Road-testing for regulation

Do we need an MOT to make sure that the future direction the Security Industry Authority (SIA) intends to take with security consultants and private investigators is the right one, and that the regulatory infrastructure is fit for purpose? The world and the industry does not look like it did four years ago. That being the case, to take on trust – and without question – that the direction the Regulator is heading with these sectors is still appropriate may well be a fundamental mistake.

These concerns have been stimulated by trying to find evidence that further regulation in these sectors is needed, by reading the words of the Better Regulation Commission and looking at the ways in which the Regulator is currently working and being held to account.

When I represented ACPO, I do not recall undertaking work to establish that private investigators or consultants needed a licence. Mark my words… “needed a licence”. They were never seen in the same light as wheel clampers or door supervisors.

Neither do I recall that there was serious concern about criminals infiltrating their ranks – although I’m sure there are a few – or that the behaviour of the majority was unprofessional. To be candid, little was really known about what consultants and private investigators actually did for a living. Whether investigators or consultants give value for money is most definitely not a reason to regulate. That is for the market to decide.

There is another aspect to licensing either of these groups. Who, exactly, are private investigators and security consultants? I know of nobody who thinks that defining who is going to be covered by the definition is easy, or not without real question (and, most probably, legal challenge). Such lack of clarity in itself really does raise questions about the why and who it is that is actually in need of targeting.

The suspicious side of my otherwise benign nature just wonders if the fuzzy definition is really more about an income generation initiative and squaring the regulatory budget than for any good reason.

The burden of regulation

Licensing is not the only way to oversee either private investigators or consultants. I am not suggesting for one moment that there should not be a proper professional underpinning of what private investigators or consultants do (interestingly, both groups are increasingly beginning to introduce high quality professional standards which in itself is a change from 2001), but I just question whether the most effective way to achieve that is by the imposition of the kind of licensing regime that exists for wheel clampers, door supervisors or security officers.

Make no mistake that, for reasons of scale of economy and consistency, regulation in these sectors is going to look much the same as in every other sector and will be a real burden.

There has not been a Stakeholders’ Advisory Group or any other genuinely open and visible cross-industry strategic oversight body for the SIA for a very long time. It’s true that the reasoning behind abandoning the original group may well have been sound, but not to replace it after all this time is a serious omission

The Better Regulation Commission was a development of the Better Regulation Task Force, and is something of a flagship for Chancellor of the Exchequer Gordon Brown. Its aims are to reduce unnecessary regulation and administrative burdens and, ultimately, to ensure that regulation is:

• Proportionate: Regulators should only intervene when necessary. Remedies should be appropriate to the risk posed, and costs identified and minimised.
• Accountable: Regulators must be able to justify decisions at all times, and be subject to public scrutiny.
• Consistent: Government rules and standards must be joined up and implemented on a fair basis.
• Transparent: Regulators should be open, and keep regulations simple and user-friendly.
• Targeted: Regulation should be focused on the problem, and minimise side effects.

That being the case, before we go any further surely it must be essential to check out these criteria against the sectors currently in the Regulator’s sights, and the recent history of how the Regulator has regulated in other sectors? If the ‘why’ and ‘how’ of regulation do not pass the test, then further regulation is, frankly, illegitimate and should be changed or even abandoned.

One should also not fall into the trap of believing that everything the SIA is proposing for these sectors must happen because the law means it must. It does not. Much of the SIA’s work is discretionary (but this is in the small print), and need not happen unless it says so.

While Section 1(2)(e) of the Private Security Industry Act 2001 makes it clear that the function of the Authority ‘shall’ be to set or approve standards of conduct, training and levels of supervision, not only does the Secretary of State have unfettered powers (if he were asked) to moderate what it is doing (Section 2), the licensing criteria as set out under Section 7(3) already introduce significant discretion. While the criteria for licensing ‘shall’ include such criteria as the Authority considers appropriate for securing … that persons are fit and proper (identity and proberty would be the shorthand), the criteria ‘may’ include points about training and skills.

Who regulates the Regulator?

Since we are looking at a ‘may’ and not a ‘shall’, what this means in practice is that what the SIA decides on as being necessary in these areas is entirely within its discretion. So it can decide on a lot or a little regulation. The Secretary of State has the power to have none of it. Given just how much discretion the SIA has, it is fair to ask who the Regulator is accountable to for the decisions it does make. Where are the checks and balances? Who ‘regulates’ the Regulator? In law it is the Secretary of State, but that is hardly likely to affect its day-to-day activities.

What about stakeholder engagement? There has not been a Stakeholders’ Advisory Group or any other genuinely open and visible cross-industry strategic oversight body for the SIA for a very long time. It’s true that the reasoning behind abandoning the original group may well have been sound, but not to replace it after all this time is a serious omission.

Exactly whom – and how – the SIA consults, and when it does so, is again a matter entirely for it. If it doesn’t like you it does not have to talk to you. Beyond making a legal challenge of what the SIA does or plans (which only the rich can afford), there is no practical way to make sure that everyone is listened to. If one works in any of the sectors being – or about to be – regulated, one may also naturally be a little concerned about speaking out in case this incurs the wrath of the Regulator.

Given just how much discretion the Security Industry Authority has, it is fair to ask who the Regulator is accountable to for the decisions it does make. Where are the checks and balances? Who ‘regulates’ the Regulator?

While I totally accept that SIA staff are highly professional, committed and able there are very few individuals within the organisation – and even less at senior level – who have worked in the security industry. The Authority’s members are equally professional and committed, and experts in their own fields, but it must be said that their knowledge of the workings of the industry is also rather limited.

To be fair, this lack of real knowledge does make it difficult for the SIA to understand some of the issues affecting a whole range of sectors. That is a genuine disadvantage as it begins to look at new areas to regulate. As the SIA now seeks to dictate some real detail to the industry – and has for some long time – it may be opportune for the industry to have proper representation on its Authority.

My reasoning for suggesting that regulation for investigators and consultants should be put on hold is predicated on the basis that I would like to see the need and the processes underpinning that regulation looked at afresh to make sure that they are still valid. Looked at by some independent reviewer who is outside the Regulator’s office and approaches it from the same direction (and with a similar mindset to the Better Regulation Commission).

Is regulation really needed here? If so, what is the gain?

I do not mean a review through an in-house Regulatory Impact Assessment undertaken by the SIA. That approach is not sufficiently independent, nor designed for that purpose.

Genuine and open debate

Is it not time that the industry asked where the Regulator is taking it, and asked the politicians some basic questions about the ‘why’ of regulation? A genuine and open debate must be had about whether regulation in some areas is still relevant – before industry spends yet more time and money on trying to work out how what might be unnecessary gets done – and whether it needs to be implemented at all. The chance to do that with some others who now find themselves regulated was lost, but the ability to do so with the investigators and consultants is still there.

At the very least, such a review will allow everybody to be satisfied that what is planned is right. To coin the words of the Better Regulation Commission, that it is “proportionate, accountable, targeted and transparent” rather than the result of a momentum created by the Regulator… however well motivated the Regulator may be.

Without this kind of review, I fear that some players in the industry (particularly the under-represented) are going to be sacrificed at the altar of mindless, mechanistic, unquestioning and unchecked regulation allied to expensive and unnecessary bureaucracy. n