MPs call on G4S to forgo £57m fee after Olympics failure

 

Committee chairman Keith Vaz said a "high risk register" was needed

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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.

'Shambles'

G4S chief Nick Buckles briefs MPs on 11 September: "We delivered a significant portion of the contract"

"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.

Military at the Olympic Park The government was forced to call in the military to plug the shortfall in security staff

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".

 

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  • rate this
    +2

    Comment number 655.

    They should not get a penny. They signed a contract to deliver a complete package and they failed. The money that they are owed should be split up and given to the troops who lost their leave.

  • rate this
    -9

    Comment number 628.

    Not defending G4S but I feel they were also let down slightly. In order to employ that amount of people for a short period cannot be done too far in advance otherwise when the staff are required they have either got other employment or changed their minds. However the accreditation to receive an SIA licence is done by the Government (and very slowly). Also some work was also sub-contracted

  • rate this
    -7

    Comment number 493.

    Organising the Olympics was a very large undertaking. I'm not defending G4S, but who was supposed to monitor (project manage) this particular aspect of the Games? Someone in the government dropped the ball and is not taking their share of the blame. Not knowing the status until too late is the Home Secretary's fault. She should be ashamed of herself for her ineptitude and admit the truth.

  • rate this
    +19

    Comment number 492.

    My story: I was contracted by G4S in February to undertake Team Leader duties at the Olympics. I heard nothing for months until 2 weeks prior to the Olympics starting and this was just a single day of training! I had no further work offered by G4S. As I am redundant I was very much in need of an income like many others were! It's a disgrace!

  • rate this
    +21

    Comment number 418.

    Isn't this simple ? G4S were contracted to supply certain services and failed so to do. A clear breach of contract and thus rendering them liable to punitive measures. If G4S wants to play hard ball over this then the Govt should do what any customer does when dissatisfied take their business somewhere else (ALL OF IT) that should make G4S shareholders wake up.

 

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