RiskUKDecember2017

The Changing Face of Security Services: Security Guarding
The Future of Security Guarding in the UK
The political debate
focused on Brexit
continues at pace, but
with no clear solution
as yet in sight which is
going to be agreeable
for both parties, the
UK economy remains
in a state of flux. In
parallel, David
Mundell focuses on
challenges ahead that
will determine the
shape of the security
guarding sector for
decades to come
David Mundell: Managing
Director of Axis Security
28
www.risk-uk.com
For a number of years now, the European
Union (EU) has been the driver for much of
the regulation within the security industry,
including legislation that affects workers’ rights
(such as the TUPE Regulations, the Working
Time Directive and various rulings on Health
and Safety, etc). For its part, the Conservative
Party has previously indicated an eagerness to
remove some of these protections.
A significant risk that may come with Brexit is
a return to the previously unregulated market,
resulting in a fall in professional standards and
the further demotivation and
disenfranchisement of staff.
Leaving the EU may also result in an anti-UK
bias across Europe, thereby placing UK
businesses at a disadvantage. That scenario
would limit opportunities for future expansion.
There are already concerns that we’ll see a
relocation of European headquarters away from
the UK – and notably London – to elsewhere in
Europe. The financial services sector is likely to
bear the brunt of these moves, with the loss of
such businesses reducing some of the more
attractive accounts for the security industry.
Procurement challenges
Public sector procurement has been regulated
by EU-driven laws. Removing these laws could
result in less transparency and decreased
standardisation in procurement processes. The
end result would probably make the market
less competitive. Uncertainty about the Brexit
‘model’ is also an obstacle, since uncertainty
often breeds concern, fear and nervousness.
While the guarding industry predominantly
remains UK focused, it cannot afford to ignore
the labour pool which has employed a large
number of EU citizens over the last decade.
During this period, we’ve also seen a
dramatic erosion of margin, which has affected
the ability of companies to differentiate
themselves from their competitors through
investment in better training, quality of
operational management and, above all, the
quality of candidates available. Throw TUPE
into this mix, with its impact on all service
industries, and the full extent of the challenge
ahead becomes readily apparent.
While nobody advocates a return to pre-TUPE
days, it has impacted on the quality of
candidates available. This has recently been
highlighted by Security Industry Authority
statistics indicating a 20% reduction in licence
renewals. That will clearly have an impact on
the quality of the available labour pool.
The recent rise of nearly 4.6% in the London
Living Wage (LLW) offers equally challenging
circumstances and will test the resolve of
companies who voluntarily signed up to pay the
LLW year-on-year. To maintain margins, these
businesses will have to look at increases of up
to 7% to offset pensions, the Apprenticeship
Levy, associated holiday costs and CSP.
In an economy where the national cost of
living rises at an average of 2.5% per annum,
and salaries typically only rise at 1%, the
security guarding industry has to evolve in
order to deal with this challenge.
It’s perhaps nothing new to suggest that we
must increase the use of technology to deliver
an improved service, but this has to be
achieved at a cost that the market can bear.
Equally, the customer has to accept that their
associated costs will continue to rise unless
they change the mindset of procurement which
invariably sacrifices quality on the altar of cost
and added value.
While we, as an industry, will have to wait
and see what the real outcomes are from Brexit,
there are two definite steps that we can
collectively take to ease some of the
challenges. The first is to ensure that contract
award periods are for a minimum of five years,
with clearly laid out KPIs for training and
development through an open book policy to
ensure no hidden margins on charge rates,
thereby affording stability for all parties.
The second is to introduce more technology
to contracts with the overriding aim of having
highly-trained security officers who are capable
of dealing with all manner of incidents rather
than being ‘sentries at the gate’.