There is a hard truth in the UK private security services industry that many clients would rather ignore: if the price looks too good to be true, it almost certainly is, and the consequences reach far beyond poor service delivery. In a sector built on trust, compliance and public safety, the relentless pursuit of the cheapest bid has created a dangerous ecosystem where criminality can thrive.
After three decades in and around this industry, I have seen the same cycle repeat itself. A client tenders for security services. The brief is sound, the expectations are high, but the decision is driven almost entirely by cost. The lowest bidder wins. On paper, everything appears compliant. In reality, the mathematics simply do not stack up.
Let’s start with the basics. A legitimate security provider operating within UK law must account for the National Living Wage, holiday pay, pension contributions, National Insurance, training costs, supervision, uniforms, insurance and a modest margin. Strip those costs back, and you quickly arrive at a minimum sustainable charge rate. When a contractor significantly undercuts that rate, there are only two possibilities: they are incompetent, or they are non-compliant. Let that sink in.
Too often, it is the latter.
The Race to the Bottom
The pressure to win contracts at unsustainable rates has created a race to the bottom. Companies that cut corners can underbid compliant providers by a significant margin, effectively locking ethical businesses out of the market. This is not just unfair competition; it is a gateway to systemic abuse.
We know from government enforcement that underpayment alone is widespread. Hundreds of employers have been publicly named for failing to pay the legal minimum wage, with workers collectively short-changed by millions of pounds. In the security sector, where margins are tight and oversight can be inconsistent, the risk is amplified.
Once a provider is operating below a viable charge rate, unlawful practices are not a possibility; they are a necessity.
Tax Evasion and Payroll Manipulation
One of the first casualties of the “cheap bid” model is tax compliance. Payments made “cash in hand”, false self-employment arrangements, and manipulated payroll systems are all used to disguise the true cost of labour.
By avoiding tax and National Insurance contributions, rogue operators can artificially reduce their costs. This not only deprives the Treasury of revenue but creates an uneven playing field where legitimate firms cannot compete.
Recent joint enforcement activity between HMRC and regulators has specifically targeted these practices. In March 2026, coordinated inspections involving HMRC and enforcement partners focused on “suspected tax evasion, unlawful employment, and worker exploitation” within the night-time economy. The message is clear: the authorities understand the link between low pricing and financial misconduct.
Training Malpractice and Licence Fraud
Proper training is expensive. It requires accredited providers, qualified instructors, and genuine assessment.
Where margins are squeezed, training becomes a box-ticking exercise, or worse, a fraud. There have been increasing concerns around malpractice in the delivery of qualifications required for licensing, undermining the integrity of the entire system.
The Security Industry Authority (SIA), established to regulate the industry and enforce licensing standards, has identified training malpractice and licence fraud as key risks. Its enforcement work has included nationwide operations targeting these issues alongside labour exploitation and immigration offences.
When individuals are improperly trained or fraudulently licensed, the implications are serious. Security officers are often the first line of response in critical situations. If they lack the competence or legitimacy to perform their role, public safety is hugely compromised.
Recommended Reading: BS7858 Vetting Made Easy
Illegal Working and Organised Crime
Perhaps the most troubling consequence of the “cheapest bid wins” mentality is its link to organised crime. Labour is the largest cost in security provision, and the easiest way to reduce it unlawfully is through the exploitation of vulnerable workers.
The UK has a long and uncomfortable history in this area. Past investigations revealed thousands of individuals working in the sector without the legal right to do so, including significant numbers of illegal migrants holding or using security licences.
Today, the problem has evolved but not disappeared. Criminal networks exploit illegal migrants, often indebted to traffickers, placing them in security roles where they are paid well below the legal minimum wage, sometimes in cash, sometimes not at all. These individuals are unlikely to report abuse, making them ideal targets for exploitation.
This is not just illegal working; it is a form of modern slavery.
The broader context is important. The UK continues to face challenges around illegal immigration and exploitation, with organised gangs facilitating entry and employment in sectors where oversight can be weak. Security, with its fragmented supply chains and subcontracting practices, is particularly vulnerable.
Enforcement and Industry Response
The good news is that enforcement is becoming more coordinated and more visible. The SIA, working alongside HMRC, police forces and immigration enforcement teams, has stepped up its activity.
Joint operations have led to arrests for unlicensed security work and immigration offences. In one such operation in Brighton, unannounced inspections resulted in multiple arrests linked to illegal door supervision. Several nationally coordinated “blitz” operations have targeted licence fraud, labour exploitation and organised criminal involvement in the sector.
Initiatives such as Operation EMPOWER have also focused specifically on labour exploitation, underpayment and fraudulent employment practices, demonstrating a clear recognition of the problem at a strategic level.
However, enforcement alone can not solve the issue.
The Client’s Responsibility
Here is the uncomfortable truth: clients are not passive victims in this system. The demand for unrealistically low prices is a primary driver of non-compliance.
When a buyer selects a provider whose pricing is clearly below the cost of legal delivery, they are, knowingly or otherwise, creating the conditions for exploitation and criminality. Due diligence cannot stop at checking licences and paperwork. It must include a fundamental assessment of whether the proposed charge rate is viable.
Ask the simple question: how are they doing it?
If the answer is unclear, evasive, or relies on “efficiencies” that defy basic arithmetic, alarm bells should ring.
Breaking the Cycle
The industry must move away from price-led procurement towards value-based decision-making. This means recognising that compliant security provision has a cost, and that cost reflects legal wages, proper training, and ethical employment practices.
Clients should:
- Benchmark charge rates against realistic cost models
- Demand transparency in pay and employment structures
- Audit supply chains, particularly where subcontracting is involved
- Engage with accredited providers and approved contractor schemes
- Access the fair charge rate frameworks published by the International Professional Security Association and the UK Security Industry Compliance Association (URL to be verified before publishing)
At the same time, regulators must continue to increase visibility and enforcement, ensuring that those who break the rules face meaningful consequences.
Final Thoughts
The cheapest bid is rarely the cheapest in the long run. It undermines legitimate businesses, exploits vulnerable workers, and, in the worst cases, channels money into organised crime.
Security is not a commodity. It is a critical service that protects people, property and reputation. Treating it as a race to the bottom on price does not just erode quality; it erodes integrity.
And when integrity is lost, the entire system becomes vulnerable.
The next time a bid crosses your desk that looks too good to be true, remember this: someone, somewhere, is paying the real price.
Protect Your Business From The Compliance Trap
Whether you’re a security buyer conducting due diligence or a provider competing against non-compliant firms, the right tools make all the difference. GuardPass connects you with the UK’s largest pool of SIA-licensed professionals—properly verified, compliantly sourced. Combine that with BS7858-compliant vetting through GuardCheck, and you remove the legal and reputational risk that cheap procurement creates.