Clause 16: Right to use approved status

54.     Subsection (1) allows the Authority to approve the way in which contractors registered under clause 14 may advertise themselves as approved. (In practice, it is expected that they will be able to show a designated mark or logo on their stationery, in their advertising, etc.) Subsection (2) makes it an offence to claim approved status when this has not been awarded, or to misrepresent the terms under which it has been awarded. Subsection (3) sets out the penalty for the offence created by subsection (2). The penalty is, on conviction in a magistrates' court, a fine not exceeding the statutory maximum or, on conviction on indictment, a fine. Subsection (4) ensures that a person cannot evade the offence by holding himself out as approved without claiming to be on the register.

Clause 17: Imposition of requirements for approval

55.     Subsection (1) empowers the Secretary of State to provide, by regulations, that only approved contractors may provide specified security services. This might be done in relation to any specified activities. Regulations made under this subsection would thereby turn the voluntary approved suppliers scheme into a compulsory one.

56.     Subsection (2) makes it an offence to contravene any prohibition imposed

by regulations under subsection (1). The effect of this is that, if the voluntary approved contractors scheme is ever made compulsory, it will be an offence to provide specified security services without being an approved contractor. Subsection (3) makes it an offence for a person who has approved contractor status to contravene any conditions attached to the approval. The penalty is set out in subsection (4).

57.     Subsection (5) allows the Secretary of State, under the compulsory scheme, to build into individual approvals conditions about the handling of complaints against the relevant firm, and more generally relating to the arrangements relating to the introduction of the compulsory scheme.

Clause 18: Appeals relating to approval

58.     Subsection (1) provides an avenue of appeal to the appropriate magistrates' court against a decision of the Authority to refuse to grant approved contractor status, a decision to modify or withdraw approved contractor status or a decision to include conditions as part of an approval. Either the Authority or the original appellant may bring a further appeal to the Crown Court against the decision of the magistrates' court (subsection (4)). The appropriate magistrates' court in which any appeal is to be launched is, by virtue of subsection (3), the court for the petty sessions area for the address in respect of which the appellant is or would be recorded in the register of approved contractors created by Clause 14. Appeals must be brought within 21 days of notification of the Authority's decision (subsection (2)). Subsection (5) provides that, where renewal of approved contractor status is refused or approval is withdrawn, the approval shall nonetheless remain in force for specified periods of time relating to the lodging, deciding and effect of the appeals processes.

Clauses 19 - 22 relate to the Authority's powers of entry and inspection, and to its ability to demand the production of information.

Clause 19: Powers of entry and inspection

59.     Subsection (1) enables a person who is authorised by the Authority to enter premises owned or occupied by a regulated person (as defined by subsection(8)), other than premises occupied exclusively for residential purposes as a private dwelling. Subsection (2) requires the regulated person to produce documents or information in connection with matters which are subject to regulation under the Bill, i.e. licensable conduct, the provision of security services, and any conditions attaching to approved contractor status under a compulsory scheme.

60.     Subsection (3) requires the person exercising powers of entry under subsection (1) to do so only at reasonable times. Subsection (4) imposes certain requirements upon the person exercising the right of inspection, relating to stating the purpose of the inspection, evidence of identity and authorisation, and making a record of the inspection and giving a copy of the record to any person on the premises at the time of the inspection, if requested to do so.

61.     Subsection (5) makes it an offence:

• to obstruct a person exercising the power of entry under subsection (1);

• to fail without reasonable excuse to produce documents or information under subsection (2); or

• for a person exercising these powers to disclose information obtained in the process.

62.     Subsection (6) allows a person exercising authority under subsection (5) to disclose information obtained under that authority only for the purposes of the Authority's carrying out its functions, or for any criminal proceedings. Subsection (7) sets out the penalty for an offence under this clause.

63.     Subsection (8) defines a regulated person as:

• a holder of a licence under the Bill;

• a non-licence holder engaging in licensable conduct;

• an approved provider of security services under a compulsory approved contractor scheme, or

• a non-approved provider of security services under a compulsory approved contractor scheme, ie someone who is thereby prohibited from providing security services.

Clause 20: Guidance as to exercise of power of entry

64.     Subsection (1) requires the Authority to prepare and publish guidance about the manner in which persons authorised with the power of entry and inspection under Clause 19 should exercise it and the manner in which they should conduct themselves. Subsections (2) and (3) allow the Authority to revise the guidance from time to time, and require it to publish both the initial guidance and any revisions to it in a way which will bring it to the attention of those affected by it.

Clause 21: Access to enhanced criminal record certificates

65.     This clause amends the Police Act 1997 to permit the Authority to obtain an

enhanced criminal record certificate for anyone applying to it to be licensed as a door supervisor.

