Full Regulatory Impact Assessment for Manned Guards & Keyholders

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BASIC COST MODEL FOR A ‘TYPICAL’ BUSINESSAppendix 6Security guarding (and some Keyholding) companies1. Market forces essentially drive the cost of training and the scale of prices involved can varydramatically. Businesses and individuals are advised to shop around for a competitiveprice. Costs for a typical security guarding business, with 50 licensable staff, are discussedusing a series of assumptions as explained in paragraphs 2-9.2. Wage levels range from £5 to £10 per hour at the current level of the available labourmarket, and this wage level has been used in Option 1.3. A substantially reduced labour market, under the toughest level of criminality criteria andcompetency requirements in Option 2, could raise the wage levels to a range of £8 to £15per hour.4. A partially reduced labour market, under increased levels of criminality criteria andcompetency requirements in Option 3, could raise the wage levels to a range of £7 to £13per hour.5. Training costs for staff would range from £60 to £90 per day for a modular four day trainingcourse. This would not be the same for all security guards currently in the industry becauseit is known that a number of individuals have already completed comparative andacceptable training. However, for these calculations it has been assumed that no traininghas been previously completed. In addition, no reductions have been made to the trainingcosts through available subsidies.6. Specific recruitment costs per member of staff range from minimal administration costs of£200 to £350 or more for a full advertising campaign. In addition to advertising, new staff(not previously employed and licensed) will need to undergo training, and licensing.Although churn rates vary significantly across the industry, an average churn rate of 24%could be applied to any calculations. Owing to the number of variables in recruitment costs,the calculations below have not included such an element and have instead concentratedon the one-off costs of licensing all staff in time for the commencement of regulation.7. In addition to the licence application fee cost, a cost of approximately £35 will be applied byawarding bodies for the registering of qualifications.8. When calculating time taken to apply for an SIA licence, this RIA has used the figure of 160hours. This has been calculated by multiplying the number of working hours lost during thetime taken if the applicant applies once the regulations come into effect and cannot,therefore, legally work while waiting for the licence application to be processed (does notapply if the business has signed up to the Approved Contractor Scheme). The averagetime to process a licence application is estimated to be 4 to 6 weeks (for the purposes of themodel below, the estimations are based on the application process taking 4 weeks. Thereason behind not using the 6 week application time is that existing arrangements in thedeployment of security personnel could be offset against the extra 2 weeks.) This wouldcover a four week period when a manned guard might reasonably be expected to work upto 8 hours per working day. However, given the marketing and communication programmesthat the SIA has established, this cost has only been applied to 10% of employees percompany, with the other 90% applying for their licences in advance of regulation.38
9. The costs are calculated using the same equation of a+b+c+d = total cost to company of 50employees, assuming the company is paying for all the licence applications, and trainingcosts :a. Total licence cost: 50 licences @ £190 per licence (although the licence covers a3 year period)b. Registering qualifications @ £35 per individual (paragraph 4 above)c. Training costs per day x 50 employees x 4 days. (In a number of cases this willbe lower by virtue of accredited prior learning)d. Time taken to apply for a licence: 224 hrs x £160 wage range per hr x 5 licences(10% of employees as in paragraph 5 above)10. Option 1 Costs £a. 9,500 (£190 for a SIA licence fee)b. 1,750 (£35 Registering qualifications)c. 12,000 to 18,000 (£60 to £90 training costs range per day)d. 4,000 to 8,000 (£5 to £10 range of wage level)Total costs £27,250 to £37,25011. Option 2 Costs £a. 9,500 (£190 for a SIA licence fee)b. 1,750 (£35 Registering qualifications)c. 12,000 to 18,000 (£60 to £90 training costs range per day)d. 6,400 to 12,000 (£8 to £15 range of wage level)Total costs £29,650 to £41,25012. Option 3 Costs £a. 9,500 (£190 for a SIA licence fee)b. 1,750 (£35 Registering qualifications)c. 12,000 to 18,000 (£60 to £90 training costs range per day)d. 5,600 to 10,400 (£7 to £13 range of wage level)Total costs £28,850 to £39,650Further to the costs above, additional costs such as improved terms and conditions to attract and retainstaff who meet the minimum requirements to get a licence will have a financial impact on companies. Itis envisaged that a higher criminality threshold will impact on the average wage rate of employees. Theoptions above attempt to show this.It is difficult to quantify the indirect costs that companies may face with the introduction of regulation.These can be identified as:39
Page 1 and 2: FULL REGULATORY IMPACT ASSESSMENT25
Page 3 and 4: FOREWORDDear RecipientPRIVATE SECUR
Page 6 and 7: • the application process;• the
Page 8 and 9: From its knowledge of the industry,
Page 10 and 11: ‣ guarding property against destr
Page 12 and 13: that the vetting procedures to whic
Page 14 and 15: the SIA should be self-financing an
Page 16 and 17: Option 25.17 Option 2 sets the crim
Page 18 and 19: • will affect organisations diffe
Page 20 and 21: 9.8 It is also important to assess
Page 22 and 23: 2. Refuse a licence toanyone with a
Page 24 and 25: Appendix 1This Consultation Follows
Page 26 and 27: If the role involves no operative o
Page 28 and 29: Appendix 3CORE COMPETENCY TRAININGI
Page 30 and 31: Professional Guard Part 2Part 2 Par
Page 32 and 33: • Unit 9••••••••
Page 34 and 35: • Understand UK and relevant EU t
Page 36 and 37: • takes account of the culpabilit
Page 40 and 41: • Management costs• Communicati
Page 42 and 43: Nov 03Nov 03Nov 03Nov 03Feb 04Mar 0
Page 44 and 45: Aug-Dec 04Sept 0440 Adverts in 12 i
Page 46: Appendix 8Industry Consultation on

Full Regulatory Impact Assessment for Manned Guards & Keyholders

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