The future regulatory regime for the private security industry

Posted by Jon Wallsgrove on
The Home Office Consultation on the proposed changes for the private security industry and future of the Security Industry Authority (SIA) ended on the 15th January 2013.

Why consider a change?

The Government wants to reform public bodies in order to improve the transparency, accountability and cost effectiveness of all public services.

It was acknowledged by Lord Taylor that the SIA had worked hard to raise standards across the private security industry from its inception in 2003. Because of this hard work the Industry had developed in its maturity and professionalism and thus the time was right to give the Industry a greater say in how it is regulated and to give businesses more responsibility for the individuals they employ.

When are we likely to see any change?

It was stated with optimism that the first phase of changes (see below) would be introduced by the end of 2013. However, some of the proposed changes will require primary legislation and it is intended that this second phase would be introduced as soon as possible thereafter (relating to the enforcement powers of the regulatory body).

It was stated in the consultation that a more accurate timetable for transition would be given at the same time the response to the consultation is published (for which no date has been set).

What is going to change?

Here we summarise what was proposed in the consultation.

  • A new regulatory body will be set up which is independent from Government.
  • The focus of the new body will be on regulating businesses and not individuals.
  • Businesses will be required to be registered with the new body, under a "fit and proper" test
  • Probable the body will be named SIA to maintain the brand status of current Government SIA.
  • Creation of an Industry skills body to develop appropriate standards for qualifications (and set criteria for individuals' licences) and develop a quality business hallmark for businesses (which will apply to the fit and proper test for businesses).
  • Businesses already registered under the approved contractor scheme (ACS) may have grandfathered rights or simplified process to apply for registration of their business.
  • Businesses which are approved by the new Regulator (known as "Trusted Service Providers") will carry out checks on individuals they employ for qualifications/experience against the criteria set. The Regulatory body will conduct criminal record checks for individuals.
  • Third parties can be registered as "Mediated Access Partners" and be permitted to make the individuals checks.
  • Individuals will be required to meet criteria set by the regulator to be licensed.
  • Individuals licensed can work across all sectors, not as now where a separate licence is required for each different sector of private security work.
  • Appeals from businesses or individuals can be made to the Magistrates Court and then the Crown Court
  • Regulatory body will publish its enforcement activities.
  • Regulatory body will be given power to issue financial sanctions.

What is the "fit and proper" test for businesses?

  1. Having a verifiable business name and address.
  2. Confirming the identity of those who hold certain positions, such as directors and partners of the business.
  3. Meeting statutory insurance requirements.
  4. Where applicable, meeting HMRC registration and compliance requirements.
  5. Ensuring that there are no outstanding County Court judgments, defaults or other adverse financial information.
  6. Supplying a Companies House registration number, where applicable.
  7. Supplying an end of year return to Companies House, where applicable.
  8. Whether there is evidence of intentional obstruction, false information given to, or contravention of the requirements and standards of regulatory and other authorities.
  9. Whether there has been any insolvency, liquidation or administration of a previous business.
  10. Whether there has been any investigation, discipline, censure or criticism by a regulatory body, court or tribunal.
  11. Demonstrating an appropriate level of competence for the licensable activities the business intends to carry out. 

What about current ACS (approved contractor scheme) businesses?

As stated it is anticipated that all such businesses would already meet the criteria for registration and will either have grandfathered rights for automatic registration or will have a simplified process of registration.

What will the cost be?

The expectation from Government is that the regulatory regime will be self funded from the fees generated from businesses and individuals. It is expected that costs will reduce overall as individuals will no longer be required to pay licence fees.

Fees for business licences are likely to be based on the number of individuals they employ. Individuals will pay a one off fee to register and then pay an annual subscription to remain on the register.

It is also stated in the Government Impact Assessment that current businesses who are SIA ACS receive a 10% discount on their insurance premium. Going forward all businesses will be assessed as fit and proper and the conclusion drawn is that all businesses will therefore benefit from reduced insurance premiums.

Individuals will pay subscriptions fees and not "renew" licences and it is said this will be cheaper. In addition removing the need for multiple licences for individuals working in more than one sector will see a cost reduction. As to when a subscription will fall due is not mentioned.

If a business does not already confirm to British Standards (BS) there will be a cost in achieving this. Micro-businesses might be exempt from the requirement to comply with BS.

The Government assesses this cost to achieve this to be in the region of £3000.

About the Authors

Jon acts for licensed premises across the UK. His unique experience includes working for HM Court service, in local government, as in-house Counsel with two pub companies and in private practice.

Jon Wallsgrove
Email Jon
023 8085 7224

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Tim is a leading Criminal and Regulatory lawyer, who defends businesses and individuals under investigation by the police and regulatory bodies and when accused of criminal offences.

Tim Williamson
Email Tim
023 8085 7372

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