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Terrorism Trends Affect U.K. Homeland Security Market
a&s International 2007/7/11

The world of U.K. homeland security has been kept pretty busy. New ID cards, the split of the Home Office for the purposes of fighting terrorism, and the influx of U.S. companies into the U.K. are just some of the issues exerting their influence on the U.K. homeland security market.

The world of U.K. homeland security has been kept pretty busy. New ID cards, the split of the Home Office for the purposes of fighting terrorism, and the influx of U.S. companies into the U.K. are just some of the issues exerting their influence on the U.K. homeland security market.

In December 2006, it was announced that from 2010, any U.K. citizen over the age of 16 renewing or obtaining a passport will have to get an ID card. Detailsincluding fingerprints, eye or facial scanswill be added to a National Identity register from 2008. The first identity cards will be issued in 2009. The government says it wants to give people a sure-fire way of proving that they are who they say they are. Government authorities argue that ID cards will boost national security, tackle identity fraud, prevent illegal work and improve border control. In May 2007, the Home Office estimated that the official cost of the ID card scheme had risen by US$800 million to $10.5 billion. The cost relates to expected expenditure between 2006 and 2016.

In March 2007, it was announced that the Home Office would be split into two separate departments for security and justice. It was decided that the Department for Constitutional Affairs would take control of probation, prisons and prevention of re-offenses and be renamed the Ministry of Justice. The slimmed-down Home Office will be left to concentrate on dealing with terrorism, security and immigration. Prime Minister Tony Blair said Britain's counter-terrorism capabilities were "the best in the world," but still needed to be improved, with these changes designed to provide a "step change."

As part of the changes, which were designed to build on the government's recently published Security, Crime and Justice Policy Review, the government is also set to form a Ministerial Committee on Security and Terrorism; members will meet to share information on security issues. A National Security Board will meet weekly to study specific threats to the U.K. As the Home Office shifted its focus to security, former U.K. Home Secretary John Reid warned terrorists could cause devastation through an electronic attack on the U.K.'s infrastructure. Boosting the Home Office's counter-terrorism effort is expected to cost $30 million, he added. Gordon Brown, who took over as prime minister June 27, said he was ready to be "tough in the security measures that are necessary to prevent terrorist incidents in this country."

All this happened shortly before the International Criminal Police Organization's (Interpol) warning that countries that do not provide border control officers at airports and other points of entry with direct access to Interpol's database on Stolen and Lost Travel Documents (STLD) are leaving their citizens exposed to grave danger. Terrorist use of stolen travel documents represents a gaping hole in global security, added Interpol Secretary General Ronald Noble.

In the U.K., where political decisions are often hotly challenged by the public, such moves by the government have prompted accusations of disregard of privacy, as the focus on counter-terrorism increases and tougher anti-terrorism laws are considered. Recently, the MI5, the U.K.'s counter-intelligence and security agency, was put under the spotlight as it emerged that MI5, also known as the Security Service, may have "missed" two of the July 2005 bombers who appeared in the surveillance of the 2004 fertilizer plotters, thereby allowing them to escape conviction.

In March 2004, Metropolitan and local police launched a raid, codenamed Operation Crevice, and arrested six British men suspected of planning terror attacks in the U.K. A seventh man was arrested when he returned from Pakistan in February 2005. All seven were charged with planning a bombing campaign in Britain.

The MI5 is growing fastby next year, it will have doubled in size since the Sept 11 attacks on the U.S.but it still faces major pressures on resources. This heightened questions about whether the committee has the investigative capacity to exercise effective oversightits staff is tiny and powers limited compared with its far more weighty equivalent in the U.S. Congress. There is little doubt that the U.K. is more on the alert than ever before. January 2007 saw the launch of Project ARGUS, an Association of Police Chief Officers (APCO) National Counter Terrorism Security Office (NaCTSO) initiative. More than 200 workshops aimed at retail and entertainment business owners, advising them on how to protect against, prepare for, handle and recover from a terrorist attack, are taking place across the country over the next two years.

Mass Transit Security

The U.K. public transportation system consists of a railway system of 1 billion passengers a year and 11,000 miles of track, and over 2,500 stations and 3 million passengers per day on the London Underground. Transportation has become one of the top five targets for terrorists, but relevant stakeholders are struggling to formulate effective counter-measures to manage these threats, said Friso Buker, Homeland Security Consulting Analyst, Frost & Sullivan. The sheer scale of the threat domain, as well as the required accessibility for day-to-day operations by passengers and authorities alike, make transportation one of the more difficult threat domains to secure.

