G4S chief stuns MPs with £57m contract claim


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The Independent Online

The embattled chief executive of the security giant G4S provoked anger and surprise yesterday by insisting his company would still claim its £57m "management fee" despite its failure to recruit thousands of guards to protect the London Olympics.

To the astonishment of MPs, Nick Buckles admitted he still could not be certain how many recruits would turn up when the Games start. He insisted the company took complete responsibility for the fiasco, which has resulted in thousands of troops and police officers stepping in at the last minute to guard Olympics events and venues.

In a bruising encounter with the Commons Home Affairs Select Committee, he agreed the episode had been a "humiliating shambles" for G4S which would leave it £50m out of pocket from the £284m contract it signed to boost its international prestige.

Mr Buckles promised it would pick up the costs of deployment by the Army and the police – and to consider bonuses for troops and police officers brought in at short notice.

But he repeatedly said G4S would not waive its £57m management fee, despite its failure to supply a third of the 10,400 guards it promised. He said: "We have managed the contract and had management on the ground for two years… we still expect to deliver a significant number of staff."

Keith Vaz, the committee's chairman, described its stance as "astonishing" in the light of the "appalling management" displayed by the company. Mr Buckles has admitted he is considering his future over the debacle, but told the committee he was still in his job because his priority was to deliver the contract. He said he only discovered on 3 July that G4S was struggling to deliver its promised guards and flew back that day from holiday in the United States to hold emergency talks on the situation.

It emerged yesterday that concerns over the contract had been discussed from April in weekly meetings attended by G4S, Games organisers Locog and Home Office managers.

Ms May and Charles Farr, the senior civil servant in charge of the Olympics' anti-terror strategy, will be challenged by the committee in September over whether they should have been aware of the crisis earlier.

G4S's shares tumbled 6 per cent yesterday. Its market value has fallen £700m since the problems emerged.