Security firm G4S expects full Olympic Games payment

Nick Buckles, G4S: "We delivered a significant portion of the contract"

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The head of security firm G4S has said he expects the firm to be paid the full £235m contract for the Olympics despite the problems over staffing.

Nick Buckles told MPs that he expected Games organisers to pay "exactly in line with the contract".

Locog chief Paul Deighton earlier said it had paid G4S £90m up to 13 July, but nothing since the firm had said it could not deliver all the staff needed.

He said the remaining part of the £235m contract was now "up for negotiation".

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.

At a previous appearance before MPs, Mr Buckles apologised for the debacle. It had also been revealed that the company's interim results showed half-year pre-tax profits fell from £151m to £61m.

Analysis

Some £145m of tax payers money is sitting in the London Olympics bank account with G4S's name on it. But it's going nowhere. These are toxic times for the UK-based global security firm, and the Home Affairs Select Committee session showed how little sympathy there is for the company.

Negotiations are on-going over how much of its £235m contract G4S should receive. The firm's CEO, Nick Buckles, was combative in his appearance - he wants all of it. His firm needs all the money it can get.

Its failure on the Olympics could now threaten a far bigger slice of its business on public sector contracts. Remember, Nick Buckles said G4S took on the Olympics contract mainly for reputational gain.

The commissioner of the Metropolitan Police was quick to warn against a more significant role for firms like G4S. Giving evidence earlier, Bernard Hogan-Howe said they should not be involved in "investigation, patrol... and the use of warranted powers".

Even if G4S does not get all its money, Nick Buckles reminded the politicians just how much of a player his firm is, in both public and private life. Its staff deliver your money, read your meters, "we run your prisons, we run your hospitals", he said.

When he appeared before the Commons Home Affairs Select Committee on Tuesday, Mr Buckles reiterated his pledge to meet the extra costs incurred by the police and armed forces to fill the gap.

He also said there had been significant extra costs and the firm expected to incur penalties. He added there would be no profit from the Olympic Games contract and repeated that G4S expected to see a £50m loss on it.

Locog chief Paul Deighton: "We wouldn't intend to be paying them for anything they didn't do"

Speaking about G4S, Mr Deighton told the committee: "We stopped paying them just after they told us they weren't delivering, so we didn't pay them again after 13 July."

The Locog chief executive said all the money that had been paid to G4S so far was public money.

Mr Deighton said G4S had told Locog on 11 July that it would not be able to provide enough security staff for the Olympics. That was just over two weeks before the Games started.

He said G4S staff shortages during the Games had been 4% at best and 35% at worst.

Lord Coe, London 2012 chairman, told the committee: "It is difficult to look beyond their inability to deliver on the contracted number of security personnel that we were consistently assured by them that they would be able to deliver."

Lord Coe said he did not believe that G4S had deliberately misled Locog.

Charles Farr, head of security and counter-terrorism at the Home Office, was more critical of the firm, saying that before 11 July it had given no clue it would struggle to meet the contract.

London 2012 - One extraordinary year

London 2012 One extraordinary year graphic

"We were given sets of data which gave no indication whatever, even as late as 1 July, that there was going to be a problem fulfilling that contract. That data was what G4S relied upon to explain the progress of their programme," he told the committee.

G4S has said in a statement that it had had 8,000 staff on the ground over the course of the Olympics and it had delivered 83% of contracted shifts.

It added that in many cases, the military were able to be taken off duties at some Olympic sites as more security staff became available.

Mr Buckles told MPs at a previous appearance that the staffing crisis had been a "humiliating shambles".

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