (less than 100<br />
of 100,000) were interested in becoming accredited to perform<br />
this work. RICS maintains that the proposal was unworkable<br />
(Craig 2007).<br />
30
The Law Society, too, felt that the government’s plans to introduce<br />
HIPs were potentially very costly to the consumer and damaging to<br />
the property market (“Government not ready…” 2007). The Law<br />
Society, along with other major stakeholders in the home buying<br />
and selling process, wrote to Yvette Cooper MP, Minister for<br />
Housing and Planning, urging the government to meet with them<br />
and to delay plans (Ibid.).<br />
In an attempt to avoid a lengthy court case and delays, the<br />
DCLG reached an agreement with RICS, revised regulations, and<br />
implemented certain changes, including the delays and continuous<br />
assessment of HIP implementation (“Energy Performance…”<br />
2007). The much-anticipated HIPs are now compulsory, following<br />
a series of delays and a scaled launching of the packs according<br />
to property type. Jeremy Leaf, RICS spokesman, described the<br />
situation: “Although they are not the only factor, HIPs are<br />
continuing to have a detrimental impact on the housing market,<br />
in spite of assurances from the housing minister that this would<br />
not happen” (The Telegraph 6 October 2007). Confirming this,<br />
the January 2008 RICS house-price survey placed some of the<br />
blame of the diminishing housing market on their introduction.<br />
Despite what may look like a policy failure, RICS views the HIPs<br />
experience positively because the process of judicial review raised<br />
the influence of the body amongst peer professions and other<br />
government bodies (Craig 2007). The lessons of this example,<br />
in which multiple professional bodies met with stone walls when<br />
attempting to advise government on a technical policy issue,<br />
suggest that professional expertise may be undervalued in the<br />
political sphere – to the detriment of consumers and the public.<br />
Should the professions have a larger, collaborative role to play<br />
in helping consumers and citizens navigate free markets?<br />
British Professions Today: The State of the Sector © Spada Limited 2009 31
5Conclusion
Conclusion >><br />
The best augury of a man’s success<br />
in his profession is that he thinks it<br />
the finest in the world.<br />
George Eliot, Daniel Deronda, 1876<br />
The professions inform critical aspects of our<br />
day-to-day lives, not only by providing key support<br />
for individuals, businesses and the economy,<br />
but also by leading the march forward, helping to<br />
shape the way we think about the world through<br />
quickly-changing times. This report has shown that<br />
the professions are vital to the UK economy, at<br />
the forefront of the drive for social progress as<br />
catalysts for social mobility, and provide, pro bono,<br />
essential technical expertise to policy-makers to<br />
legislate on complex matters. The findings of this<br />
report also suggest that professions are<br />
unclassified, under-studied, and under-valued in<br />
social and political life. Although the public broadly<br />
trusts professionals more than others, particularly<br />
politicians and ‘big business,’ trust is declining and<br />
public perceptions are often distorted. Given this<br />
ambivalent state of affairs, what does the future<br />
hold for the professions in British society?<br />
5.1 Summary of findings<br />
No single definition of ‘profession’ exists. Sir Alan Langlands<br />
posed a basic definition which we employ as an operational<br />
definition throughout the report: those occupations “where<br />
a first degree followed by a period of further study or<br />
professional training is the normal entry route and where<br />
there is a professional body overseeing standards of entry<br />
to the profession” (Langlands 2005). Although we have<br />
noted that a first degree is not always required at entry level<br />
by all professions.<br />
Professional structures have grown up from the social clubs<br />
and guilds of old to the institutions of today via a process of<br />
gradual establishment and entering into regulatory bargain<br />
with the state. Whilst professions have gained societal<br />
importance with the rise of the information age, they have<br />
experienced a simultaneous gradual decline in public esteem.<br />
People question the incentives and the motives of institutions<br />
so powerful that they can create their own marketplace,<br />
especially when the aftermath of scandals like Enron and the<br />
Shipman murders fuel suspicions that the professions may not<br />
always have the public interest at heart.<br />
Regulation<br />
The perceived self-interest of the professions has brought<br />
about significant changes in regulatory structures in what many<br />
would see to be a backlash against professional independence.<br />
The traditional concept of self-regulation as vital to<br />
professional identity is changing along with the evolution (and<br />
fragmentation) of social organisations in today’s global world.<br />
Lines have become blurred, not only in the professional sector,<br />
British Professions Today: The State of the Sector © Spada Limited 2009 33
Conclusion continued >><br />
but also in the continuum of organisations between the state<br />
and society (eg the rise of the ‘third sector’). Robert Kaye has<br />
noted that while many professions are moving towards what<br />
he terms “regulated self-regulation,” there is remarkably little<br />
explicit policy transfer between professions. Institutional<br />
changes are often presented as sui generis (CARR<br />
Conferences 2007). The findings of this report indicate that<br />
inter-professional comparison and collaboration would be<br />
useful if only to facilitate greater understanding of the<br />
complexity of the new structures and processes affecting<br />
most professional bodies, and to share ‘best practice.’<br />
