The Security Industry Authority’s (SIA) aims are delivered through annual business objectives and targets. They are to ensure enhanced protection of the public by creating trust and confidence in the private security industry (thanks to reduced criminality and setting and maintaining standards of probity), to create a framework for the development, promotion and spread of Best Practice such that security businesses can improve their standards and to contribute to the Home Office’s desire for an extended police family by “encouraging and supporting further engagement” of the private security industry.
The Regulator recognises the impact of regulation on the private security industry, and acknowledges its responsibility to manage it in a way that doesn’t necessarily impinge upon legitimate commercial decision-making or impose unnecessary administrative burdens. The majority of the security business sector welcomes responsible regulation, harbouring its own expectations of what is to be gained.
There is a desire from the industry to reduce staff turnover (while retaining and developing existing staff), increase the attraction of the industry as a rewarding career, create a sector recognised by the public as continually driving upwards its own levels of performance and professionalism, lay the foundations for an industry in which well-qualified people wish to participate at all levels and to actively contribute to the wider Government agenda of a co-ordinated approach to national security issues.
The focus for 2007-2008
It’s against this backdrop that the SIA has published its 24-page Corporate and Business Plan for 2007-2008 up until 2009-2010. Of course, the Regulator is required to be self-funding through charging for the services it provides. This year is no exception, and began with an increase in the application fee for individual licences as of 6 April.
Income from licensing had been less than expected (owing to less than the predicted numbers of operatives requiring a licence). An unreliable database of information in 2002-2003 was the root cause. The new fee (of GB pound 245) has been calculated by dividing the predicted expenditure over the financial years 2007-2008 and 2008-2009 by the number of licence applications expected during the same period. This accounts for an element of churn (with the annual churn rate for door supervisors set at 24% and 20% for the security guarding sectors).
The SIA’s report states: “From 2009-2010, it is intended that we will achieve cost recovery on an annual basis. The licence fee will be reviewed each year from 2007-2008 in line with HM Treasury’s guidelines.” It also asserts: “Improvements expected to the licensing process during the coming year will enhance value for money and customer service.”
While continuing to implement and deliver its regulatory regime, there are three main priorities for the SIA during 2007-2008 that will have a huge effect on how the Regulator is perceived:
- User experience (and perceptions) of its customer service levels;
- Stakeholder confidence that the SIA is effective in securing compliance and conformance with the regulatory requirements;
- How the Regulator engages with – and ultimately listens to – Stakeholders, particularly the regulated side of the industry.
Streamlined customer service
The SIA firmly believes that the majority of those working in the security industry wish to comply with the law on licensing. “Dealing with us should be a customer experience that is as simple and streamlined as possible.”
According to its Corporate and Business Plan, a “significant investment” is being made during 2007-2008 to improve the licensing process “while maintaining the robustness of decision-making and improving identity checks.” Extensive consultations with end users of the systems in place for licensing will contribute to their redesign.
During 2006-2007, high levels of compliance with compulsory licensing were achieved across all sectors. Increasing information flows from the SIA’s partner organisations – in particular the police service – have resulted in 250-plus licence revocations for those no longer meeting the accepted criminality criteria. Compliance efforts have been intelligence-led. Compliance in the door supervisor sector averages out at 97%. The SIA feels strongly that its issuance of informal advice, warnings and improvement notices has been “highly effective” in securing rapid compliance while avoiding formal proceedings.
Almost inevitably, some guarding suppliers accepted into the Approved Contractor Scheme (ACS) may not live up to the standards required. Anecdotal evidence suggests this to be true. The SIA is determined to help such companies return to ‘normal service’, but will revoke ACS status (or suspend licence dispensation privileges) wherever there are grave concerns.
Enforcement is really the key to regulation. It always has been, and always will be. The following statement from the Regulator is thus a welcome one: “During the coming year, we expect to improve our publication of operational information so that, firstly, our impact on public protection is more visible and, secondly, those companies and individuals who comply and conform can see that those who do not are being targeted and dealt with accordingly.”
The immediate future
In 2007-2008, the SIA’s work is set to focus on a combination of the operational delivery of licensing combined with improved satisfaction levels, the attraction – and retention – of applicants for the ACS, ensuring compliance with the law and standards, further implementation of regulation (as agreed by the Home Office and Scottish Ministers) and “continued improvement and strengthening” of the organisation itself.
The current standard for licence processing suggests that 80% of licence decisions will be made within six weeks of an application (that is suitable for processing) having been received. It’s widely known that this target wasn’t achieved throughout much of the past 12 months or so. The reason? The licensing system was stretched beyond its design capacity because too many applications were made on or after the 20 March 2006 deadline. The consequences of that were felt right through until September.
