Open letter to Shadow Home Secretary

There has to be a perk of your local constituency MP being the Shadow Home Secretary - Today I've decided to write to him. I'm not expecting real change, but wouldn't it be nice if our industry was given a bit of the focus it needs.

 

Dear Nick,

I write to you as both a constituent, and in your capacity as Shadow Home Secretary.

I run a small local security business, and we have been trading for 10 years this week, and I'm writing with concern about the state of my industry; an industry I used to love, but is now filled with even more corner-cutting businesses and people circumventing laws; removing protections in law of staff, and generally making it a joke. The problem, I feel is the lack of legislation over businesses operating within this industry, for example: if you so wished, you could carry out a 3 day course to get your personal SIA licence, and as soon as it arrived set up a business within the industry with no checks and no oversight (other than the very little oversight provided by HMRC). This is wrong on so many levels. 

The following scenarios are very real, and play out each year:

Situation A - Covid Hotels

Large national company will take on a contract at any costs (lets use the Covid hotels as an example), knowing they cannot fulfil the contract at the national level. They win the tendering process for reasons only known in the dark art of procurement. In order to fulfil the contract, the national will work with their supply chain to fill the contract, where several smaller suppliers will agree to provide staff. The suppliers who've agreed to staff the contract will set to work. Some of them will have the staff to cover, but many of them will not, and will take the work regardless; the job will then be offered out to slightly smaller security companies to fulfil, who again may have staff for parts of it, but what often happens then is you will see advertisements on social media, including recent non-English language adverts for staff on Tik Tok. 

With the above situation, what you have is a three -fold problem. 

  • You have staff who have not been screened at any level (other than their initial DBS check for the SIA). These staff are placed in positions of responsibility, and as the attached news story shows, complaints are being made (https://www.theguardian.com/world/2021/jun/26/call-for-action-after-women-in-covid-quarantine-report-harassment-by-guards)
  • You have staff who are not being paid appropriately. Whilst the master contractor, and possibly the first tier contractor may well be paying a PAYE living wage, by the time it filters down, you'll have staff being paid £8.50 an hour on a self employed basis (there is a fashion within the industry to condition staff to believe they are self employed). Each step of this "ladder" is taking a cut, there can often be more steps involved.
  • Money which could stay in the local area is leaving the area through national procurement by companies who often have large off-shore bodies, meaning the profit often doesn't even stay in the UK

Situation B - Festival Security

With festival season, this one is starting to play out again. I've been in the security industry for just shy of 24 years, and it's always happened, but hasn't been nearly as bad as the last 5 or so years.

Again, a large national company will be awarded a contract to provide security for a festival; agreeing to provide sometimes hundreds more staff than they have on their books. As part of their business model, they will then contact their subcontractors, who may also be national companies, and will in turn contact their subcontractors, and do on and so on, until you have Dai Smith an a car load of 4 of his mates thinking he's a "security firm" because he's invoiced for all 5 of them.

With the above situation, the problems are as above; from the second tier down, the staff on site will not be getting a good deal - very rarely being paid PAYE and having to masquerade as self employed and invoice. In addition to the problems above, with this being the popup entertainment industry, we often find that the guys on the ground take an eternity to get paid; Contractor A will have 30 day terms to pay contractor B, Contractor B will have 30 day terms for Contractor C, and Contractor C will have no operating capital, so will tell their staff that "you'll be paid when we're paid". The reality is that each year there are a number of staff on the industry Facebook groups who are still chasing payment for summer festival works at Christmas time. With the fact that these are security professionals, not business people, they don't understand the nuances of the small claims court and getting paid; they don't understand doing any due diligence before agreeing to sign their rights away to be a "self employed" security guard for someone else. Multiple times each year, we will see a couple of the bottom tier contractors fail, closing their business with no real repercussions and re-opening under a slightly different name in time for the next season.

What needs to change

I've thought long and hard about what needs to change, and I feel in your position on the front bench you could be in a position to bring this back to the fore. There needs to be close companionship between HMRC and The SIA, and I believe that the clean up of the industry needs to be a double headed approach.

IR35

For years now, HMRC's IR35 has been mooted around the business, but just as much chatter about IR35 coming is drowned out by the armchair lawyers who have spent much time coaching people on how to get around IR35 and conditioning them on what to say, should they be investigated. IR35 needs to be brought in and heavily enforced across the soft facilities sector; there are literally thousands of operatives who are not business people claiming to be self employed simply to help their employer save on their liabilities towards them. As a legitimate business, we struggle to compete with those who are offering what is treated as nothing more than 21st century cash in hand, which when you look at the holiday pay, NI contribution, and pension that the staff are missing out on works out to be well below the minimum wage.

Business Licensing

You may recall that towards the end of the Blair/Brown era that SIA Business Licensing was publicised as the next step within the industry; against much resistance from within the industry. This was planned in, then it was kicked to the long grass; then it was silently disappeared. I don't know the full truth of it, but I'm told it was abandoned for nothing more than not being compatible with the new regime.

Large parts of our industry's regulation pay homage to the system that was already operating in New South Wales, and other Australian states. The key step that differed in Australia is that their government brought in business licensing first; thus allowing the businesses to take some of the pressure of licensing chores from the staff, and giving the regulatory bodies a more efficient topology when it came to dealing with queries. Business licensing in the long term could do this in the UK, reducing the workload further of the SIA

We NEED business licensing. We must be regulated as security guarding companies. We are supplying people involved in the safety of others, not less our guards and the buyers need to know that they are getting a service they can trust. The system planned was flawed (for example, there was no safeguard to stop someone setting up and shutting down several security companies one after the other as a phoenix operation). The system planned gave people a grace period to start up and no limitations. What I would like to see is a medal system, where all companies must have a licence. If I were to set it up, I would do as follows:

Bronze - For new security companies, providing no director has been involved in the management of a security company which has failed or folder in the last x years. Bronze would be the minimum entry requirement, and valid for no more than the first 12 months, by which time all companies should be silver.

Silver - For companies who are within the industry and "just trading" - In addition to Bronze, these companies would be expected to abide by HMRC rules, operate a PAYE workforce, operate "in the black", and have have core procurement documents in place, such as modern slavery statements, equality & diversity policies, and so on.

Gold - Gold would be the direct replacement for the current SIA Approved Contractor Scheme (ACS) - for companies such as ourselves who have the policies and procedures in place, have accredited quality systems, and have been externally assessed - I wouldn't move gold away from the current ACS. We're currently in a 5 month queue to be assessed for our ACS badge, so this bottlenecking is something I'd also like to see streamlined.

Platinum - There is currently a third party called ACS Pacesetters who offer those with high ACS scores the opportunity to join their little club and display an additional badge where they are in the top x % of security companies. I would bring this in to the licensing scheme and have it so these companies are recognised by the licensing scheme.  

From conversations I've had with people within the Security Industry Authority, the frustration is not exclusive to myself and other small businesses; there is a desire to change, and a frustration that more is not done. I think this could be possible, were there a political passion for it.

Please let me know your thoughts - I'm happy to meet for a coffee to discuss my concerns in further detail or to help in any way I can to bring this some meaningful attention.

Kind Regards

 

Paul.