News In Depth
- 17 July 2012, 10:00
'Humiliated' G4S to claim millions
G4S bosses have insisted they will be claiming tens of millions of pounds in management fees despite being 100% responsible for a "humiliating shambles".
Nick Buckles, chief executive of the world's second largest private sector employer, admitted he was sorry and "deeply disappointed" after the firm failed to deliver on its £284 million Olympics security contract.
But he repeatedly insisted the firm still intended to claim its £57 million management fee for work over the last two years, even though it cannot provide the guards needed for the Games.
Keith Vaz, chairman of the Commons Home Affairs Select Committee, said it was "astonishing" and called on G4S to waive the fee and any others associated with the contract.
Mr Buckles is under pressure to quit his £830,000-a-year job over the fiasco, which has resulted in the emergency deployment of soldiers, marines, airmen and police officers and seen £400 million wiped off the market value of G4S.
He admitted he could not deny that the debacle was a "humiliating shambles for the company" and the firm's reputation was now in tatters.
Tory MP Nicola Blackwood said Mr Buckles's performance before the MPs "would lead quite a lot of people to despair".
"I had very little confidence in G4S fulfilling this contract before this session started and now I don't have any confidence at all."
Labour MP Bridget Phillipson told Mr Buckles she was left with the feeling that he was "making it up as you go along".
Tory MP Michael Ellis added that the public was "sick of huge corporations like yours thinking they can get away with everything".
Mr Buckles promised the firm would pay all police and military costs caused by G4S's failure, would cover any accommodation expenses and would even consider paying bonuses to individual officers and troops if considered appropriate.
But asked by Mr Vaz why the firm still wanted to claim its management fee, Mr Buckles said: "We've managed the contract and we've had management on the ground for two years.
"We still expect to deliver a significant number of staff."
Mr Buckles said he told organisers Locog on July 3 that his firm experienced a shortfall in staff over the previous weekend, in part due to its scheduling system not working properly.
It was monitored daily at meetings with Locog and the Home Office but it was not until an Olympics Security Board meeting, chaired by Charles Farr, director general of the Office for Security and Counter-Terrorism, on July 11, that the firm said it was not going to meet its contract obligations.
Asked for the reasons behind the eight-day delay, he said: "On the 3rd of July we informed Locog and we then set up a daily working party with Locog and the Home Office to work through the issues we were experiencing.
"We were very transparent about the issues we were experiencing, but it was very difficult right through that process on a daily basis to see - we were still confident early on that we were going to produce the numbers.
"But the more and more we dug into the data, looked at the process, looked at the scheduling, day by day we started to realise that the pipeline and the people we thought we would be able to deliver - we couldn't.
"It was a daily evaluation of what was coming through in terms of what we could and couldn't deliver and we were sharing that quite openly."
The shortfall only became clear at the meeting on July 11, he added.
Mr Buckles refused to comment on whether Mr Farr should have referred the problems to ministers on July 3.
what do you think?
Peter Coates
I thought when you messed up you hadto pay. Seems like there must be some mp's shareholders in this firm.
Red John
or merchant bankers, of course.
Brian Holmes
Mr. Buckles does not appear to realise his company were being paid to deliver success not failure. He seems to think he is a banker.
David Francis
Sounds about right
stephen
well said
Ann Bond
Mr Buckles screw up Mr Buckles loss He shouldnt have put a bid in for the job if they couldnt deliver what was required. They should be made to pay all the costs for the forces and the arrangements etc. that need to be taken into account as well as repaying the full amount to cover the inconvience the inability to do the job he was hired to do. NO BONUS NO CLAIMS NO EXCUSES NO CONMEN TO RIP US OF ANY MORE HE WAS INCAPABLE TO DO THE JOB give him the sack
stephen
and people want the world cup football to come here .haaaaaaa
Mike Anon
I wonder how much per hour G4S are paying their Olympics security officers? It's sure to be a measly amount for so many who have passed the training not to turn up for duty.
Anthony Smith
I think it's highly likely that many of them are actually on the Work Programme (as G4S is one of the main 'providers') so those 'trained officers' will not be paid anything at all by G4S but will continue to receive benefits as long as they do what they're told.
Arthur Hancock
You go for the cheapest option and quote, then you pay peanuts and you get Monkeys. What else did they expect with letting private enterprise take over the security? This should have been a Government job from the start, but no; the back-handers were too attractive. Maybe a few Ministerial Bank Accounts should be scrutinised over this shambles.
Roger Siviter
Got it in one!
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bobh_385
I just feel for the genuine athletes who have been training hard,unlike g4s people, and are looking forward to representing their countries, to have what should be a celebration of athleticism, overshadowed by things like this. Unfortunately its degenerated into a "jolly" for the worlds con-men (oops I mean politicians) paid for by their taxpayers
Brian Holmes
It's maybe a blessing in disguise because they were going to give every useless Tom, D-ick and Harry a security job just to try to get the numbers up.
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Roger Siviter
This is the predictable outcome when any country goes down the American path of so called free enterprise. The state has a duty to contol and employ directly all aspects of national security such as police, armed forces, prisons etc. When they go down the privatisation route it is fraught with never ending backhander money deals, corruption and a total lack of patriotism ie; 'Whats in it for me' and then you end up with situations like not even knowing who/what is controlling/operating whatever. NHS is next on the list, heaven help you when the first thing the ambulance driver asks you " Insurance certificate od Visa Madam/Sir?
David Wragg
How can he expect a management fee when management has been completely absent? Anyone with any sense would have looked for recently retired police officers and members of the armed forces, but G4S goes after people with no experience - and one newspaper report is that a senior police officer became alarmed when one of the security people who turned up couldn't speak a word of English! G4S should not be paid a management fee, and should compensate the taxpayer for the use of the police and armed forces, and compensate the service personnel for lost holidays, etc.
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Jim Mills
What an insult to the British public's intelligence. Managers? They couldn't manage to find their own rectums with both hands, a guide dog and a heat seeking missile. Wonder if anyone in government will have the guts to prosecute G4S when security is breached and people are hurt because you can guarantee it will happen. This security setup is a terrorist's dream come true
katie
Funny how you at orange stop people from commenting on certain news storys or if things get a bit to close to the truth about how people are feeling you soon remove the story hmmmmmm
Ray Gardner
I asked these people a year ago for an application form as I wanted to apply for a job, having worked in Security for 14 years, I thought they would jump at the chance, I didn't even get the courtesy of a reply. How can they expect to get the staff they need if they do not reply to requests for an application form
B. Wise
10:32am on 17/7/2012
When we were first awarded the Olympics it was obvious that the clowns jumping up and down to celebrate had`nt a clue what they were letting our security services in for.They should have realised that due to our Government at the time sticking its nose in other countries troubles they would retaliate in someway or other. The London bombings should also have given them some indication that our country is riddled with potential terrorists.