From October 1st 2013 the Gangmasters Licensing Authority will move away from mandatory inspections for all new license applicants, to a risk-based system, with the GLA using their discretion to decide whether a physical site inspection is required on a case by case basis. A full GLA briefing note is available online.
Certain criteria will still trigger an automatic inspection – notably where an applicant has previously had a license refused or revoked, or where checks with other government departments come back with adverse findings. However, the GLA have told us they expect that applications falling into this ‘always inspect’ category will be in the minority.
We do anticipate a small increase in automatic refusals without inspection. Part of this package of changes means that where the GLA finds clear evidence of recent non-compliance or criminality through initial intelligence checks, the chances are they’ll turn down the application outright rather than waste staff resource with a site inspection that confirms what they already know. This is a welcome change that will help keep criminals out of the regulated sector and help compliant businesses compete on a level footing.
For the majority of applicants though, it will be up to the GLA to decide whether a license can be granted on the strength of the application and checks with other government departments alone, or whether inspectors will still need to pay a visit.
This bodes well for administrative applications: a growing business making the transition from sole trader to limited company could well be granted a license without having to undergo another application inspection as a new legal entity, provided the GLA are happy the change is being made for legitimate reasons. Likewise, an agency whose business in the regulated sector dried up and who let their license lapse as a result may be able to get their license back without having to be re-inspected, provided they reapply within six months of the license lapsing and have a clear history of compliance.
Why make these changes though? The answer is twofold. On the one hand, the government has been clear with their Red Tape Challenge that they want to see the burden on compliant businesses lessened. This change to the application process is the first step on that journey.
More importantly though, this is about the effective use of limited resource. The GLA, like every other government department, has to do more with less, and they estimate that this move to discretionary inspections will free up 960 staff days per year. That is highly-trained, highly-experienced resource that can be redeployed to help combat the growing threats of organised crime and human trafficking in the labour supply chain, and on rooting out those labour providers that continue to operate outside of the licensing system altogether.
The REC strongly supports this approach. We have confidence that the GLA intelligence team will be able to exercise their discretion effectively to ensure that non-compliant businesses do not slip through the net. We believe that this is a positive step in recognising that the vast majority of agencies that engage with the GLA are committed to operating compliantly and competing fairly.
For those worried about an increase in risk, we have to bear in mind that the application inspection process has never been fool proof. A business that consciously sets out to operate non-compliantly will likely be able to hide evidence of that non-compliance both on an application form and at an application inspection. Those initial application inspections simply aren’t where the major breaches are caught. It is the longer-term intelligence gathering, the reports from competitors, workers and other government departments, and targeted enforcement that ultimately catches these criminals out. These changes will increase the resource the GLA has at its disposal for such intelligence gathering and enforcement efforts, and in our view, that can only be a good thing for compliant agencies.