Leading article: A timely warning about dogma and outsourcing

It is not G4S's embarrassed management that deserves sympathy, but the police and the Army

Share
Related Topics

G4S did not take on the Olympics security contract for the money, the firm's chief executive, Nick Buckles, told MPs yesterday. It did it for the sake of its reputation. And it has certainly boosted its name recognition. For many years hence, people in the UK, and not necessarily just here, will remember G4S as the firm that made a dog's dinner out of guarding the 2012 Games.

Even after it has received £57m as a management fee, the firm reckons that it now stands to lose £50m on the contract. As the world's third largest private employer, it can afford the loss. What it cannot afford is the loss of market confidence that has seen its share price fall by 15 per cent.

Although it is a reputational disaster for the firm – and may yet be a disaster for Mr Buckles personally, after his performance before the Commons Home Affairs Select Committee yesterday – it is not G4S's embarrassed management that deserves our sympathy.

Consider what this fiasco means for the members of the armed forces, who learnt this week that thousands of army jobs are to go in the next few years, men returning from duty in Afghanistan who are now being told they must stand in where a private company has failed to fulfil a contract. The people who appear to be angriest of all are the chief constables. They, too, face the loss of thousands of staff, yet they are being asked to provide cover for a firm being handsomely paid to do a job that the police will usually do for far less.

For purposes of comparison, the nation's highest-paid policeman, the Metropolitan Police Commissioner, was paid £260,088 in 2011. The Chief of Defence Staff was paid £240,000. Mr Buckles's pay was recorded in the company's accounts as £830,000, but that does not include bonuses and extras which will have taken his total packet to around £1.2m. He is paid four times as much as the heads of the armed forces and police who must now dig his company out of this mess.

The one thing that can be said in G4S's defence is that it was originally contracted to provide 6,500 security staff, a figure that was revised upwards at the end of last year to an alarming total of 23,000. That was a massive task, but the company undertook to do it and, according to the Home Secretary, Theresa May, gave no warning until 11 July that it was in difficulty. Mr Buckles told MPs that he did not know until 3 July. As recently as 6 July, G4S's account manager for the Games, Ian Horseman-Sewell, told Reuters that the firm would be able to handle an event in Australia at the same time as guarding the Olympics.

Labour politicians naturally ask whether ministers should have been keeping closer tabs on the company. But, at least until other evidence comes to light, the Home Secretary's account seems reasonable. She trusted G4S to deliver and was not given any reason not to.

A bigger political question is about outsourcing, under which private companies are hired to perform tasks previously undertaken by the State in the belief that they will do a better job. There certainly are circumstances in which private firms subject to market discipline outperform agencies of the State – but this has not been one of them. It provides a salutary warning to those who hold an ideological conviction that private is necessarily good, and public necessarily bad.

Finally, there is the question of G4S's £57m fee. "Even after all that has happened, you still want to claim the management fee? I find that astonishing," the Home Affairs Committee chairman, Keith Vaz, exclaimed yesterday. Mr Buckles responded that he did. Perhaps he should think about that a little more as the company nurses its shattered reputation.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Recruitment Genius: Office Administrator

£14000 - £18000 per annum: Recruitment Genius: An Office Administrator is requ...

Recruitment Genius: Sales Executive - Commercial Vehicles - OTE £40,000

£12000 - £40000 per annum: Recruitment Genius: Due to expansion and growth of ...

Ashdown Group: Senior PHP Developer - Sheffield - £50,000

£40000 - £50000 per annum: Ashdown Group: Senior PHP Developer position with a...

Recruitment Genius: Operations Leader - Plasma Processing

Negotiable: Recruitment Genius: An Operations Leader is required to join a lea...

Day In a Page

Read Next
 

i Editor's Letter: Most powerful woman in British politics

Oliver Duff Oliver Duff
All the major parties are under pressure from sceptical voters to spell out their tax and spending plans  

Yet again, the economy is the battleground on which the election will be fought

Patrick Diamond
Revealed: Why Mohammed Emwazi chose the 'safe option' of fighting for Isis, rather than following his friends to al-Shabaab in Somalia

Why Mohammed Emwazi chose Isis

His friends were betrayed and killed by al-Shabaab
'The solution can never be to impassively watch on while desperate people drown'
An open letter to David Cameron: Building fortress Europe has had deadly results

Open letter to David Cameron

Building the walls of fortress Europe has had deadly results
Tory candidates' tweets not as 'spontaneous' as they seem - you don't say!

You don't say!

Tory candidates' election tweets not as 'spontaneous' as they appear
Mubi: Netflix for people who want to stop just watching trash

So what is Mubi?

Netflix for people who want to stop just watching trash all the time
The impossible job: how to follow Kevin Spacey?

The hardest job in theatre?

How to follow Kevin Spacey
Armenian genocide: To continue to deny the truth of this mass human cruelty is close to a criminal lie

Armenian genocide and the 'good Turks'

To continue to deny the truth of this mass human cruelty is close to a criminal lie
Lou Reed: The truth about the singer's upbringing beyond the biographers' and memoirists' myths

'Lou needed care, but what he got was ECT'

The truth about the singer's upbringing beyond
Migrant boat disaster: This human tragedy has been brewing for four years and EU states can't say they were not warned

This human tragedy has been brewing for years

EU states can't say they were not warned
Women's sportswear: From tackling a marathon to a jog in the park, the right kit can help

Women's sportswear

From tackling a marathon to a jog in the park, the right kit can help
Hillary Clinton's outfits will be as important as her policies in her presidential bid

Clinton's clothes

Like it or not, her outfits will be as important as her policies
NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders