Contractors: it’s time for you to deliver!

The impression that I have from my side of the fence (ie the client side) is this. OK, the security industry has been chattering on these past eight to ten years about low margins and difficult times, etc. I’m sorry, but the industry itself has perpetuated this situation. The blame cannot solely be placed upon the smaller contractors undercutting the market and customers taking lowest price.

Many procurement managers prefer to go with the ‘big names’ in the contracting sector because they know that those companies will have a greater (but not necessarily better quality) amount of resource available to fulfil the contract. Particularly so when the inevitable shortfalls arise.

Without exception, all security companies initially promise so very much, but actually deliver substantially less. Having given wonderful presentations of how good they are, and then being awarded the contract, within a short space of time contractors often start to show cracks and become like every other supplier, it seems, in allowing their service delivery levels to fall.

In many circumstances, security companies receive what they rightfully deserve. I can assure you that those of us who are in the procurement arena will be far less forgiving than we are at present when the costs of security really begin to increase post-licensing, particularly if those increases are as high as the industry is suggesting.

All of which brings me neatly to my second point. I’m told that the security companies are going to ‘pay’ for officers’ licenses on their behalf and add this cost (plus the cost for covering an extra day of training) to the charge rate. Effectively, then, the industry will be palming off the £190 licensing cost per officer directly on to the client. Why?

When Molly Meacher was still chairman of the Security Industry Authority (SIA), I raised a point with her regarding the tax position of security officers and the whole issue of licensing. I said: “If security officers are required to be licensed by an Act of Statute in order to carry out their role, shouldn’t those officers be able to claim this as a legitimate tax concession?” Molly admitted that this issue had never been raised before, and claimed she would look into it.

Subsequently, I had this matter investigated by Her Majesty’s Inspector of Taxes. I now have written confirmation that, yes, security staff who require the licence to be able to carry out their duties can indeed claim the full amount of the cost of the licence as a legitimate addition to their own personal allowances – making the cost element of the licence ‘cost neutral’. Members of staff may make their claim during the accepted tax year.

If security companies made arrangements to pay for the licenses up front, but then deducted the cost in 12 equal instalments from the employees’ pay-roll (in much the same way as they do with season tickets and the like), employees would be no better or no worse off.

Importantly, the cost of the licensing would be borne by central funds (as it is an Act of Statute) and not passed on to clients.

Yes, there will be an extra day of training and perhaps a small increment for administrative charges to bear in mind, but the cost of the actual licence (renewable every three years, of course, so it will surely rise) would be legitimately claimed from elsewhere. And so it should be! Why would anyone pay for something that they – legitimately and rightfully – do not have to?

The SIA’s licensing system is undoubtedly a force for good. The benefits to be gained from better training and career development will make security a more attractive, longer term option for many. However, to some of us it really does appear as though the industry is rubbing its hands with glee after what it may perceive to have been years of low margins as the proverbial ‘cost boot’ is now seemingly on the other foot. That of the client.

The cost of security will surely rise. If it does, then so must service delivery levels offered by contractors. Standards have to improve, and improve across the board. Key Performance Indicators and Service Level Agreements will need to be implemented where they do not presently exist, and be tightened 100% wherever they do.

Any under-performance in security’s Brave New World may – and indeed should – be heavily penalised.