Economic contributions<br />
The fact that an industrial category of analysis for the<br />
professional sector does not exist, and thus that accurate and<br />
comprehensive statistics on the economic contributions of<br />
professional occupations cannot be precisely measured<br />
and compiled, is a key finding in and of itself. Through use<br />
of the proxy SIC 74, our findings show that even crudely and<br />
conservatively quantified, the professions are a vital<br />
contributor to British economy.<br />
The professional sector accounts for the largest single share<br />
of UK output (in UK real GDP), contributing 8% of total UK<br />
output (IER 2006/ SSDA Sector Skills Matrix 2008).<br />
Professional services continue to expand at an impressive rate,<br />
forecast to grow 3.4% average annually from 2004 to 2014<br />
compared to 2.4% average annual growth forecast for the<br />
whole economy in the same period (IER 2006/SSDA Sector<br />
Skills Almanac 2007). The professional sector accounts for<br />
£15,849 million of British trade in services, or over half of<br />
the total £29,194 million (balance of accounts, as credits less<br />
debits) (The Pink Book 2007), helping to offset the growing<br />
negative balance of trade in goods. The professions are the<br />
largest employer in the UK, with 11.5% of total UK<br />
employment (IER 2006/SSDA Sector Skills Matrix 2008).<br />
UK professions are the largest contributor to the EU27’s<br />
professional sector in 2004, with EUR 203.5 billion of value<br />
added, generating 27.5% of the EU27’s sectoral value added<br />
and employed 19.5% of its workforce. Finally, the professions<br />
by their nature contribute to the economic growth of other<br />
companies across industry sectors in immeasurable ways.<br />
Social and political contributions<br />
The professions have played a big role in the development of<br />
meritocracy because of their emphasis on knowledge-based<br />
skills rather than social class. Yet, social mobility in the UK has<br />
slowed considerably compared to other European countries.<br />
The findings of this report suggest that shoring up professional<br />
skills and qualifications may be one way of advancing social<br />
progress in the future. Indeed, professional bodies are working<br />
with the government to improve equal access to the<br />
professions – though more could certainly be done.<br />
As trusted experts, professionals have a unique opportunity to<br />
be highly influential not only in advancing social progress and<br />
bolstering civil society, but also in the realm of policy-making.<br />
However, our research finds considerable ambivalence about<br />
how influential professional bodies are, and how influential<br />
they ought to be. Professionals come up against distrust<br />
because of their perceived self-interest, not to mention<br />
periodic corruption scandals or worse. Still, in a fast-moving<br />
world where government has limited resources, the<br />
professions’ technical expertise is an integral, working<br />
component of stable democracy. Should the professions have<br />
a stronger, and more united, voice in the public interest?<br />
34
5.2 Vision for the future<br />
Professions matter to the state of GB plc. Their contributions<br />
are invaluable. They are one of the world’s largest and most<br />
influential industries. Yet, this report has shown that the<br />
industry is, perhaps surprisingly, vastly under-studied, although<br />
some commercial endeavours are under way (eg Edison<br />
Investment Research sponsored by Noble & Company).<br />
Collecting data is a big challenge, and currently structures for<br />
comprehensive analysis – accurate variables and tested<br />
methodologies – do not exist. New methodologies and<br />
variables should be formulated, as well as greater transparency<br />
and consistency in reporting, in order for the full extent of<br />
professionals’ contributions to society to be brought to light.<br />
The professions are a potential source of great progress<br />
towards meritocracy via increased access and social mobility,<br />
and a potential source of ethical role models via promulgation<br />
of professional standards, ethics and morality in business,<br />
government, and civil society.<br />
Our initial report suggests that significant benefit – for<br />
the public interest, government, and the professions<br />
themselves – may come of the professions working together<br />
and speaking with the authority of a single voice to<br />
government and the public. For example, policy on<br />
sophisticated technical skills in the UK is often legislated<br />
without appropriate expertise. Ensuring that professional<br />
knowledge and legitimate interests are incorporated within<br />
UK public policy formulation benefits government, which<br />
simply does not have the resources to manage the complexity<br />
of information necessary on all issues. The problems in the<br />
banking sector exposed by the financial crisis in 2008 illustrate<br />
all too clearly the urgent need for professional standards,<br />
including rigorous qualifications, high-quality codes of practice,<br />
sufficient monitoring, and appropriate disciplinary mechanisms.<br />
The public has, again and again, demonstrated a need for<br />
authoritative professional expertise to protect their interests,<br />
from medical to legal to financial, and to counter information<br />
overload and the prevalence of web-borne and mediadisseminated<br />
technical or semi-technical information, some<br />
of which may be of doubtful veracity and provenance.<br />
In an era of changing values, the strength of professional<br />
structures and quality stands as one of the few<br />
constants across generations and even centuries. This legacy<br />
and consistency is formidable, but should not be taken for<br />
granted in light of the threats posed by the evolution of<br />
consumerist values, instant gratification, declining client loyalty,<br />
increasing media scrutiny, and increasing regulation.<br />
