SIA regulation and licensing: preparing for March 2006

Security Management Today (SMT): We have heard on the grapevine that First Security has been – and continues to be – something of a pioneer in tackling licensing and regulation, Jonathan. What has been your experience of the whole process to date?

Jonathan Levine (JL): “As a company, we involved Security Industry Authority (SIA) chief executive John Saunders and (then) chairman Molly Meacher right from the outset in what we were doing to meet the terms and conditions of licensing and regulation. We have taken it very seriously, engaging all of our customers – both existing and potential – at an early stage.

“I also sat on the Core Competencies Group with the other major company managing directors. For all of the meetings that were held, either I went along or a senior member of my team attended in my place.

“This year alone, we’ve invested a further £140,000 in our Human Resources operation. Much of that is to cover licensing administrators that are coming in to support the data we have accumulated. At the present time I have 147 training days lined up. Virtually 30% of the workforce is already trained to accommodate the licensing process. We’ve been using City University as one of our training centres, and that has worked out well.”

SMT: What about the logistics of all this, Jonathan? How have you coped with all of the necessary administration procedures, for example?

JL: “Regulation is proving to be a massive logistical exercise. We have monthly meetings involving the Board and senior management team, and there’s an ongoing Regulation Project Group that meets virtually every other day to monitor the training aspects. We have committed to having 85%-90% of our workforce trained, vetted and licensed in line with the SIA’s requirements before the end of this year. Hopefully, all the required members of staff will be licensed by then.

“How are we making that happen? For a start, we have invested the necessary money early on because we want to be at the forefront of raising the standards barrier. When the initial licenses are due for renewal in three years’ time, we’ll probably see more training hours being added. 32 hours’ training will not be enough. I would very much like to see us move further towards the Scandinavian model.

“The reason we have invested heavily in personnel is that there’s going to be a tightening in the market. Recruitment will be much more difficult. It is likely that we’ll have to split our operational zone into three areas.

“The majority of our customers are prepared to pay for the cost of licensing, and the biggest cost involved centres on the training and administration. Those costs simply have to be passed on.

“I recently completed an investor presentation. Afterwards it occurred to me that a perception exists suggesting one extra day of training [on conflict management techniques] will make all the difference. It will not. The same officers will be on duty post-licensing.”

SMT: How is the licence application process working out in practice? Has it been relatively simple or somewhat problematic for you?

JL: “We are genuinely concerned about the application process for the licenses. As things stand, if a list of 200-odd names is sent to the SIA, the application forms are being directed straight to the officers’ individual addresses rather than to the company. We then have to contact each of those officers and ensure that they return their forms. The whole purpose of us having appointed a licensing administrator is so that we could help officers with the form-filling.

“If there’s anything wrong with those forms they’ll be rejected and you’ll lose £190 for each wrong submission. Naturally, we cannot afford for this to happen.

“That being the case, we’re having to liaise with individual officers and ask them to visit our head office at a designated time such that we can assist them with their application forms. All of them have completed the necessary training. We don’t have a problem with that or the forms themselves. It’s the way in which the SIA has set things up that’s the problem.

“We should have had a bulk applications procedure in place from the start. There’s no doubt in my mind that the contractors are at fault here, because we ought to have lobbied for a bulk procedure and we didn’t do so.”

SMT: Have you any strong views on the Approved Contractor Scheme (ahead of the SIA issuing its final guidelines)?

JL: “To bring in licensing without first having an Approved Contractor Scheme in place smacks of putting the cart before the horse. We understand the reasons as to why this happened, but the fact is that you’ll now have security companies pushing their officers through licensing when the business isn’t being run to the right standards.

“The Approved Contractor Scheme is all to do with leadership, profitability, investment and benchmarking. Managing the business. There are an estimated 2,000-plus companies who will simply not make the grade.

“The first test case will involve, say, an officer who has worked for a given contractor for 14 or 15 years, and has proven that he or she can do the job, and yet some small point on their application form will prevent them from obtaining a licence in spite of the fact that the customer is very satisfied with their performance. I don’t know what we can do about that.”

