SV05: PSA Survey Results-Is Licensing Working?

"Cowboys are still operating." "The Private Security Authority is powerless to prosecute". "Licensing is not policed properly." "No proper policing means unlicensed companies are still operating."

The comments above are just a few of those given in response to the recent survey conducted by the Irish Security Industry Association to assess the impact of licensing on the industry and ascertain the attitudes of licensed operators.

Mr Barry Brady, executive director of the ISIA, said, "The ISIA conducted research in 2007 when we were about one year into the licensing process. However, recently we have been getting increasingly negative feedback from our members with regarding to regulation of the security industry and the Private Security Industry, which prompted us to conduct this follow-up survey, the results of which make for some interesting and indeed, concerning reading."

Perhaps, one of the most telling results from the survey is that the number of people who feel licensing has been a good development for the security industry has dropped from 91 per cent in 2007 to just over half at 52 per cent in 2009.

Dissatisfaction

"The ISIA has been a long-time advocate and full supporter of regulation and licensing. But it is extremely worrying that three years into the licensing process, the number of people who see it as a positive development has dropped so dramatically. This issue needs to be addressed by the PSA as a matter of urgency as it is imperative that companies remain engaged and committed to the licensing process. We fully believe that licensing was the first step towards a more professional industry but if operators can no longer see the benefits, then there is a real fear that some will disengage and operate outside the process and indeed the law. This would have devastating consequences for the industry and one which we must avoid at all costs."

For those who felt licensing was a good development, the main reasons were that they felt that the industry needed regulation (66 per cent) and that licensing creates a more professional image (58 per cent). In contrast, 80 per cent of respondents who indicated that licensing was not a good development felt that cowboys are still operating in spite of regulation while 84 per cent felt it has introduced a cost for which they can see little return.

The ISIA survey was issued to over 350 licensed operators throughout Ireland and included both ISIA and non-ISIA member companies. The sample included companies from all sectors of the security industry and covered small, medium and large companies with the recipients at managing director, owner or senior manager level.

Over half of the respondents are dissatisfied or very dissatisfied with the PSA in comparison to a quarter who are satisfied or very satisfied. Of those who are satisfied, they have indicated that the PSA "has made some progress but are low on manpower" and accept that "regulation has been positive but did not go far enough to tackle non-compliant companies". Reasons for dissatisfaction included costs, enforcement and communications with comments including "there are two few inspectors and rogue installers are never prosecuted," "it costs too much money for no return," "Poor record on enforcement. Erratic decision making. Poor service levels."

"The responses which have come through the survey are indicative of what our members have been saying," adds Mr Brady. "Cost and enforcement are the big issues with licensed operators feeling that while they are exposed to the additional costs of licensing which they can't pass on to the customer because rogue operators who appear to operate with immunity from prosecution, will undercut them."

Enforcement

Indeed, the issue of enforcement is the one with which security providers are most unhappy. Almost 70 per cent of licensed companies are dissatisfied or very dissatisfied with the enforcement as opposed to 18 per cent who are satisfied or very satisfied. This compares to 35 per cent dissatisfaction and 33 per cent satisfaction levels in 2007. While 60 per cent of respondents have reported unlicensed operators to the PSA, they claim that the majority of them are still trading either having been investigated by the PSA or because there was no follow-up from the PSA. For those who do not report, 40 per cent did not do so because they felt it was a waste of time as the PSA take no action while 17 per cent felt the PSA are fighting a losing battle. The biggest impact of unlicensed operators to the industry is that they are undercutting legitimate businesses. Two thirds of respondents (63 per cent) have lost business to unlicensed operators and while it is difficult to fully quantify an industry average, individual estimates range from contracts valued from €10,000-€150,000.

"Enforcement is a big area for concern. When licensing was introduced, the expectation was that the PSA would eradicate rogue operators but unfortunately that has not been the case and licensed operators who are operating within the law feel that they are the ones being penalised by paying the license fee." explains Mr Brady. "The ISIA accepts that enforcement has to be conducted within the process of the law and that building a valid case for prosecution can be a slow and onerous process but the reality is that after four years of licensing, unlicensed operators are still in business and it is the genuine, law-abiding security provider who is paying the price not only through the license fee but also through business lost to rogue traders.

"The PSA need to address the issue of enforcement to reassure the security industry that licensing can and will work. We need to see more inspectors on the ground and more unlicensed operators either put out of business or changing their ways, getting licensed and working within the law."

Communication with the PSA was addressed in the survey with 46 per cent of respondents dissatisfied or very dissatisfied.

Guarding v Installers

Two of the biggest sectors within the security industry are manned guarding and alarm installers and in collating the information, the survey compared the views of the two divisions, with interesting results. There is a marked difference in the opinions of those operating in manned guarding where 80 per cent felt that licensing has been a good development. In contrast, only 35 per cent of alarm installers felt it was a good development for the industry. Of those alarm installers who disagreed, 91 per cent felt it was a cost for which they see little return.

Satisfaction with the PSA mirrors that of those who feel licensing is a good development. Two-thirds of alarm installers are dissatisfied or very dissatisfied with the PSA as opposed to only one quarter of guarding companies. Cost and enforcement are cited as the main issues. There are higher levels of dissatisfaction from both divisions in relation to enforcement but again installers are more dissatisfied with 74 per cent dissatisfied or very dissatisfied against 57 per cent of guarding companies.

"Many alarm installers are small business," explains Mr Brady. "Indeed over 90 per cent of respondents in the alarm installer division are companies with less than 20 employees. The cost of licensing on small businesses can be a substantial burden, particularly in these recessionary times. But if they feel that they are not getting any value for money and that the PSA is not doing enough to eliminate unlicensed operators, their dissatisfaction is understandable. The ISIA appreciate the reasons for their dissatisfaction and are calling on the PSA to take onboard the results of this survey and to resolve the issues as soon as possible. Small businesses are the backbone of our economy and we need to do all we can to protect them and that includes the PSA."

Changes

The survey asked respondents to indicate what changes they would like to see within the PSA. Apart from very radical suggestions which included disbanding the PSA, the changes fell into four broad categories :

• Costs

The main change called for is to reduce fees

• Enforcement

Licensed operators want to see more prosecutions and more enforcers working on the ground. They have also suggested that the PSA should go after the makers and sellers of alarm equipment.

• Licensing

Alarm installers are calling for licensing for individual installers to be introduced

• Communication

A call for better engagement with the security industry and more transparency.

"The security industry has made great progress over the last number of years," concludes Mr Brady. "At the ISIA, we welcomed regulation and recognised the raised standards and renewed professionalism of the industry. But there are still major issues to be addressed. The levels of dissatisfaction with the PSA and the licensing and enforcement process is extremely worrying and needs to be addressed immediately. To ignore the opinions of the industry is a risk the PSA cannot afford to take."

A full copy of the survey can be downloaded from the ISIA website on www.isia.ie