G4S Security Firm Increased Olympic Management Contract By £50m Before Staffing Shambles
Posted by Ram Kumar Shrestha on July 14, 2012
The firm at the centre of the Olympic security row saw its contract to manage civilian staff increase by more than £50m over the past two years, it was reported on Friday.
With just two weeks to go until the opening ceremony, the Government has been forced to draft in an extra 3,500 military personnel to protect London 2012 venues after private company G4S admitted it might not be able to provide enough guards.
Former Army chief General Lord Dannatt issued a plea for spectators at the Games to show their appreciation to the troops, some of whom have recently served in Afghanistan and are facing possible job losses as the forces are cut back.
Lord Dannatt told BBC2’s Newsnight: “When you see those soldiers checking your bag, checking your ticket, remember they would have been on leave and just say thank you to them.”
On Friday, confidential papers obtained by the Daily Telegraph indicated that the fee charged by G4S for “programme management” rose dramatically as the number of staff required grew.
The security firm have fallen short on their obligations for security staff
G4S was initially contracted by Games organiser Locog in 2010 to provide 2,000 security staff for £86 million, but that figure has since risen to 10,400 personnel in a contract now worth £284m. The Daily Mail reported that the people employed will include A-level students.
The documents seen by the Telegraph suggested that the firm’s management fee rose over that time from £7.3m to £60m. Almost £34m of the increase was for the G4S “programme management office” overseeing the security operation, compared to an increase of just £2.8m in the firm’s recruitment spending.
There was no immediate response from G4S last night to a request for comment on the figures.
With more than £100m wiped off the firm’s market value and accusations that the company has let the country down, Home Secretary Theresa May told MPs that ministers were only told on Wednesday that G4S was having difficulties delivering the numbers of staff required.
But Mrs May denied it was a “shambles” and insisted there was “no question of Olympic security being compromised”.
3,500 extra military staff will step into the breach to cover for G4S’ shortfall
Asked whether there would be any financial penalties for G4S on its £284m contract, Mrs May said the firm’s deal was with Locog, but she understood that penalty clauses were included.
A total of 17,000 servicemen and women will now be involved in the Olympics, including 11,800 soldiers, 2,600 sailors and marines, and 2,600 airmen.
Some 11,000 of these will be involved in the security of more than 30 sporting venues and some 70 non-competition venues, including car parks and hotels, while others will carry out specialist support roles including air security, search teams, communications and logistics.
Overall, a 23,700-strong security force for the Games will include a mix of military, private security guards and at least 3,000 unpaid London 2012 volunteers.
Defence Secretary Philip Hammond acknowledged the extra burden on military families, but said bringing in extra resources was “prudent” and insisted the deployment “will have no adverse impact on other operations”.
The firm were supposed to recruit a large portion of the security staff to cover venues such as the Olympic stadium
Keith Vaz, the Labour chairman of the Commons Home Affairs Select Committee, said: “G4S has let the country down and we have literally had to send in the troops.”
He summoned G4S chief executive Nick Buckles and its chairman Alf Duch-Pedersen to appear before the committee next Tuesday to explain the problems.
Shadow home secretary Yvette Cooper said the situation looked like “another Home Office shambles”, with G4S falling 25% short of its contract.
G4S, the largest employer on the London Stock Exchange with more than 650,000 staff worldwide, admitted it was experiencing “some issues in relation to workforce supply and scheduling” and had accepted that the Government was turning to the military for extra help.
A spokeswoman added: “This has been an unprecedented and very complex security recruitment, training and deployment exercise which has been carried out to a tight timescale.”
Its workforce will conduct physical searches, operate X-ray machines and carry out perimeter searches at the Games.
Responding to the Telegraph report, a London 2012 spokesman said: “To imply the figure of £60m is essentially margin would be wrong.
“A substantial amount of that figure would include direct new costs which would be incurred in delivering the significantly larger contract taken on last year.”
Policing and criminal justice minister Nick Herbert defended the Government’s security arrangements.
He told BBC Radio 4’s Today programme: “We took action as soon as the problem became clear. I’m not sure what those who are suggesting that there might have been another course of action are really saying.
“Are they really saying that thousands of police officers should have been taken off the streets?
“The key point from the point of view of the public is there will be a safe Olympics and people will be checked going into the Olympics. That’s what matters.”