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
    +9

    Comment number 496.

    They failed to deliver, so dont pay them
    Give the £57M to the members of the Armed forces and police who had to do the job at short notice. Even better invest more in forces and police.

  • rate this
    +3

    Comment number 495.

    Irritates me that Vaz is saying it but he's right.
    It beggars belief that we are still using A4e despite all the fallout about huge bonuses for failure and the criminal investigations.It's frightening that a company like G4S is even being considered for emergency services work.

    The like of Liam Fox are very vocal about relaxing laws on sacking incompetents yet this, it seems,is acceptable?

  • rate this
    -3

    Comment number 494.

    Perhaps MPs would like to have their salary & expenses docked when they fail to deliver on their responsibilities ? Dont get inflation down = 5% reduction - unemployment too high = 2% less etc etc. OK G4S did make a mess, but Westminster in 10x worse.

  • 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
    +5

    Comment number 491.

    G4S is the company that our police authorities are being forced to out-source to 'save money' due to police budget costs. Now we have political PCCs on the horizon too? Makes you wonder about public security/safety.

    All I see is a continuance of privatised shambles of basic essential services that is already affecting the NHS that we pay taxes for, but will be diverted to shareholders.

  • rate this
    +7

    Comment number 490.

    I do wish people would stop quoting the stupid catchphrase of a certain meerkat-themed advert when responding to HYS debates.

    Makes me cringe...

  • rate this
    +2

    Comment number 489.

    I'm waiting for the pro-Capitalist Private Sector 'libertarian' free-market lovers to say something like,

    'Well, surely the Government awarded the contract so it's not strictly the private sector that is to blame.'

    There you go...done it for you.

    Simples

  • rate this
    +2

    Comment number 488.

    Let this be a warning to everyone regarding cutting civil service jobs .
    when you start allowing private companies whose only concern is to make as much money as they can , chaos and bad service all ways follows . i went to the olympics and was so proud to see the force`s
    protecting the olympic village .

  • rate this
    +4

    Comment number 487.

    @ 18.RobJ - what an irritating comment, deliberately so I would guess, your inference that all civil servants are irresponsible and impractical is of course nonsense. Presumably your company is one of the increasing number well practiced in telling its customers that their disappointment is all their own fault and that they won't be getting any money back etc.

  • rate this
    +2

    Comment number 486.

    473.ukblahblahblacksheep

    "When the truth is packaged as insolence whe know we have a potential politician on our hands", Mr. Buckle and his mates will do just fine out of this, whereas the blokes who earn all this lovely money for G4S will get shortchanged, just like any other ground level employee of a contract security company...

  • rate this
    +4

    Comment number 485.

    blacksheep

    What are you on? Check out the banking sector, brought the western capitalist system to its knees and walked away with salaries and bonuses that insulate them from any losses incurred. If G4S's directors lose out it is only down to their own incompetences, and they can afford to forego the odd million here and there without flinching. By the way Ppuj, the Labour government didn't.

  • rate this
    +1

    Comment number 484.

    Give them the fee in full and NEVER use G4S again. Let any current contracts expire and wave goodbye to bad rubbish!

  • rate this
    +9

    Comment number 483.

    It's really time to bring certain services back into public ownership. Anything driven by profit has no place in such important areas of society.

  • rate this
    0

    Comment number 482.

    Well Paul if only thinngs were that simple and indeed they may be. What did the contract say. It would almost certainly be a large document and probably open to different interpretation. Supplying 75% of contract may not be a breach. You and I would think so but is it. However probably it will come down to some horse trading to keep current & get future contracts.

  • rate this
    +4

    Comment number 481.

    The Labour government, who hired G4S, should be dragged in front of this committee and made to apologise for the huge mess they made by not having clearly defined penalties within the contract with this firm. The Labour party have proved time and time again they have no business acumen whatsoever. They know nothing about procurement and have no idea how to run anything. Utterly useless bunch.

  • rate this
    +20

    Comment number 480.

    G4S chief Nick Buckles became a millionaire by creating exploitative low paid jobs on short term contracts to people who are desperate for work. Show him the exact same consideration he shows his employees and that which he also showed to the Olympics. Tell him to go and whistle for it.

  • rate this
    +3

    Comment number 479.

    So, the 'MP committee' reckon that as they, G4S broke the contractual agreement by not being able to fulfill their obligations, they should forfeit any payment. Coming from a group who have yet to fulfill 'their obligations' perhaps we (Joe Public) should stop all payments, including free perks and expenses, or is it still, those who make the rules can break them with impunity.

  • rate this
    +9

    Comment number 478.

    Is it just me or are the "benefits" to us, the public, of all this privatisation/outsourcing thus (in no particular order):

    Pay more
    Get worse service
    Be expected to cough up even when whoever has failed to deliver
    See above inflation cost increase year, on year, on year......

  • rate this
    +8

    Comment number 477.

    My response to G4S is somewhat harse and simplistic but realistic! Imagine paying your monthly Sky TV bill after only receiveing 50% of the advertised channels, would you happily pay? I think not!
    G4S you provided far less than promised and yet management seem to think its only right you claim £57mil from the taxpayer - come on, get a get grip!

 

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