Private Investigators

Written evidence submitted by the Home Office and the Security Industry Authority [PI01]

Executive Summary

Home Office Ministers have recently considered the introduction of compulsory regulation of individuals undertaking private investigations activity by bringing into force existing provisions in the Private Security Industry Act 2001 (PSIA). However the current definition of private investigations in the PSIA specifically excludes activities carried out for the purpose of obtaining information exclusively for journalistic purposes. Given the wider implications and the immediate relevance of this issue to those being considered by the Leveson Inquiry into the culture, practice and ethics of the press, Home Office Ministers have decided that any final decision on whether to regulate private investigations should await the outcome and findings of that Inquiry. This is considered the best way to ensure that any future licensing regime is as effective as possible.

Background

This evidence has been prepared by the Home Office in conjunction with the Security Industry Authority (SIA), and reflects comments from officials in the Scottish and Northern Ireland devolved administrations.

The Committee’s announcement of the inquiry said that it would consider issues such as:

· Why regulation has not already been introduced, 10 years after the Security Industry Act established a statutory framework for it.

· Whether the case for statutory regulation has been made, including the potential for harm to both clients and subjects of investigations in the unregulated industry.

· Whether compulsory licensing should be part of the regulation and, if so, whether it should include competency criteria.

· The likely cost of regulation to Government and the industry.

These and other issues are covered in the body of the evidence

Currently, anyone can undertake private investigative activity regardless of skills, experience or criminality as there is no direct regulation of private investigations, although the Private Security Industry Act 2001 (PSIA) (Schedule 2(4)) contains provisions for licensing of the activity by the Security Industry Authority.

The previous Government consulted on the introduction of a mandatory licensing regime for private investigators. Formal consultation commenced in August 2007 [1] . The responses to the consultation were published in May 2008 [2] . An interim impact assessment was published in July 2008 [3] .

The Secretary of State for the Home Department (SSHD) is responsible for the development of central Government policy regarding the private security industry. The SIA advises and assists the SSHD in the development of such policy as requested and in accordance with its functions.

The SIA is a statutory body established by the Private Security Industry Act (PSIA) 2001, as amended. The SIA is the organisation responsible for regulating the private security industry. It is an independent body reporting to the SSHD, under the terms of the PSIA. Its mission is to regulate the private security industry effectively, to reduce criminality, to raise standards and recognise quality service. Its remit covers the United Kingdom.

The SIA has two main duties. One is the compulsory licensing of individuals undertaking designated activities within the private security industry; the other is to manage the voluntary Approved Contractor Scheme, which measures private security suppliers against independently assessed criteria.

Licensing ensures that private security operatives are ‘fit and proper’ persons who are properly trained and qualified to do their job.

The Approved Contractor Scheme introduced a set of operational and performance standards for suppliers of private security services. Those organisations that meet these standards are awarded Approved Contractor status. This voluntary accreditation provides purchasers of private security services with independent proof of a contractor's commitment to quality. As at 20 December 2011 there are 726 security companies with approved contractor status across the United Kingdom.

Manned guarding (which comprises security guarding, door supervision, close protection, cash and valuables in transit, and public space surveillance using CCTV), key holding and vehicle immobilising are currently designated as "designated activities" under the Private Security Industry Act 2001 (Designated Activities) Order 2006 (as amended). This means that a licence is required to carry out these activities. From January 2012 the cost of an SIA licence (which lasts for three years) is £220 (it was previously £245). As at 20 December 2011 there are 368,763 valid licences.

The PSIA provides for other activities that are currently not "designated activities" to be brought into regulation by way of an order made by the SSHD. This includes the activity of private investigations although, as set out above, the definition of private investigations within the PSIA excludes investigations carried out for journalistic purposes. An amendment to the PSIA would be required in order to alter this definition.

Home Office Ministers have recently considered the introduction of regulation of private investigations. However, given the remit of the Leveson Inquiry it has been decided that any final decision on whether to designate private investigations as a "designated activity" and whether any amendment is needed to the definition of private investigations should await the outcome and findings of that Inquiry. In regard to Northern Ireland, the issue is being considered as part of a wider consultation on the future regulation of the private security industry. As part of this consultation, Northern Ireland officials will gather views as to whether private investigations should be subject to a compulsory regulation regime in Northern Ireland.

