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Executives from Over 70 Leading Security Companies and Associations Urge Government Action in Letter on Business Licensing Reform - #BusinessLicensingNow 19 Mar 2025

 
Today, the UK’s private security sector has come together in unity, signing a formal letter to the Home Secretary and the Minister for Security urging the implementation of business licensing across the industry. The letter has been signed by 11 trade organisations representing private security companies and over 50 executives from the largest security firms in the UK.
 
This appeal follows the recent announcement by the Minister for Security at the Home Office Security and Policing Conference, where he confirmed the Security Industry Authority (SIA) now falls entirely within his ministerial portfolio. Additionally, the Minister acknowledged the critical opportunity ahead, as highlighted in MR8 of the Manchester Arena Inquiry, where business licensing was identified as a key reform.
 
As the security sector stands at a pivotal moment, industry leaders urge the Government to recognise this statement as an unequivocal endorsement of business licensing from the sector in its entirety. This regulatory reform is essential to raising standards, enhancing oversight, and ensuring public safety across the UK.

 

Addressing a Regulatory Gap that Threatens Public Safety
The existing framework, introduced over 20 years ago, only mandates licensing for individual security operatives, leaving businesses largely unregulated. With over 500,000 licensed security operatives in the UK, it is estimated that one in four could be impacted by gaps in the current system. Furthermore, approximately 12,000 security supply businesses remain untraceable by key government agencies, including HMRC and the SIA, creating vulnerabilities that facilitate exploitation, tax evasion, and even infiltration by organised crime. 
The absence of business licensing not only compromises public safety but also results in substantial financial losses for the Government. Unregulated security firms contribute to an estimated annual tax gap of £1 billion due to non-payment of taxes and fraudulent claims. Business licensing would rectify this by providing HMRC with the necessary oversight to ensure compliance, levelling the playing field for responsible operators.
 
Enhancing Public Safety and Supporting National Security Initiatives
At a time when counter-terrorism measures such as Martyn’s Law are being introduced, business licensing would ensure that security firms meet minimum standards, reinforcing the industry’s role in safeguarding the public. The private security sector is increasingly relied upon to supplement policing resources, operating in complex and high-risk environments. Without regulatory oversight at the business level, accountability and standards remain inconsistent, putting public safety at risk. 
Currently, the voluntary Approved Contractor Scheme (ACS) covers fewer than 800 security businesses, leaving the majority—more than 12,000—operating outside of a structured regulatory framework. This disparity in standards is further reflected in tax contributions; ACS-accredited companies contribute over £1.2 billion annually, while non-participating firms contribute just £260 million. A mandated licensing system would close these gaps, ensuring all operators adhere to the same high standards and contribute fairly to the economy.
 
A Critical Step in Combating Organised Crime and Labour Exploitation
The lack of business licensing has allowed organised crime groups to exploit weaknesses in the system, circumventing HMRC regulations, abusing immigration laws, and violating Gangmasters and Labour Abuse Authority (GLAA) standards. These illicit activities not only undermine community safety but also put legitimate businesses at a competitive disadvantage. By implementing business licensing, the Government can eliminate these loopholes and dismantle networks that profit from regulatory gaps.
 
Financial and Operational Benefits of Business Licensing
While an initial investment in licensing infrastructure would be required, the long-term benefits far outweigh the costs. Fees paid by licensed businesses would cover regulatory expenses, and the increased tax compliance would generate substantial revenue for the Treasury. Additionally, including the SIA’s regulatory focus of 500,000 individual licences to include approximately 10,000 business licences would streamline oversight, reducing administrative burdens and improving efficiency.
This reform presents an opportunity to transition from individual licensing to a dual system of business licensing and individual registration, ensuring frontline operatives meet required training standards while linking their employment to regulated businesses. Such a model would enhance compliance while offering a more cost-effective approach for government agencies.
 
A Timely and Necessary Reform
The private security sector plays a crucial role in public safety, and as the SIA transitions into its new role as the regulator for Protect Duty, now is the time to strengthen the industry’s regulatory framework. With the lessons from the Manchester Arena Inquiry and the introduction of Martyn’s Law, the timing is right to implement long-lasting and critical changes to the sector. Business licensing is not only essential for national security but also for protecting the industry’s integrity, ensuring fair taxation, and safeguarding the public from unregulated operators.
Given the urgency of these concerns, the private security industry formally requests a meeting with the Home Secretary and the Minister for Security to discuss the immediate implementation of business licensing. This measure is critical to securing the future of the industry, protecting the public, and ensuring that the UK’s security sector operates to the highest possible standards.

 

Michael Kill Chair of the UKDSA & CEO NTIA Says “The implementation of business licensing for the private security sector is long overdue. The current regulatory framework has significant gaps that put public safety at risk, particularly within the broader hospitality and nighttime economy sectors, where security plays a critical role. The findings from the Manchester Arena Inquiry and the subsequent introduction of Martyn’s Law, make it clear that stronger regulations are needed to enhance security measures, close loopholes, and ensure greater accountability.”
 
“The UKDSA & NTIA fully support the industry-wide call for reform, advocating for higher standards, protection against worker exploitation, and a more robust regulatory structure. We have welcomed the recent statement from Security Minister Dan Jarvis, in favour of considering key reforms from the inquiry, and feel that now is the time for the industry to unite and present a collective voice in favour of business licensing, ensuring professionalism, responsibility, and public confidence in the private security services.”
 
Graham Bassett CEO CSC Says “We believe that there is a justification for Business Licensing in the Security industry.  While we do not wish to add red tape to businesses this could be a suitable replacement for the existing ACS scheme. We look forward to further discussion on the practicalities and how this impacts quality security organisations as well as those it is designed to eradicate.”
 
Anne Marie Chebib Chair of UKCMA Says “UKCMA urges the government to implement mandatory business licensing in the private security sector to enhance public safety, tackle crime, and ensure fair taxation. With an estimated over £1 billion lost annually to tax fraud in the security industry, mandatory business licensing is a financial and public safety imperative.
Without urgent reform, unregulated security operators will continue to undermine policing efforts, exploit workers, and enable organised crime.”
 
Mike Reddington CEO BSIA Says “The BSIA and its members support the implementation of Business Licensing in the professional security industry as this will provide traceability of all companies operating in the sector and identify any potential unscrupulous operators. It will also assist in ensuring company compliance to HMRC rules, mitigate potential employee exploitation, create a minimum standard of operation, and improve the safety and security of the general public.”
 
John Lambert Chair IPSA Says “I think the vast majority of the industry support business licensing to tackle the widespread issues of labour exploitation and other corporate offences. By moving the focus onto the businesses rather than the individuals working in the industry, we hope to see better compliance, which in turn will improve the lives of those on the front line. I can’t think of another example of an industry collectively asking for more regulation, which demonstrates how keen we are for the decision not to implement Business Licensing reconsidered. The fact that the recommendation came off the back of an inquiry for a tragedy where 22 people lost their lives, also reinforces the need for change.”

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