We are genuinely concerned about the application process for the licenses. At present, if a list of 200-odd names is sent to the SIA, the application forms are being directed straight to the officers’ individual addresses rather than to the company. The whole purpose of us having appointed a licensing administrator is so that we could help officers with the form-filling

SMT: We firmly believe that private sector licensing will be rendered impotent without regular – and stringent – enforcement procedures. How do you feel about this Jonathan?

JL: “I tend to agree with you. The big issue is who will be the whistleblowers in March 2006, by which time licensed security officers are the only kind legally allowed to operate? We have invested massive money in licensing, but how will regulation be enforced? Will there be an array of detector vans driving around the country upholding the law?

“Without proper enforcement, the SIA’s regulatory regime will be meaningless.”

SMT: One of the biggest difficulties facing contractors is the issue of recruitment. There has been much talk of ‘Golden Hellos’ for officers, of course, but the bigger concern is finding a labour pool of new and better-skilled operatives to make up for the shortfall caused by those who do not qualify for a licence. How are you going to approach this problem?

JL: “In terms of where we might recruit from, we need to look at the bigger picture. The labour market will harden, certainly. Charge rates will inevitably rise. What we’ll see is that certain people will fall away as licensing comes in. Ex-police and MoD resettlements, as talked about at the last SITO National Conference (‘Together we can’, SMT, December 2004, pp16-21) will solve the problem, at least in part.

“In London, we are paying wages substantially above the norm. We have quoted for two or three jobs recently that we’ve won where the companies concerned, all of them well known, have said that they’ll pay less than our benchmarked costs for the London area. We’re raising the mark. We’ll naturally attract officers from other companies because we’ll keep our pay rates high.

“I’ve heard about the possibility of ‘Golden Hellos’ being offered. We believe that if you set the pay rates at the right level and offer the right benefits that will not be an issue. People will want to come and work for you and nobody else. We will tell the clients that as well.

“At the end of the day we simply must maintain the focus on pay rates. That will not be easy, but it has to be done.”

SMT: It’s obvious that a good many contractors and clients are choosing to ignore the Working Time Directive, but it’s an issue that will not go away. What are you doing to build this into your current and future contracts, Jonathan?

JL: “In revenue terms, about 25% of our contracts already adhere to the Working Time Directive. Customers are moving over, but many clients are waiting until the Directive is imposed before they choose to deal with it.”

SMT: Have the clients exhibited a sound understanding of your position as a security services provider faced with all of this upheaval?

JL: “Interestingly, most of the clients are being very sensible about licensing. They know that if they were to move their accounts to another contractor – be it Group 4 Securicor, Reliance or the Shield Guarding Company, for example – then they would be privy to the same proposals and answers.”

SMT: Only last month the SIA and the Metropolitan Police were forced to extend the deadline for door supervisor licenses in the Capital because too many companies had chosen to ignore the onset of regulation, and had simply ‘sat on their hands’. As a company, First is ‘playing by the rules’ and doing all the right things, but aren’t you a little worried that a similar ‘stay of execution’ will be granted in the guarding sector, thereby penalising those companies who have acted in accordance with the law?

JL: “That’s an extremely good question. What will happen on 20 March next year? Will there be an extension to the deadline of, say, six months because the industry’s licensing timetable is way off schedule?

“In my opinion, if the bulk application procedure doesn’t take shape, and pretty soon, we’re going to have a real problem on our hands. Those 200 forms must be posted to us at the company, not to individual addresses. We’re worried that passports and other confidential documents required are going to go missing somewhere along the line. I’m very nervous that I’ll end up with half of Group 4 Securicor’s licences, say, and vice versa. It’s a real worry for us at the moment.”

SMT: As yet, no-one knows about the possible cost of an annualised fee for membership of the Approved Contractor Scheme. If a fee is imposed, what do you think it should be?

JL: “You need to be thinking more laterally than that. We are currently paying the BSIA a fee to be a member of that organisation. If we have to pay another fee to the SIA, then what’s the ongoing benefit of continuing to belong to the BSIA? That for one is a fundamental question which demands an answer.”