As the deadline for the Energy Savings Opportunity Scheme fast approaches, David Ward examines what he believes to be the unsuitability and inherent unfairness of the scheme for many companies operating in the security business sector.
Saturday 5 December is the deadline for compliance with the Terms and Conditons laid down within the Energy Savings Opportunity Scheme (ESOS). Announced back in 2014 and based on a European Union Directive, the ESOS is ‘a mandatory energy assessment scheme for organisations in the UK that meet the qualification criteria. Organisations that qualify for ESOS must carry out ESOS assessments every four years. These assessments are audits of the energy used by their buildings, industrial processes and transport to identify cost-effective energy saving measures.’
Initially, there was a degree of uncertainty as to whether or not this scheme would be going ahead following the 2015 General Election. While the criteria for the ESOS is simple – and few would argue the intention behind the scheme is not sound – it’s also fundamentally flawed, and particularly so with regards to business sectors such as ours.
Compliance is less straightforward
To explain the criteria in simple terms, if you employ over 250 members of staff, have an annual turnover of 50 million Euros and a balance sheet exceeding 43 million Euros (or are part of a corporate group which meets either of those criteria) then you’re obliged to comply with the scheme.
Many businesses in other industries who meet the criteria can have little complaint about ESOS. If you operate a manufacturing facility, site or office which accommodates 250 or more employees, the challenge facing you will be straightforward, at least in theory. However, the nature of security companies makes compliance less than straightforward and, indeed, somewhat unfair.
In the case of Ward Security (which for the sake of illustration we will call a ‘typical’ example of a supplier of security services which meets the criteria), over 90% of our staff are based permanently at client sites which, of course, we have no control over. We have approximately 60 staff based in four buildings while 570 do not work on our premises.
Nikhil Kamboj, our compliance director, has explained the failings of the ESOS in some detail. “As a business that takes its responsibilities seriously, we continue to invest heavily to remain compliant across a range of environmental, Health and Safety and quality management fronts (among others). Indeed, we’re very proud to have a reputation in the market as an operator delivering a very high standard of service. However, it’s hugely frustrating that, with regards to ESOS, we’re left with no choice but to invest towards compliance as it brings no benefit whatsoever to the business that we operate. I’m sure that I’m not the only person who feels this way. There will be others who share my frustration that the criteria is somewhat unfair. There doesn’t seem to be any exception in place to make allowances for companies like ours.”
Nikhil contined: “Furthermore, while the investment in assessment is costly, running into several thousands of pounds for the actual assessment on top of the time and effort of preparation, there’s no obligation to act on the findings or to address any shortcomings highlighted which makes it even more difficult to understand the rationale behind the process and justify the investment. Should we choose to relocate, we would affectively leave the ESOS accreditation behind. Quite simply, for Ward Security the benefit of ESOS compliance would be minimal, unnecessary and temporary.”
Missing the deadline
It now transpires that a great many businesses across all industry sectors will miss the deadline for compliance. Indeed, last month the Environment Agency announced an effective deadline extension until 29 January 2016 as long as businesses notified the Agency of an intention to complete by the original deadline of 5 December this year.
While this deadline may appear to relieve pressure to some small degree, it’s complicated by the news that demand for ESOS lead assessors is outstripping supply and threatening compliance. Regardless, a deadline extension doesn’t address the core unfairness of the scheme for businesses such as our own.
I have been frustrated by this issue to such a degree that I’ve written to the local Member of Parliament to highlight the flaw in ESOS and to ask for an explanation and justification of the reasoning and benefits to our business of compliance, and how it would add value to or otherwise improve the services that we offer.
I also requested our local MP to lobby for a fairer way of implementing this initiative in such a way that it takes individual company circumstances into account, with a recommendation that compliance exemption should be granted for businesses in our situation.
This is certainly not an attempt to dismiss, devalue or sidestep any moves that may make our industry more energy efficient. On the contrary. Ward Security takes its environmental performance as seriously as we do Health and Safety. To this end, we’ve recently embarked on a fleet vehicle upgrade programme which has resulted in considerable fuel efficiency and savings, and which ensures our drivers are both economical and safe.
The core issue is the unfairness of a scheme which uses a fundamentally flawed blanket criteria to decide which businesses must make the considerable investment needed to achieve compliance.
It’s an issue behind which I believe we should stand united and make clear our objections.
David Ward is CEO of Ward Security Holdings Ltd