At the present time, it must be said that there is a fair amount of customer dissatisfaction with the SIA’s performance here. Much of that unease arises from processing times and Call Centre performance. This is to be an area of high priority for the Regulator. A redesigned system will emerge, with plans in place to measure customer satisfaction on an ongoing basis from December.
In its Corporate and Business Plan, the Regulator comments: “Using estimates based on our current experience, we believe that a satisfactory service is to reach the decision stage within 30 working days for 80% of those applications suitable for processing. This allows for those applications that need more time. As part of the redesigned system, we will explore setting different measures for different types of application to give a better assessment of our performance and manage the expectations of applicants with different levels of complexity.”
The redesigned licence application system will be implemented by the end of September 2007. By that time, a minimum of 80% of initial licence decisions will be made within 30 working days or less of the receipt of an application suitable for processing. Total ACS processing and decision time (including third party activity) for new applications will be no more than 30 working days for Fast Track and 50 working days for standard applications in 80% of cases. A further target is that 95% of all correspondence be acknowledged within three working days and responded to within ten.
ACS take-up targets
By 31 March 2008, 370 firms employing 85,000 licensable employees will have current ACS status. That number may have to be revised given that there are already 364 companies on the register. Either way, the Regulator wants to ensure that at least 75% of approved companies due for re-registration during the year continue their membership. Meantime, during 2007-2008 over 65,000 new licence applications suitable for processing will have been received by the SIA.
Regulation of the private security industry in Scotland (which comes into force in November) is designed to achieve a common system across England, Scotland and Wales. No decisions have yet been made in respect of licensing private investigators and precognition agents, although the Home Office is expected to commence a public consultation – or Regulatory Impact Assessment (RIA) – in due course. The SIA’s implementation plan for these sectors will be published next January (subject to the RIA).
The Regulator launched its new Stakeholder Engagement Strategy in May, of course. There is a great desire to improve Stakeholder understanding of the SIA’s remit, and to promote insurance industry recognition of the reduced risk delivered by regulation. Importantly, there will be much encouragement of the public sector to commit to purchasing their security services only from ACS-registered operators.
Recognition: internal and external
The SIA is continually striving for recognition – both internally and externally – of both the organisation and its operation as a model of Best Practice. Progress is to be made towards achieving this objective by:
- Commencing the Investors in Excellence Awards programme;
- Delivering its contribution to the Home Office Simplification Plan published in December last year (and designed to reduce unnecessary burdens on business);
- Develop a revised contribution to the Home Office Simplification Plan in time for publication by the Better Regulation Executive in the autumn;
- Monitoring (and reporting on) the SIA’s reputation among Stakeholders.
One wonders how all of this will be achieved in line with revenue and expenditure projections? As part of its planning for 2007-2008, the Regulator has made various assumptions and predictions concerning the amount of income it will receive during the year. That income arises from two sources, namely licence application fees and ACS application and membership fees.
The SIA is confident it will receive an income of GB pound 18.4 million (excluding project management income). The financial deficit for 2007-2008 is likely to be GB pound 2.1 million (or slightly less), but the SIA “will seek opportunities to reduce it”. By 31 March next year, the Regulator “will have made satisfactory progress to achieve financial self-sufficiency over the life of this Corporate Plan.”
Fees set up for the ACS were based on an estimate of income from an assumed market size, the level of continued membership and the costs of providing the service. The Regulator states in this Corporate Plan that “assumptions underpinning the fees will be reviewed during 2007-2008 to determine whether those fees should be increased or decreased.”
Risks and confidence levels
The predicted licence applications for the two years 2007-2008 and 2008-2009 are lower than originally estimated at the time of the Private Security Industry Bill being introduced and in the ensuing years. Based on applications received during the past 30 months, in tandem with improved market intelligence, licensable numbers can now be forecast with a degree of confidence not previously possible.
That said, several risks still remain which could result in lower than expected numbers of applications and, therefore, less income for the Regulator than envisaged:
The licence fee increase may discourage compliance, particularly in relation to initial licence take-up in Scotland, although the launch of the ACS north of the border last April should mitigate that risk;
The licence fee increase may promote early applications for door supervisor licence renewals and for Scotland, prior to 6 April this year, thereby removing income from the life of the SIA’s Plan by bringing it forward into 2006-2007;
- Churn rates are lower than predicted;
- Exemptions, exclusions and other removals from the Private Security Industry Act 2001;
- Decisions made by the purchasers of security services to avoid licensing by taking security provision (back) in-house;
- Rationalisation (in other words, the greater use of technology in place of the ‘human’ physical security presence);
- The benefits of ACS membership are insufficient to encourage re-registration.
Copies of the SIA’s Corporate and Business Plan can be downloaded by accessing the following link on the Internet:
www.the-sia.org.uk/NR/rdonlyres/2E41C640-7BB5-454C-AB66-5BD73183AE95/0/sia_business_plan-3.pdf