Infologue.com editor, Bobby Logue, recently interviewed exclusively Hazel Russell, Transition Director of the Security Industry Authority (SIA) who is retiring from the SIA at the end of January 2012. Russell, who is generally credited for the planned re-engineering of the regulatory regime, spoke about the decision to make strategic changes long before the so-called “Bonfire of the Quangos” announcement:
“We had been doing our strategic planning and had recognised that whilst the regulatory regime that had been put in place over those six years was fairly widely acknowledged as both necessary and reasonably successful, we thought, in terms of strategic planning, that it would be quite dangerous to then stand still, because what tends to happen then is that something that is successful becomes less so because it does not keep pace with the changing environment.
“So we have done what organisations tend to do which is to scan the environment, look wider than just the UK, looked at what was happening in Europe also in the UN. And actually, in our industry itself, there had always been talk of the benefits there would be from regulating businesses rather than individuals.”
Russell said the SIA then asked the question: “How could we develop regulation to keep pace with the changing private security industry environment in the UK? What should we do? So strategically we had identified that we should refocus regulation towards business and this is where the “lighter touch” comes in because that would necessarily cause the regulator to have a somewhat “lighter touch” on individuals.
“If you remember at the time, one of the other key factors in that strategic planning was the concern around the vehicle immobilisation sector. We had been tasked by the Home Office and ministers to do something about the weight of complaints around vehicle immobilisation practices. We had been saying that individuals are compliant, they’re licensed, they’re trained, they are meeting the conditions of their licence; giving receipts and so on. Those individuals can’t be held responsible for the poor business practice that is leading to members of the public being upset and complaining about the practices of vehicle immobilisers. So in trying to work out how we would address the public concern, which leads to political concern about the behaviour of vehicle immobilisers, we also considered the concept of regulating businesses as a way of removing poor and criminal business practices from a sector in the industry. So there was that broad consensus on how we move regulation forward. In addition, there was a specific consideration about mitigating public risk created by a particular sector. Those two concepts came together.
“Our proposed timeline was to move towards the regulation of businesses over the next ten years, but the planned abolition of the SIA in the winter of 2010 changed this.”
Infologue.com then asked Hazel what her role was in the so-called re-engineering of the SIA? Russell responded: “Before the Public Bodies Bill and the Government setting out its intention that there should be a transition to a new regulatory regime focused on businesses, I was Director of Strategy and Corporate Services for the SIA. So the development of that original proposal I have just been talking around for developing regulation and specifically addressing the vehicle immobilisation sector risks, I was directing the development of that strategy.”
We then moved on to the perceived meaning of the word “lighter touch” implying less regulation, which could imply a lack of robustness in the process. Russell spoke of the distinction of whose touch the SIA were talking about. She continued, “We are talking about the regulator having a “lighter touch” but businesses in the industry having greater authority, autonomy and responsibility – so the regulator’s touch might be less but the employer, the business employing or deploying individuals takes responsibility. What has always been meant by the “lighter touch” is the regulator’s “touch”, but not the industry’s “lighter touch” in controlling their businesses in a safe way.”
Infologue.com focused on establishing a timeline of the development of the new SIA strategy. Russell discussed the announcement by the SIA Chairman, Baroness Ruth Henig, at the May 2010 conference; this kick started the initiative to refocus regulation of the private security industry. In the winter of 2010 the regulator started hearing rumours about was eventually the Public Bodies Bill, which originally contained the proposed abolition of the SIA.
“On the basis of the rumours, the industry really got together and lobbied for the retention of regulation. The industry, which had put massive investment into regulation understood the benefits of it and actually were keen on business licensing. We were only reflecting back, as the SIA, in our strategic planning, things that the industry had told us would be sensible developments of regulation. I think it was a surprise – the strength of the support for regulation, the strength of feeling in the industry and the way in which the industry galvanised itself so quickly. The industry lobbied and worked with us to bring our long term plans much more into the foreground, so that we were proposing implementing business licensing much more quickly and managing that transition to an improved “lighter touch” regulation. Thanks to lobbying by the industry, the wording in the Public Bodies Bill that eventually actually came out, was that regulation would be retained and that there would be a phased transition to a new regime, but equally, the regulator would not be retained by the State. It would become independent – moved out of the Non Departmental Public Body (NDPB) sector, which would mean further at arm’s length from the Government.