The SIA’s mission is to be an effective, fair and efficient regulator of the private security industry. It is committed to the principles set out in the Legislative and Regulatory Reform Act 2006 and to the Regulators' Compliance Code, a statutory code of practice for regulators.

This means the SIA’s regulatory activities are targeted only where action is needed and they carry these out in a way that is transparent, accountable, proportional and consistent.

· Targeted – the SIA uses the National Intelligence Model to identify non-compliance and target their resources appropriately.

· Transparent – the SIA follows government best practice in the development of any policies or services. Where it is appropriate to do so, it works with the Home Office to conduct Regulatory Impact Assessments.

· Accountable – the SIA consults with their stakeholders to ensure that they have the opportunity to be involved in decision making.

· Proportional – the SIA operates an enforcement process that is proportionate to the degree of non-compliance encountered.

· Consistent – the SIA checks every licence application against the same set of published criteria, ensuring that their licensing decisions are fair and consistent.

The Committee should be aware that the SIA has already submitted a witness statement in the name of its Chief Executive regarding the statutory regulation of private investigators to the Leveson Inquiry. Much of the information that addresses the Committee’s main lines of enquiry are contained in that witness statement as indicated below.

Why regulation has not already been introduced, ten years after the Security Industry Act established a statutory framework for it.

Paragraphs 23 - 42 of the witness statement of the Chief Executive of the SIA, referred to in paragraph 16 above, sets out the history of this matter. These paragraphs are provided in the attached Annex to this statement. For convenience of reference the paragraph numbers as they appeared in the witness statement have been included in the Annex. We have been provided with the express permission of the Inquiry Chairman to disclose this evidence, as required by the restriction order made under s 19 of the Inquiries Act 2005 on 7 December 2011. It is the government’s view that, given the remit of Leveson Inquiry, it would be appropriate to await its report before considering this issue more fully.

Whether the case for statutory regulation has been made, including the potential for harm to both clients and subjects of investigations in the unregulated industry.

The Impact Assessment published by the Home Office in September 2008 set out the issues to consider in relation to regulation. This Impact Assessment and the Consultation document that preceded it (published in August 2007) included consideration of the harms to both clients and subjects of investigations in the unregulated industry.

[Links to these documents are provided in paragraph 5 of the background section above]

Whether compulsory licensing should be part of the regulation and, if so, whether it should include competency criteria.

The September 2008 Impact Assessment recommended that regulation should take the form of compulsory licensing of private investigation activity based on a fit and proper test and including competency criteria. This was the option that generated the largest consensus in the responses to the consultation.

The likely cost of regulation to Government and the industry.

The September 2008 Impact Assessment estimated costs of regulation to the industry (based on the licensing model at the time) as follows:

· Transition costs include the initial (three year) licence fee: £2.3m;

· Training costs: £8.3m;

· Average annual costs consist of a licence renewal fee: £2.3m;

· Refresher training: £4.6m (not all renewals will require full training).

· These costs cover a three year period. Present Value of cost is calculated over 6 years – one full licence and renewal cycle.

Because of the full cost recovery model operated by the Security Industry Authority (both currently and at the time) the cost of regulation to Government would effectively be nil.

Conclusion

The Home Office is very aware of the issues that concern the public about the activities of private investigators. However, given the remit of the Leveson Inquiry into these activities, it has been decided to await the outcome of that Inquiry before Ministers make a decision on the regulation of private investigations.

Annex – Extract from SIA witness statement to the Leveson Inquiry

Current position in relation to the licensing and/or regulation of private investigations

Paragraph 4 of Schedule 2 of the PSIA defines the activity of Private Investigations that fall within the scope of SIA regulatory powers.

It is perhaps useful at this stage to highlight sub-paragraph 4(6) of Schedule 2 which states:-

6) This paragraph does not apply to activities carried out for the purpose of obtaining information exclusively with a view to its use, or the use of information to which it relates, for the purposes of or in connection with the publication to the public or to a section of the public of any journalistic, literary or artistic material or of any work of reference.

Paragraph 25 of the Explanatory Notes to the PSIA explains that the effect of sub-paragraph 4(6) is that "the professional activities of journalists and broadcasters" are excluded from the scope of private investigations for these purposes. Therefore the SIA’s understanding is that even if private investigations under paragraph 4 of Schedule 2 PSIA were to become "designated activities" for the purposes of the PSIA and subject to regulation, the general activities of journalists would still not be regulated by the SIA.