If we agree that the research outlined in this report paints an<br />
accurate general picture of the professional sector, several<br />
additional questions might be raised by the findings. It is our<br />
hope that this report may spur debate in the appropriate<br />
forums with key stakeholders – government, business,<br />
education, organised labour, professionals themselves, and<br />
most importantly consumers and the general public.<br />
The financial sector’s recent and dramatic downward spiral<br />
shows the critical importance of finding the right balance of<br />
professional independence and regulation. What might be<br />
the appropriate balance of stakeholders’ interests in the<br />
regulatory regime going forward? The case of HIPs is<br />
only one recent example of government resisting technical<br />
advice to the detriment of consumers and the public interest.<br />
What will it take for government to recognise professional<br />
bodies (rather than individual firms) as sources of valuable<br />
consultation in relevant fields of expertise? Might there be a<br />
place for a general professional information service, campaign<br />
or collaborative body to shore up political influence?<br />
Finally, we cannot ignore indications that public esteem for<br />
the professions has fallen. What does this mean for the future<br />
of professional skills and quality, for social mobility and social<br />
capital? How can we ensure that recruitment in the<br />
professional sector attracts the most talented young people<br />
(away from less publicly-minded occupations like banking),<br />
ensuring ongoing quality of support services in the public<br />
interest and ongoing progress toward meritocracy?<br />
British Professions Today: The State of the Sector © Spada Limited 2009 35
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British Professions Today: The State of the Sector © Spada Limited 2008 37
Appendices >><br />
1. Lord Benson’s criteria for the professions<br />
1 The profession must be controlled by a governing body,<br />
which in professional matters directs the behaviour of its<br />
members. For their part the members have a responsibility<br />
to subordinate their selfish private interests in favour of<br />
support for the governing body.<br />
2 The governing body must set adequate standards of<br />
education as a condition of entry and thereafter ensure<br />
that students obtain an acceptable standard<br />
of professional competence.<br />
Training and education do not stop at qualification. They<br />
must continue throughout the member’s professional life.<br />
3 The governing body must set the ethical rules and<br />
professional standards that are to be observed by the<br />
members. They should be higher than those established<br />
by the general law.<br />
7 The governing body must satisfy itself that there is fair<br />
and open competition in the practice of the profession so<br />
that the public are not at risk of being exploited. It follows<br />
that members in practice must give information to the<br />
public about their experience, competence, capacity to<br />
do the work and the fees payable.<br />
8 The members of the profession, whether in practice<br />
or in employment, must be independent in thought and<br />
outlook. They must not allow themselves to be put under<br />
the control or dominance of any persons or organisation<br />
that could impair that independence.<br />
9 In its specific field of learning, a profession must<br />
give leadership to the public it serves.<br />
Source: Benson, Lord. 1992. “Criteria for a group to be considered a profession” as recorded in<br />
Hansard (Lords) 8 July, 1206-1207.<br />
4 The rules and standards enforced by the governing body<br />
should be designed for the benefit of the public and not<br />
for the private advantage of the members.<br />
5 The governing body must take disciplinary action,<br />
if necessary expulsion from membership, should the rules<br />
and standards it lays down not be observed, or should a<br />
member be guilty of bad professional work.<br />
6 Work is often reserved to a profession by statute –<br />
not because it was for the advantage of the member,<br />
but because of the protection of the public, it should<br />
be carried out only by persons with the requisite training,<br />
standards and disciplines.<br />
38
2. Personal interviews<br />
Name Title Affiliation<br />
Mark Goodwin Special Advisor to the Chief Executive RICS<br />
Simon Thompson and<br />
Emma Winsor-Cundell<br />
Head of Media Relations;<br />
Head of Corporate Communications<br />
ICAEW<br />
Michael Burrage Professor, Sociology The London School<br />
of Economics; UC Berkeley<br />
Jill Craig Head of Policy and Public Affairs RICS<br />
Mark Hatcher Director, Representation and Policy Bar Council<br />
Harry McAdoo<br />
and Jonathan Labrey<br />
Director of Communications;<br />
Head of Public Affairs<br />
ICAEW<br />
Vicki Chapman Acting Director of Legal Policy The Law Society<br />
Vernon Soare Executive Director, Professional Standards ICAEW<br />
Les Smith Head of Executive Office ICAEW<br />
Alex Galloway Consultant; former Clerk of the Privy Council Privy Council<br />
(1998 – 2006)<br />
British Professions Today: The State of the Sector © Spada Limited 2008 39
Spada Research >><br />
Spada Research is the academic research arm of Spada Limited,<br />
a public relations consultancy specialising in professional<br />
services. Spada Research supports Spada’s involvement in<br />
the professions, communications and media, adding value<br />
to the critical debates in the professional services sector.<br />
Spada develops thought leadership campaigns for leading<br />
businesses to contribute their expertise on key issues affecting<br />
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If you are interested in commissioning original research,<br />
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40
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