So far, almost all major security spending has been focused on surveillance technologies, enhanced communications, physical prevention installations and personnel training. Only selected transportation lines, such as the Eurostar service, are secured using additional means. Recent trials of millimeter wave imaging systems at London's Paddington Station have been concluded, and the trials have resulted in a negative applicability assessment. The combined public and private sector transportation segments are planning to spend just over $4 billion over the next 10 years on security enhancements, a proportion of which will be spent on training.

U.K. Homeland Security Market

A growing trend in the U.K. homeland security market is the entrance of U.S. companies, aided by organizations such as the U.K. Trade & Investment (UKTI), said Mike Parry, Chairman of the British Security Industry Association (BSIA) Export Council. Initiatives have also been set in place for U.S. organizations and companies to come to the U.K. in order to learn from the island's expertise in matters of national security.

Overall homeland security technology procurement in the U.K. is set to exceed $13.2 billion over the next 10 years, continued Buker, with almost $8 billion of identified public-sector procurement occur ring until 2016. Ident i f ied expenditure is set to peak between 2008 and 2012, and then settle at a lower level. Closed-threat domains are not expected to display significant procurement levels over the next 10 years, but open-threat domains are showing strong demand levels for up-to-date surveillance technologies and cutting-edge communications technologies, with enough space left for innovative technologies to fill in the capability gaps.

Terrorist targeting methodology may not indicate specific security spending levels, Buker allowed, but it will identify a specific security need. Despite relatively low levels of terrorist incidents in the U.K. since 1997 (32), vulnerability to political violence is still a strong political issue. Mass transit will be one of the key markets for homeland security technology procurement in the U.K. over the next 10 years, if market challenges can be overcome. Mass transit security projects are already underway. Other projects undertaken to enhance national first responder capabilities, enhance seaport container security, and increase border security are also currently underway, but more needs to be done.

The market is an open one, offering a high level of accessibility to foreign market participants. Despite security arrangements being developed from a high base, numerous security gaps still exist; these are actively being plugged. System integration with legacy security systems is high on the list of desirables, with remote monitoring and CCTV integration being in particular demand. Despite high level of expenditure focusing on expansion and enhancement of surveillance capabilities throughout multiple threat domains, other technology types are experiencing robust demand. By default, homeland security markets around the world are generally risk-averse when it comes to adopting new technologies into the mix, but Buker believes that the U.K. has shown a tendency to test innovative new technologies. Primary research indicates that the three main market challenges to enhancing current security measuresor implementing new measures-with new equipment/technologies are budget/cost/price, applicability and effectiveness of equipment, and installation and maintenance considerations.

Other inhibitors include the wide range of stakeholders with undefined budgets, and social resistance to perceived civil liberty restrictions; while on the other end of the scale, market drivers include illegal immigration, perception of terrorist threats, political pressures, transnational organized crime, and increasing familiarity with biometric technologies.

Closed-threat domains include fixed areas with restricted boundaries and a relatively small geographical footprint, such as airports, large event spaces, critical infrastructure sites, buildings, private citizens' property, and seaports. Apt technologies for these are biometrics, screening, CBRN (chemical, biological, radiological and nuclear) technologies, intelligent video systems, sensors, CCTVs and RFID. Open-threat domains include open spaces with highly unrestricted areas such as transportation networks, borders, maritime facilities sites and public areas. Technologies applicable here are those for communication, CCTVs and radar.

The Picture So Far

Present terrorism trends indicate a continuing increase of political violence around the world, maintaining the high perception of the terrorist threat in the U.K. Despite the requirements for enhanced security levels, any technology that does not fit in with overall operational patterns willmore often than notbe rejected out of hand.

In order for the market to truly expand, security technologies must break out of their traditional threat domains, be leveraged into alternative packages, and look to enter unconsidered horizontal markets. Many public-sector homeland security programs are already underway and constitute the majority of expected homeland security procurement over the next 10 years. "It is up to industry to prove that technologies can break out of their traditional threat domains/niches and meet the operational requirements of new markets that require enhanced security," concluded Buker.

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