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The Security Industry Authority, the body which licences security guards, door supervisors and vehicle immobilisers, has secured a high level of compliance by people working in the industry with the requirement to be licensed, the National Audit Office has today reported. As at the end of May 2008, the Authority had issued over 248,000 licences and compliance is over 90%. Its efficiency has, however, been hampered by poor forecasting of licensing demand and costs and difficulties with the computerised systems procured to process licence applications.

When the Authority was created in 2003, the licence fee was set at £190 but it was costing the Authority £215 to process an application. As a result, the Authority needed an additional £17.4 million of public funding between 2004-05 and 2007-08 to carry out its work.

In the winter of 2005-06, the Authority’s original system for producing licences was unable to cope with the large number of later than planned applications the Authority received. In autumn 2007, the Authority’s replacement system was not ready on time and a backlog of applications arose. These two problems resulted in the Authority incurring additional costs of £1 million.

The Private Security Industry Act 2001 set up the Authority to regulate individuals, but in a number of other countries the equivalent bodies also regulate businesses. The Authority operates a voluntary Approved Contractor Scheme for security businesses, designed to improve standards in the industry. There are currently over 500 Approved Contractors, which covers more than 55 per cent of the licensable security population. But there are more than 2,000 businesses in the industry ranging from large national companies to small businesses with few employees. Under the current legislation the Authority does not always know which businesses employ which individuals. The NAO has recommended that in addition to individuals all private security businesses should be registered with the Authority. 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.

Tim Burr, head of the National Audit Office, said today:

"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. Poor cost forecasting and ineffective management of the licensing scheme have, however, resulted in the SIA spending over £17 million 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"
 

Notes for Editors:

1. Press notices and reports are available from the date of publication on the NAO website, which is at www.nao.org.uk. Hard copies can be obtained from The Stationery Office on 0845 702 3474.
2. The Comptroller and Auditor General, Tim Burr, is the head of the National Audit Office which employs some 850 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.