“After the Public Bodies Bill was published, the government subsequently set out its intention to make primary legislation in the second session of parliament, which would be this year coming up 2012/13, and having set out that intention the SIA was taken out of the Public Bodies Bill because the government’s intention was to create new primary legislation to set up a new regulatory body outside of state control and to transfer regulatory functions under a new regime into that new body.
“By the Autumn of 2011 it started to become clear that the government had got too much legislative business to fit into the second session and it became clearer and clearer that the primary legislation in the second parliamentary session wasn’t going to be possible. So we at the SIA devised a proposal for a different legislative route using secondary legislation to amend the Private Security Industry Act to enable the implementation of business licensing to enable businesses to have that role in individual registration and that could happen more quickly than primary legislation that is now expected to take place in the third session.
“Primary legislation will still be needed to set up a new regulatory body outside of state control and it will be needed to enable effective compliance powers for the regulator so that there is a breadth of compliance tools – not just the warning notices at one end and prosecutions at the other, removal of right to trade, actually, under business licensing, but something in between, e.g. monetary penalties variable or fixed and that will need primary legislation so that the regulator will then have some teeth to ensure that businesses comply with business licensing terms and conditions. You don’t want to move straight from “we’ve told you to do this and you haven’t done it, to now you can’t trade”. That is clearly not going to be workable. Therefore a system of sanctions that supports that compliance activity will be needed and that will require primary legislation.
Russell then went on to explain to Infologue.com that the suggested new sanctions regime would be in tune with the Regulatory Enforcement Sanctions Act. “The important thing in this story though is that coming up with that secondary legislation route demonstrates the case that industry and regulator are saying that even without the Public Bodies Bill and what government want for regulation, the industry and its regulator are saying “we want this regulation, and if you can’t get the early legislation for it, we will find another way of doing it”. Industry recognises business licensing is going to support levelling the playing field, which will take out those poor and criminal practices that enable businesses to undercut legitimate and good quality businesses, and the industry wants that. The legitimate industry doesn’t want those cowboys damaging their reputation, damaging their ability to gain contracts in Europe.
“I think that the fact that in the industry they are supportive of the SIA seeking to find a way to put business licensing in place strongly emphasises that historical picture of industry and regulator wanting to do this anyway. In a way that Public Bodies Bill and the rumours about abolition acted as a catalyst to speed up delivery of that strategic plan. In the end I think it has worked out to the benefit of the whole security industry.”
Hazel Russell concluded the interview by discussing a continual multi-tier consultation process which extensively engaged all stakeholders in the wider private security: “The SIA has consulted with the industry through the self-perpetuating networks that operate across most of the sectors, the small business network, the ACS forums, the skills sector forums. The SIA has been talking to those industry stakeholders its whole life and one of the things that I hope comes across strongly from what we have finally proposed, is actually that the SIA listened. The SIA did not make up how regulation should be for this industry. The SIA listened to what the industry said regulation should look like. The SIA acted as coordinator of that proposal. Over time we honed down what the industry told us was necessary into one succinct package of a regime proposal and then latterly we formally reviewed that narrative with representatives of the industry including the Security Regulation Alliance. And those who have joined our Strategic Consultative Group have put in time and effort to reviewing and giving detailed feedback on those proposals so that we have been able to tweak them, ensuring that we have reached an accommodation with everybody. It is not just industry stakeholders, it is other stakeholders in the industry, so not just industry members, but also the devolved administrations, officials and ministers including the Home Office and ministers here, including ACPO and other key industry players, such as buyers.
“We have listened and coordinated those voices into what hangs together as a coherent proposal which, as you know we have drafted up into a formal impact assessment which, subject to approval by the various regulatory policy committees, the Chief Economist and the Home Secretary, we will conduct a formal consultation in May 2012. This will allow all stakeholders in the industry and wider to have a further say and to question or confirm the assumptions. We will then do a final impact assessment on the final proposal, which then is written into the secondary legislation and subsequent primary legislation.”
This interview must not be replicated without the express written permission of Infologue.com.