Report urges SIA to improve

17 Oct 08

The report, ‘Regulating the Security Industry’, was carried out by The Comptroller and Auditor General, Tim Burr, head of the National Audit Office.

“The security industry has been subject to suspicion and even criminality in the past and the Security Industry Authority has done well to set up a licensing system which has secured a high level of compliance,” Burr said. “Poor cost forecasting and ineffective management of the licensing scheme have, however, resulted in the SIA spending over £17m more than planned.

“The Authority needs to improve the quality of its forecasting and its management of the scheme so that it is better equipped for dealing with future demand for licences.”

Money problems
The report lays out the problems faced by the SIA since 2003, when a licence fee was set £190 but was costing the Authority £215 to process an application. This required £17.4m of public funding.

In 2005-06, the SIA’s original system for producing licences was unable to cope with the large number of late applications it received. And in 2007, the Authority’s replacement system was not ready on time and a backlog of applications arose. These two problems incurred additional costs of £1m.

While applauding the success of the Approved Contractor Scheme, it says “licensing could have been implemented more efficiently”.

The report says: “The Authority needs to improve its strategic and operational planning to deal with future challenges successfully. These include: the large number of licences to be renewed in 2008-09; new sectors and regions to be regulated; the management and re-tendering of its managed service contract; maintaining the quality of its Approved Contractor Scheme; and the successful regulation of security at the 2012 Olympic Games.”

Formal regulation
Its recommendation for registering security businesses says: “The Authority licences individuals, but in practice the regulation of the industry is enforced through the businesses in the security industry. This de facto regulation should be made formal with the introduction of a low cost registration of private security businesses which is separate from the voluntary Approved Contractor Scheme.

“To reduce the administrative burden on companies the Authority should coordinate, with Companies House, to allow registered companies to comply with this requirement by providing information on their status in their annual Companies Act returns.”

The SIA has already started a feasibility study to consider the compulsory registration of private security companies, which will be completed in the new year.

The report says the SIA should “improve its contingency planning and be more flexible in its deployment of resources so that its systems are not overwhelmed by peaks of demand”.

Increased standards
Regarding the ACS, it says: “In consultation with stakeholders, the Authority should over time raise the required standards for the training to be provided by scheme members to employees.”

Other recommendations say: “The Authority currently has no sanction between an Improvement Notice and a criminal prosecution that it can impose on companies that engage in persistent but minor transgressions of the Act. We consider that the Authority’s regulatory powers should include a further sanction for those companies that engage in such persistent minor transgressions of the regulations.

“The new Regulatory Enforcement Sanctions Act 2008, which has created a mechanism for the Authority to acquire some further powers, could be a suitable vehicle for this change. Separately, whistle blowing provisions, like those used successfully by the competition authorities under the Enterprise Act 2002, should also be introduced.

“The Authority only has limited resources to enforce the provisions of the Act and is reliant on working with the police, local authorities and other enforcement partners to fulfil its obligations. It should improve its relations with local authorities and other enforcement partners via the Local Authority Coordinators of Regulatory Services (LACORS) and Home Office Regional Deputy Directors, so that it can evidence how the Act is being enforced.”

Compare and contrast
It says the Home Office needs to consider the performance data held by other public bodies undertaking similar roles or providing similar services when producing Regulatory Impact Assessments for new legislation.

“A key part of better regulation is that citizens should only be required to submit information to Government agencies once, since sending original identity documentation by post is a potential security risk, is costly and should be minimised,” the report says.

“Working with the Home Office the Authority has made progress, as it is now able to check the data held by the Identity and Passport Service in real time; but the Authority also needs direct access to similar data held by other Government agencies.”

Working closely
Mike Wilson, SIA Chief Executive said: “We were glad to work closely with the NAO in providing them with information and advice about the SIA. We welcome and accept the NAO’s recommendations. Implementation of the report’s recommendations is already being planned. Indeed, in some areas, progress had already been made prior to the review, such as the feasibility study to consider the compulsory registration of private security companies.

“There will always be more to do, and we will continue to improve our regulatory regime and to raise standards in the private security industry to protect the public.”

Download the full report here.

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