The SIA in Sheffield: A New Regulatory Regime for the Private Security Industry

SMT Online – Web Exclusive

Hazel Russell
Hazel Russell
Stephen McCormick
Stephen McCormick

The SIA’s ‘Commitment To Regulation’ Conference featured pivotal presentations by Hazel Russell and Steve McCormick, who added “layers of detail” to what we already know about the future for regulation. Brian Sims and Bobby Logue listened intently.

As the Regulator’s director of transition, Hazel Russell stood before Conference to outline ‘A New Regulatory Regime for the Private Security Industry’ – but not before Home Office minister Lynne Featherstone had addressed us all via pre-recorded video.

The minister talked of the need for “promoting and synchronising industry objectives” and of a security sector that had “matured to a level”. That last point is worth noting, as previous Government-scripted missives have delineated a ‘mature security industry’. It’s not mature but maturing. There’s an important distinction distancing those two states of being.

The decision eventually taken by the coalition Government to spare the Security Industry Authority (SIA) any kind of Austerity 2010 guillotine is testament to the hard work of the Regulator itself and those it regulates. “There’s evidence of growing professionalism” stated the minister, who also spoke at this summer’s BSIA Annual Luncheon and The Security Institute’s Annual Conference.

Featherstone made mention of the SIA’s Strategic Consultation Group and reiterated the truism that the main focus of regulation going forward would indeed be licensing of businesses.

“There will be robust sanctions for those who fail under the new regulatory regime,” stated the minister, “including the right to trade being removed.”

Featherstone duplicated Baroness Henig’s Keynote Speech by focusing on the much-discussed online register of all those available and eligible to work in the private security sector.

In the first half of next year, the Home Office will open a consultation phase on proposed plans for the new regulatory regime. It will be time for the industry to really have its say.

Featherstone duly referred to this dialogue being of “paramount importance”. Members of the public are also to be consulted. “Those views are equally critical.”

Form, functions and governance

The security sector has spent the best part of a decade buying into – quite literally, in most cases – the brands that are the SIA and the Approved Contractor Scheme (ACS), and many commentators are willing them to stay (for consistency’s sake at the very least).

Given that the nature of those buying the security function is changing so much – with guarding companies now speaking to everyone from proper security managers through to IT specialists, FMs and procurement mandarins – it’s many a practitioner’s view that throwing these proverbial babies out with the bathwater would be little short of a disaster, effectively turning the regulation clock back to 2003 (and at a juncture when the level of regulatory knowledge among present end users still isn’t that great as it is).

Interestingly, Russell shared with delegates the SIA’s suggestion to Government that the Regulator’s initials remain in place due to the aforementioned investment – whether fiscal or time-measured, or both – in that brand. Let’s hope that this singularly most sensible of recommendations sticks when the crunch time comes.

The two key functions to be performed by the new regulatory regime when in place will be to licence businesses and oversee registration of individuals deemed ‘fit and proper’ to work within the sector (with the responsibility for the latter task devolved to employers).

Compliance and enforcement duties will continue to remain under the Regulator’s wing, with civil sanctions but one of the options open in respect of non-compliance with the Law of the Land.

Governance arrangements for the all-new Regulator are simple to digest. The Board will, in the main, consist of appointed industry stakeholders and representatives from the Home Office, Scotland and Northern Ireland.

“There’ll be a robust appeals system,” stressed Russell, “with more serious matters adjudicated by an independent appeals function.”

Focusing on business licensing, Russell explained that there’ll now be one generic licence for companies and that will fit across all sectors. By way of clarification, self-employed individuals working in the sector will not require a business licence, while special considerations will be made for smaller businesses.

Timeline-wise, an Impact Assessment will likely see the light of day next April or May, with feedback surfacing in October. Conformance with extant British Standards is slated to underpin part of the criteria for business licensing.

That’ll be music to the ears of everyone who’s been saying such standards should have played a far more prominent role in the ACS from Day One.

Clearly, checking the financial probity of companies is going to be a central task. Full compliance with the HMRC and PAYE registration, etc, are part of that mix.

To qualify for a business licence, Russell also asserted that security companies will necessarily be opened up to integrity checks. “There must be no intentional obstruction to this,” outlined Russell, “and absolutely no suggestion of previous insolvency or administration.” Again, competencies are to be measured against the relevant British Standards.

Terms and Conditions for business licensing are to be underpinned by “strict observance” of the rules. Companies must deploy only registered individuals, and there has to be full co-operation with any investigations that might be started.

Companies must absolutely maintain accurate links to individuals listed on the Regulator’s notional spreadsheet of fit and proper persons.

In-house still missing from the script

At this point in time there remains no intention – not to mention any Parliamentary appetite – for the breadth of the new regulatory regime to encompass in-house personnel. “That situation is being kept under review” is all Russell had to say on this matter.

