G4S 'underestimated' Olympics task
Saturday 14 July 2012
Security giant G4S today admitted it had underestimated the task of supplying 10,000 guards for the London Olympics.
Chief executive Nick Buckles confirmed the firm was facing a loss of up to £50 million for failing to meet its contractual obligations and admitted he did not know "categorically" whether all the security staff could speak fluent English.
Speaking publicly for the first time since details of the fiasco emerged, he said he was "very sorry" 3,500 troops had to be drafted in at the last minute to make up the shortfall.
"We accept that we underestimated the task of supplying staff for the Olympics. We deeply regret that," he told the BBC Radio 4 Today programme.
G4S was initially contracted to provide 2,000 staff for £86 million but, following a review of security requirements last year, that was increased to 10,400 personnel while the value of the contract more than trebled.
However on Wednesday, with just over two weeks to go until the opening ceremony, it emerged the firm was not going to make the numbers and additional troops would be required.
Despite having signed the initial contract in 2010, Mr Buckles said that he had only realised "eight or nine days ago" that there would be a shortfall.
"We are recruiting a large number of people, they are all working through a process of interview, two or three different degrees of training, licensing, accreditation," he said.
"Our review process was around the number of people applying for interviews, we had 100,000 of those, the number of people interviewed which was 50,000.
"So basically you work through that process of numbers and as they were getting ready for deployment over a period of time, it's only when you get closer and closer to the Games that you realise that the number isn't as high as you expect."
Pressed during interviews, Mr Buckles was unable to say whether all the staff they had recruited could speak fluent English, saying it was a "difficult question to answer".
"I am pretty sure that they can, but I can't say categorically as I sit here today," he said.
He disclosed that G4S now faced a penalty charge "in the range" of £10 to £20 million for failing to honour the terms of its £284 million contract with Locog.
However he said that the bulk of the losses would come from having to pay the Ministry of Defence for the costs of providing the additional troops.
He apologised directly to the troops involved - some of whom have been forced to cancel leave and holidays after arduous operational tours in Afghanistan.
"Thanks very much for supporting us," he said on BBC1's Breakfast. "We're very sorry that you've had to get involved at this late stage but we're very grateful."
Mr Buckles, who now faces a grilling on Tuesday by the Commons Home Affairs Committee, insisted the company had kept both the Government and Locog fully informed about what was going on.
"We have been sharing the information with our customers - Locog and ministers - for days now," he said.
"We had shown them the data which said that these are the people that we have got in training, being accredited, etc throughout the process.
"We have all got the same information, they had the same information. We were fully transparent throughout that process. They knew that the process of training and recruiting and vetting had to be compressed over the last seven or eight weeks."
According to reports, the firm's management fee rose from £7.3 million to £60 million following the contract review last December.
Almost £34 million of the increase was said to be for the G4S "programme management office", compared to an increase of just £2.8 million in the firm's recruitment spending.
However Mr Buckles denied that the difficulties they experienced were as a result of trying to keep recruitment costs to a minimum.
"The whole process of recruitment and training was well-resourced by the company and well-funded," he said.
Shadow Olympics minister Tessa Jowell said that while there were "hundreds of questions" to be asked about what had gone wrong, the post-mortems should wait until after the Games were over.
"With less than two weeks to go, the focus now has got to be on nailing this down and ensuring the integrity and resilience of the security plan," she told BBC1's Breakfast.
"I think the questions and scrutiny of how we got to this position come after."
The chairman of the Home Affairs Committee, Keith Vaz, said the problems that had arisen raised questions as to whether the staff G4S had managed to recruit were up to the job.
"We do need to examine what is the workforce that is in place at the moment. Have they been properly trained? Are they going to be able to communicate with those that arrive at the Games and are they qualified to do what they are supposed to do?" he told BBC News
"I hope this is an opportunity for Mr Buckles on Tuesday to come out with the facts, to be very clear, to be very open, to be very transparent with Parliament so that we can get to the bottom of what has happened."
He said the difficulties could have implications for the firm's long-term relationship with the public sector.
"This is not a dodgy builders' firm. This is the biggest security firm in the world. They have hundreds of millions of pounds of contracts to deal with policing, prisons, detention centres, which the Home Office has given them. The worry for me is the long term," he said.
But Mr Vaz stopped short of calling for Mr Buckles to resign. Asked if he should consider his position in light of the fiasco, Mr Vaz said: "I think we need to wait and see what he says on Tuesday."
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