The Operator - A new regulatory regime for the private security industry

3 March 2011

“If it ain’t broke, don’t fix it” A new regulatory regime for the private security industry

It was over a decade ago when the Government first set out proposals for the statutory regulation of the private security industry. The Government’s broad intent behind regulation was threefold; to improve standards and drive out criminality by vetting people working in the industry, to achieve more consistency amongst businesses operating in this sector and to introduce a scheme whereby quality mark recognition would be given to those operators that could reach agreed industry standards.

In March 2006, those proposals came into force in England and Wales under the provisions of the Private Security Industry Act 2001. Scotland and Northern Ireland followed suit in 2007 and 2009 respectively.

The Act established a new Non-Departmental Public Body, the Security Industry Authority (SIA), which was given responsibility for licensing individuals working within designated sectors of the private security industry and, under voluntary arrangements, for managing the Approved Contractor Scheme (ACS), responsible for approving private security suppliers.

As with any new organisation, in the early days of the SIA’s establishment, teething problems were evident. No doubt there are those who remember the delays in their processing of the initial batch of licences. Industry leaders were quick to criticise the SIA for what they saw as unnecessary “red tape” and an overly bureaucratic approach to regulation. Licence holders themselves were sceptical of the licence fees sought as being unjustified and excessive. However, despite early difficulties, it is evident that those issues have now been resolved and the commonly held view is that the 2001 Act has largely achieved the goals that it set out to deliver.

In the Licensing, Hospitality and Leisure industry this impact has been most noticeable in both the licensing of door staff and in the emergence of the ACS accredited security providers. Operators and enforcement agencies alike would have to agree that this has led to increased professionalism in this sector and has proved to be a vital safeguard towards ensuring that both staff and customers are in safe hands. Responsible operators increasingly recognise the value and deterrent effect of the SIA’s regular compliance operations, such as the recent “Operation Oklohoma” initiative. This was run across three London Boroughs and uncovered only five unlicensed operatives out of a total of 213 individuals who underwent checks. Furthermore, in 2010 the SIA has proved its pedigree as a competent regulator and an effective enforcement agency by winning the long-running case against Securiplan PLC and Sabrewatch Limited for the large-scale illegal deployment of security guards. A team from the criminal and regulatory department of Kingsley Napley successfully represented the SIA throughout the course of those proceedings.

Inexplicably, the achievements and effectiveness of this fledgling organisation have seemingly gone unnoticed by the Coalition Government. On 23 September 2010, the Daily Telegraph leaked the Government’s plans to abolish 177 Non-Departmental Public Bodies (NDPB) and the SIA was one of the organisations named on the list.

On 14 October 2010, the Government announced its programme of reform, designed at its highest level to increase accountability and reduce the number and cost of public bodies across the country. Following significant pressure from the industry, it declared its intention for the SIA was no longer abolition but rather: “Phased transition to a new regulatory regime”. No other details were given as to what that new regime would look like or on the length of the transitional period.

This proposal for reform has now been brought to fruition by the Public Bodies Bill 2010-11 (the Bill). The Bill had its first reading in the House of Lords on 28 October 2010.

Criticisms voiced in the House of Lords during the second reading of the Bill centred on the fact that the Government had apparently made no attempt to consult with those who pay for private security regulation. The proposal to abolish the SIA was said to be without proper consideration of the benefits offered by the current scheme or of the dangers that deregulation would pose to the public. Furthermore, opponents to reform have been quick to highlight that, as the SIA is completely self-financing, the Government would save nothing by its abolition. This is said to be demonstrative of the lack of proper consideration given by Government to this proposal, bearing in mind the wider cost-saving objective underpinning these reforms.

In response, the devolved governments of Scotland and Northern Ireland have already indicated that they intend to ensure that the regulation of the private security industry continues in their countries. How this works the Government says will be a decision for those administrations. However, there can be no doubt, that a return to having different systems in place for different parts of the UK would undermine the consistency that was a primary goal of the 2001 Act and would upset much of the good work that has been achieved through the establishment of the SIA to date.

On 1 December 2010, in an open letter to the Industry, the SIA’s Chief Executive, Bill Butler, attempted to provide a degree of clarity and reassurance to stakeholders on the Government’s proposals. Within that letter he clarified that the private security industry will continue to be regulated, albeit in a different form than it currently is. Whilst he was not able to provide specific details regarding the form it would take or the timeline during which the transition would take place, he did clarify that: “…ministers have said that there will not be any major changes to SIA regulation or the Approved Contractor Scheme before the London Olympics 2012.” He has also independently confirmed that: “Work and planning will be underway immediately, but it is not expected that any significant changes will take place before the Olympics in 2012. The phased transition to the new regime will then take place. Subject to agreement, the transition could be completed by 2014. Any changes will be implemented so as not to disrupt the Glasgow Commonwealth Games in 2014.”

In the meantime, the current law remains in place. It is a criminal offence for security operatives and those deploying them to work in licensable activities without a valid SIA licence. The maximum penalty for working without an SIA licence is six months imprisonment and/or a fine of £5,000. The maximum penalty for deploying unlicensed staff is five years imprisonment and/or an unlimited fine. The SIA and its enforcement partners has made it quite clear that it will continue to ensure that the law is being properly enforced. The SIA has also confirmed that the ACS scheme will continue to operate in its current form for a period of time and at least until the Olympics in 2012.

Given that reform seems to be inevitable, the clear message to emerge from the SIA is that the organisation is committed to working with the industry and wider stakeholders to ensure a smooth phased and informed transition to the new regulatory regime. To that end, the SIA has launched a new section on its website called “Future Regulation” where it intends to provide regular updates on the proposed reforms. In addition, the organisation has joined social networking sites Twitter (SIAuk) & Facebook (Security Industry Authority) with the aim of keeping the industry and wider stakeholders updated on the latest information on the work of the SIA and with developments in the future regulation of the private security industry.

With any proposal for regulatory reform there is always a risk that the proposal, whilst appearing to achieve efficiency in theory, will, in reality, come at a significant cost and inconvenience to those operators who are implementing the changes. It is therefore vitally important that the industry makes its voice heard in the ongoing debate as to what form the new regulatory regime should take. Rather than accepting its abolition as a fait accompli, the SIA is actively engaging with Government and is encouraging the industry to work with them to do the same. No one wants a return to the bad old days of an unlicensed and unregulated security industry. So, in 2011 we encourage you to take up the invitation, keep compliant with the law, keep informed about the changes taking place and actively engage with the SIA, so that the transition to the new regulatory regime delivers a system that works for the Licensing, Hospitality and Leisure industry and avoids further unnecessary cost and inconvenience to your business.

Ben Kemp

For more information, please contact a member of the Regulatory & Professional Discipline Team

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