MPs call on G4S to forgo £57m fee after Olympics failure
- 21 September 2012
- From the section UK Politics
G4S should forgo its £57m management fee after failing to supply the required number of Olympics security staff, a committee of MPs has said.
It should also compensate people who were accredited for Olympics work with the firm but not given any shifts, the Home Affairs Committee argued in a report on Olympics security.
The firm's Olympics contract was worth £237m, including the management fee.
G4S said the £57m management fee was "substantially" real costs not profit.
But committee chairman Keith Vaz said the firm had delivered an "11th-hour fiasco" after "recklessly boasting" that it could meet the terms of its contract.
G4S admitted last month that the Olympic contract had cost it £50m after it failed to deliver the 10,400 Olympic security guards needed in time.
The government was forced to turn to the military for the extra staff, for which G4S confirmed it would pay.
"The largest security company in the world, providing a contract to their biggest UK client, turned years of carefully-laid preparations into an 11th-hour fiasco," Labour MP Mr Vaz said.
Mr Buckles had provided the government with information that was "at best unreliable, at worst downright misleading", he added.
Mr Vaz explained: "Twenty-four hours before they admitted their failure, Nick Buckles met with the Home Secretary and did not bother to inform her that they were unable to deliver on their contract, even though he knew about the shortfall a week before."
Armed forces personnel should be considered as security guards from the outset, rather than just as an emergency back-up, the committee recommended in its report.
G4S should also offer compensation to budding security staff who had been trained and accredited to work at the Olympics but had not been given any shifts due to management errors, it said.
The report also suggested that ministers should maintain a blacklist of companies to avoid when making future procurement decisions.
A G4S spokesman said: "As explained by both G4S and Locog to the committee, the £57m 'management fee' is not a profit.
"It relates substantially to real costs which have been incurred such as wages, property and IT expenditure. The final financial settlement is currently under discussion with Locog."
At a Home Affairs Committee hearing, Mr Buckles told MPs that he expected Games organisers to pay his company "exactly in line" with the £237m contract.
He had previously described the staffing crisis as a "humiliating shambles".
Locog chief Paul Deighton earlier said it had paid G4S £90m up to 13 July, but described the remaining £147m as "up for negotiation".