Private Investigations Regulation Chronology

The SSHD has not yet designated private investigations a "designated activity" for the purpose of the PSIA and private investigations are not therefore regulated by the SIA. However, the SSHD has asked the SIA to assist in developing policy in this regard over the past few years as the SSHD has considered so designating private investigations. It is worth noting (and this will be elaborated on below) that although there was an intention to regulate private investigations, this did not happen for practical reasons and has latterly been superseded by the review of private security industry regulation as a whole.

In line with the approach taken for other industry sectors, informal consultation activity was undertaken by the SIA during 2005 and 2006 with individuals and representatives working within the private investigations sector to ascertain views on the designation of private investigations under the PSIA. Although the responses gathered during this process are not formally documented, the views and perspectives captured were reflected in the formal consultation document that followed.

On 1 August 2007 a formal consultation document was published by the Home Office, presenting the options for licensing the private investigations sector. Responses were invited from existing stakeholders, organisations and individuals with an interest and the wider public over a 12 week period between 1 August and 24 October 2007.

Following the conclusion of the consultation, an analysis of the responses was published by the Home Office in May 2008 which indicated a consensus in favour of the preferred option for competency based licensing of the sector.

In line with better regulation principles and procedures, the publication of responses was followed by more detailed consideration of the costs, benefits and impacts of competency based licensing (the preferred option) This was approved by Ministers and published by the Home Office as an Interim Impact Assessment in September 2008.

In March 2009, following the publication of the Interim Impact Assessment, the Home Office and SIA agreed that licensing private investigations would be a priority (alongside business licensing and regulation of enforcement agents).

In September 2009, following a comprehensive consideration of options and timescales the SIA did not consider that it would be feasible to introduce regulation in 2010 for the following reasons; the SIA informed the Home Office of the same:

· there would not be sufficient training availability and capacity to allow individuals to obtain the required qualification for licensing;

· the Home Office required a revised Impact Assessment; and

· it would coincide with the proposed re-tender of the SIA Managed Service Provider Contract for its licensing services and the SIA would not have sufficient resources to handle the introduction of additional licensed sectors.

On 22 October, 2009, the SIA Chair and I [SIA Chief Executive] met with the then Minister and the need to address regulation of the Private Investigation sector was raised. Consequently licensing of the private investigations sector was provisionally re-scheduled for 2011 or 2012. This was endorsed by the Home Office following its inclusion in the SIA’s Corporate and Business Plan.

The project was re-launched by the SIA in February 2010 with a planned Open for Business (i.e. able to accept applications from individuals) date of April 2011 and an Enforcement date of October 2011.

Independent research was also commissioned in March 2010 to ascertain a more up to date estimate of the licensable population for the sector and the SIA began to make practical preparations in anticipation of private investigations becoming subject to regulation.

Following the announcement of the May 2010 General Election, there was a general instruction from the Cabinet Office not to make any public announcements regarding new policy developments because of pre-election Purdah. This included the future regulation of private investigations.

The moratorium on public announcements was maintained following the formation of a new government to allow time for discussions with new Ministers on policy priorities.

This situation remained unchanged until September 2010 when, with future progress on the project becoming impossible without further Home Office involvement, the decision was made by the SIA to suspend all SIA activity related to the licensing of private investigations.

Following the Arms Length Bodies Review, published in October 2010, the Government announced its intention that regulation of the private security industry would no longer lie with an NDPB and that there would be a "phased transition to a new regulatory regime".

At the request of Ministers, the SIA has since led work to develop a framework for the new regime, working closely with the industry through a Strategic Consultation Group, conferences and forums and with other stakeholders and officials in the Home Office and the devolved governments of Scotland and Northern Ireland.

The Government accepted the framework for a new regulatory regime proposed by the SIA in early 2011 and announced that new legislation will be introduced at the earliest opportunity to abolish the SIA in its current form and introduce a new regulatory regime for the private security industry.

The new regime’s primary focus will remain the protection of the public through regulating to support the existence of a fit and proper industry. Regulation will focus on business licensing, but a register of individuals approved to work in the industry will be maintained. The intention is that the new regime should recognise developments in the industry since the introduction of the current regime, including the increasing maturity of the industry, and build on the considerable investments already made".

January 2012