Gauging public sector opinion

If – and it is a big if – they vote to join forces with CIMA and the ICAEW, there is no doubt that the public sector accountants of CIPFA will be the junior partner in the ‘super-institute’.

CIPFA would account for under 7% of the 200,000 membership of any merged body and fewer than 3% of its 90,000 student head count. Nor can it boast much organic enlargement. Compared to ACCA’s growth rate of 7.8% and even the ICAEW’s 2.0%, CIPFA appears almost stagnated at 0.5%.

Members will inevitably ask what is in it for the public sector accountants? Won’t they be swamped by weight of numbers in the body’s single council?

If those questions weigh on the minds of CIPFA’s leadership at the launch of the merger proposals earlier this month, they weren’t showing it.

Their belief is that to become the UK’s ‘voice’ of accounting, the super institute would need to cover ‘all the bases’ of practice, management and public accounting. So Steve Freer (pictured), CIPFA chief executive, seems sure it would be able to punch above its weight. ‘The public services are such an important piece in this jigsaw. They account for 30-40% of the global economy; their reform and modernisation is top of the political agenda not only here in the UK but also in developed and developing economies throughout the world,’ he says.

True as that may be, it is unlikely to assuage the doubts of all CIPFA members who wonder whether being on board is necessarily the same as having a hand on the wheel.

As Britain’s recent attempts to play Greece to America’s Rome have proved, the risk of being carried along on the coat tails of a larger, wealthier and more powerful partner is real.

But, insists Freer, the naysayers are fighting a losing battle. Citing CIPFA’s strategic review of 2001, he says, bluntly: ‘We concluded that consolidation or rationalisation was inevitable – a case of when rather than if.’

That review found that the UK profession was poorly positioned for a climate in which regulation was increasingly international. ‘Six competing bodies, each sending subtly different messages is not a formula to impress the world,’ says Freer.

Mike Barnes, CIPFA’s president, is keen to underline the message that the merger has clear goals. ‘Let me be absolutely clear, this is not consolidation for consolidation’s sake,’ he says.

And while he maintains that CIPFA is doing well, he claims the merger will prepare the profession for an increasingly global future. ‘It is our clear responsibility to ensure that we’re fit for purpose for the next generation of chartered accountants,’ he adds.

Another potential sticking point will be the different functions of the management accountants with their colleagues at the ICAEW and CIMA.

Malcolm Howard, a CIMA member, argued in last week’s Accountancy Age: ‘I have no doubt that CIPFA tries to maintain integrity, but I would not wish to be associated with an institute whose accounting policies are dictated by government, and so are politically, rather than efficiency, driven.’

The counter to this is that the profession at large will benefit from the stronger voice that comes with a larger, overarching interface with government. That may prove a strong case in a landscape transformed by the earthquakes of Enron and Parmalat, where, to borrow Freer’s phrase, the ‘tectonic plates’ of the profession are shifting.

Moreover, with the increasing popularity of public private finance initiatives, the pro-merger camp argue that bringing the public and private sector accountancy institutes together better reflects economic realities.

Freer told journalists at the announcement of the merger plans that if only two of the institutes voted in favour, there was the possibility of a ‘mini-merger’. That would probably be between CIPFA and CIMA.

But his goal remains a full tripartite merger, or, as he would have it, the ‘dream ticket’. Whether members will see it in that light only time will tell.