Challenges facing the Security Industry in 2016 – and Industry Views

Jason Towse

“The key challenges for 2016; increased threat of terrorism creating mass disruption increasing street level fear, cyber/IT attacks highlighting gaps in understanding and adoption of converged approach, and continued commoditised purchasing combined with labour shortages and the National Living Wage will force industry to think and buy differently” responded Jason Towse of Mitie Total Security when asked for his views by on the challenges for the Security Industry in 2016. believes 2016 is going to be both interesting and challenging for the UK private security services industry. Key challenges are likely to be:

Prevention from the Threat of Terrorism: The horrific terrorism events in France and Belgium during 2015, as well as the foiled terror acts in the UK, have served as a wake-up call for Business UK. This has resulted in smart businesses reviewing the way security is delivered to their company, tightening their processes and their physical security. More will be expected from frontline personnel. believes they will look towards finding security companies with this capability.

Former BSIA Chief Executive and contributor, David Dickinson, commented: “Any reputable profession requires CPD and the security industry should be no exception. Frontline training was introduced into the regulated sector in 2003. Since then we have had 7/7 in London and now Paris where a security officer confronted and, effectively, removed a suicide bomber! When will people wake up to both the realities and the opportunities! There needs to be a fast-growing recognition all round of the need to support the public law and order bodies with properly trained and qualified private sector people. The SIA should define who can provide the training, what the syllabus should be and endorse it when it is clear how the public will benefit. It doesn’t need to be the whole, or even the majority of the workforce. Just those with capabilities should be encouraged to be a ‘special services’ element within the industry!”

The National Living Wage (ala George Osborne): Estimates which vary up to an 8% industry based on varied current wage and age profiles are likely to be a challenge to security service companies. Customers are likely to attempt security companies to absorb part of the burden, which they can ill afford.

The Review of the SIA: The Home Office has initiated a review of the Security Industry Authority (SIA). In reality, the private security industry are “reviewed out” after the 2010 attempt to disband the SIA in the so called “Bonfire of the Quangos”, which was resisted by a united industry. If little unified response is shown by the industry, they could allow the Government to make unilateral decisions on the future of the SIA.

The Practice of Contract Churn to Reduce Costs: Over the past 10 years, many procurement exercises, regardless of the excellent service provision of the incumbent contractor, the service is terminated on cost. The erosion of margin has eroded the fabric of many security businesses resulting in a lack of the provision of services such as professional advice on security related issues, onsite training etc. is of the opinion that a concerted effort is jointly required by the SIA and the security industry educates procurement departments on the perils of their policy of reduced prices at all costs.

Significant Travel & Subsistence Scheme Changes: James Doyle of Cobia commented “Travel and subsistence planning’ (T&S) has created a significant margin opportunity for manned guarding organisations and the broader supply chain over the past 15 years. The recent Finance ACT published in autumn last year introduced new legislation that will limit this opportunity from April 2016. Organisations currently operating such arrangements are perhaps still not aware of the significant margin impact that these changes will have on both their cost structure and potential charge rates to end clients. This will present significant commercial challenges to what is already a low margin industry sector. Whilst a number of opportunities still exist post April to operate travel arrangements compliantly, it is important for all organisations in the value chain to be now considering the impact of these changes”

Industry Views – Further views from the security services industry included:

Steve Gardner, Security Director at OCS: “The increased terrorism threat, coupled with the anticipated cost increase of providing manned guarding, makes the effective use of resources and innovation essential for meeting developing security demands. A heightened public focus on security spotlights the service provider’s pivotal role.”

Simon Chapman, Managing Director of Lodge Service: “Losses to crime and the threat of terrorism means that major security users are going to have to focus on issues beyond straight price comparisons when selecting solutions. Users will need to take a wider view of the value that a trusted consultancy partner can add to security protection, loss prevention and minimising risk. For our part, suppliers must prove the value we can deliver.”

Peter Webster, CEO of Corps Security, commented: “Over the last couple of years as an industry we have seen our customers changing their attitudes as they come out of a recession. Yet we are still on the edge of the financial recovery and there is a danger that, if the UK economy falters due to external influences, we are going to see customers reverting back to a recession mentality”.

Kenneth Larsen, Regional Director for London at Securitas, commented: “To deliver effective protection, traditional manned guarding can no longer stand on its own. With budgets tighter, we must work smarter. Advanced technology systems, combined with more professional, specialist security officers, are the only way forward.”