The costing side of the new business licensing operation is interesting. All those security businesses involved will pay an initial application fee – the sum of which is undecided – and then an ongoing yearly subscription (another fee which is, as yet, undefined). What we do know is that there will be dispensations brought into the equation for the benefit of smaller businesses.

Moving on to talk about registration for individuals, the self-employed will be “fully recognised”. Access to the register of fit and proper persons is to be via a dedicated web portal.

“Individuals will have to licence themselves through an approved business,” said Russell, or alternatively what the transition director referred to as a “mediated access partner”.

Registration decisions on each individual will still rest with the Regulator, so too the “burden of appeals”.

Interestingly, the proposal is for one registration process for individuals and one application fee. “There’ll be no licence badge renewal test,” explained Russell, “provided all necessary Terms and Conditions continue to be met and the necessary fees are paid.”

The Regulator is fully expecting “no paper-based route” towards licensing in the future. Individuals will have the right of appeal against licensing decisions, but must do so through the business with whom they’re employed. “As now,” stated Russell, “prosecution will only be used as a last resort.”

Transition: how will it be managed?

“On the subject of transition management,” continued Russell, “we want to minimise inconvenience caused by the transition to businesses and individuals as much as possible.”

SIA-licensed individuals will move through to the new register and, once business licensing’s in full effect, responsibility for the ACS hallmark will be that of the business sector.

“Licensing requirements will be published for non-ACS companies,” outlined Russell.

The financing structure around all of this is wholly dependent on the governance put in place. “The overriding objective is that the new regime be self-funding,” said Russell, “with direct costs no greater than they are at present. Business licensing will level the playing field and reduce the indirect costs of conformance.”

Following on from Russell, at 11.30 am Steve McCormick – the SIA’s director of service delivery – took to the lectern. Having mentioned the fact that he felt totally at home for the day given his ever-strong Yorkshire roots, McCormick focused his 30-minute discourse on ‘Delivering Services Fit for the Future’.

In essence, he split his refreshingly honest talk into three segments, rounding on how the Regulator works today, how might it work in the future and what needs to be done to get to that point.

The current services offered by the SIA are, of course, the route towards individual licence badges and the ACS.

Talking about the former, McCormick availed us all of the knowledge that there are an average of two telephone calls required for each individual application. “There are high levels of contact between ourselves and the applicants.”

At first reckoning, you might well suggest that’s a good thing. Not so in McCormick’s eyes. “We currently operate a bureaucratic, paper-based licensing process,” he said, “characterised by relatively complex procedures and a somewhat complicated renewals process. Licensing of individuals currently runs with a 30% rejection rate. There must be something fundamentally wrong there.”

Does licensing really support the employers? “I don’t think we do support employers in the sector that well,” insisted McCormick. “There is no formal relationship between the Regulator and the employer. Processes and procedures focus on the individual.”

McCormick also suggested that “relatively complex processes” characterise the ACS, too. “There are frequent contact opportunities, but isn’t that also a reflection of inefficiency?”

Kind of service that’s needed

In perfect harmony with current Government thinking, McCormick talked about a service in the future that’s “digital by default”. ‘Going digital’ with the regulatory process drives down the cost base.

“We need to focus on the business as well as the individual. We need simplicity and less cost.”

How, though, is that Utopian vision to be realised? For one thing, by way of what McCormick described as “new contact channels”.

At this point there was heavy reference to the SIA’s newly-launched text messaging service for the sector. “Texting our message is a far more reliable way of communicating,” stated McCormick. “Most people keep their mobile number these days, but they wouldn’t necessarily inform us about any change in their address.”

The idea is that the Regulator can also let individuals know of their licence status, etc by text. “There’s less cost to us in this and a far better catchment,” said McCormick as if to embellish his earlier statements.

A “dedicated renewal process” involves developing the SIA’s e-Platform around e-Fill for what will come to be called e-Renewal. “We’ve already started work on the website,” explained McCormick, “as we don’t want people to have to go through multiple channels to get to where they wish to be.” There was talk of “red buttons” acting as flags for stakeholders. “It needs to be an end-to-end process.”

Ultimately, the SIA wants a pertaining situation wherein employers can resolve any regulatory queries posed by staff rather than them having to contact the Call Centre.

In any event, the latter is really for crisis situations or start-ups: those manning the phones do not have a full grasp of regulatory function and that should not be expected of them.

Indeed, there’s a stated desire for this ‘full grasp’ to become the preserve of the security company stakeholders themselves.

Brian Sims is group content editor for UBM Live’s Security Portfolio and editor of Security Management Today Online

Bobby Logue is managing director of Interconnective and principal of Logue Corporate