South Norfolk MP Richard Bacon, a member of the Commons public accounts committee, has said that mistakes by the Home Office caused the Security Industry Authority to overspend by £17 million.

Mr Bacon said: “The Security Industry Authority (SIA), the body which licenses security guards, door supervisors and car clampers, has done reasonably well in cutting criminality out of the security industry despite a pretty unpromising start”.

“The Home Office misjudged how much running the Authority was likely to cost and set the licence fee at £190.  This fee was far too low and the SIA could not break even, meaning an extra £17.4 million of taxpayers’ money was needed to make ends meet. 

"Additional costs of £1 million were incurred by the failure of the Authority’s computer systems and delays with their replacement”. 

“The Security Industry Authority may have secured a decent level of compliance with its licensing regime, but is facing some pretty big challenges in the next few years, not least regulating security for the 2012 Olympics.  The Authority must improve its forward planning if it is to meet these challenges successfully and it would also do well to double-check the Home Office's figures in future”. 

Mr Bacon was speaking as the National Audit Office published its report on how the government regulates the security industry.  

The Security Industry Authority was established in April 2003 in order to reduce criminality in the security industry and to improve security standards. The Authority does this by licensing individuals who work as security guards, all types of door supervisors and vehicle immobilisers. Compliance with the licensing regime is currently over 90 per cent and the current cost of a licence is £245.

When the Authority was created in 2003, the Home Office provided an estimate which was used to set the licence fee at £190.  However, it was costing the Authority £215 to process each application and, as a result, the Authority could not break even and 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 system was unable to cope with the large number of late applications from a previously unlicensed part of the industry. By the autumn of 2007, the Authority’s replacement system was still not ready resulting in a backlog of applications. In total these two problems incurred additional costs of over £1 million.

The report finds that Authority is facing several future challenges, including the large number of licences to be renewed in 2008-09 and the successful regulation of security at the 2012 Olympic Games.

17 October 2008

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See also:
PAC REPORT: Regulating the Security Industry