Clause 22: False Information

66.     Subsection (1) makes it an offence for anyone knowingly or recklessly to make a false statement to the Authority, in connection with the exercise of its functions. Subsection (2) sets out the penalty.

Clause 23: Criminal liability of directors etc

67.     This provides a standard "director's liability" clause, by which, if a body corporate is convicted of an offence, a director or senior officer, or anyone purporting to act in such a role, who is shown to have consented to, connived in, or been negligent in preventing that offence, is also liable to prosecution.

Clause 24: Orders and regulations

68.     This clause contains provisions about subordinate legislation to be made under this Bill. Subsection (1) defines "prescribed" as prescribed by regulations made by the Secretary of State, or determined in such a way and by such people as may be provided for in any such regulations. Subsection (2) requires the Secretary of State to make any orders or regulations by means of statutory instrument.

69.     Subsection (3) specifies the negative resolution procedure for most statutory instruments under the Bill. The exceptions are statutory instruments which aim to extend the scope of compulsory licensing of in-house security operatives beyond wheelclampers and door supervisors or which amend the scope of those sectors of the industry providing security services under contract, as defined in Schedule 2. These require affirmative resolution. Subsection (4) requires the Secretary of State to consult the Authority before making any orders or regulations. Subsection (5) allows the Secretary of State to make orders and regulations reflecting different provisions for different cases and containing any incidental provisions as he thinks fit.

Clause 25: Interpretation

70.     Subsection (1) provides definitions of the terms used in this Bill. Subsection (2) provides that references to a member of a firm include those liable as a partner under s.14 of the Partnership Act 1890.

Clause 26: Short title, commencement and extent

71.     Subsection (1) provides the name of the Act. Subsection (2) provides for commencement by commencement order. Subsection (3) extends the Bill to the United Kingdom for the purposes of the amendments made to the Police Act 1997 by Clause 21 and the amendments made to the Superannuation Act 1972, the House of Commons Disqualification Act 1975 and Northern Ireland Assembly Disqualification Act 1975, the Public Records Act 1958; Parliamentary Commissioner Act 1967, and Freedom of Information Act 2000, that are contained in Schedule 1. Otherwise (subsection 4) the Bill extends to England and Wales only.

FINANCIAL EFFECTS OF THE BILL

72.     The Security Industry Authority will be self-financing from fees. Funding estimated at £1m is required to establish the Authority and an additional £1.2m to £1.7m to cover a first year operating deficit. These monies will be recoverable through fees.

73.     There are also likely to be annually recurring and non-recoverable public expenditure costs of between £0.5m and £0.7m for court costs and possibly legal aid involved in any prosecutions arising from the new offences created.

EFFECTS OF THE BILL ON PUBLIC SECTOR MANPOWER

74.     The public service manpower necessary to staff the Authority is estimated at between 90 and 110 persons.

SUMMARY OF THE REGULATORY APPRAISAL

75.     Around 110,000 individuals each year will be required to obtain a licence upon payment of the fee set by the Authority. Employers would be able to reimburse their employees for these costs. The total annual compliance cost of the licences will be in the range £5-£6 million. This will depend upon the number of individuals who require a licence and whether or not the companies refund the licence fee. There will be a direct cost to businesses in the administrative work of checking and recording each individual's licence. The recurring annual cost of this is estimated at £1 per employee and the total per annum cost across all business in the industry will, therefore, be around £110,000.

76.     Regulation also provides for an Inspected Companies Scheme, under which businesses could, but would not be obliged to, apply for a Quality Mark. There are no compliance costs, strictly speaking, since this is an entirely voluntary scheme. For those companies wishing to apply, the annual cost will vary according to the number of employees, but is likely to average between £1000 and £2000 a year. This is similar to the amount companies currently pay under existing voluntary inspection schemes. The total cost of the scheme will depend on the number and size of companies applying, but is estimated to be in the range £1 to £9 million.

TERRITORIAL EXTENT

77.     The provisions in this Bill will extend to England and Wales only, apart from the amendments described in paragraph 67 above.

EUROPEAN CONVENTION ON HUMAN RIGHTS

78.     Section 19 of the Human Rights Act 1998 requires the Minister in charge of a Bill in either House of Parliament to make a statement, before second reading, about the compatibility of the provisions of the Bill with the Convention rights (as defined by section 1 of that Act). The Secretary of State for the Home Department has made the following statement:

"In my view the provisions of the Private Security Industry Bill are compatible with the Convention rights."

COMMENCEMENT

79.     The Bill will be brought into force by means of commencement orders.