G4S Olympics scandal: Humiliated and humbled... but Nick Buckles still taking his £57m fee
THE beleaguered chief executive of G4S has admitted his company’s failure to provide the 10,000 promised security staff for the Olympics has been a “humiliating shambles”.
Nick Buckles said his company, the world’s second largest private security employer, would reimburse police forces, including Strathclyde, that are having to plug the gap by providing officers for security work during the Games.
Asked by Labour MP David Winnick if it was a “humiliating shambles for the company”, Mr Buckles said: “I could not disagree with you.”
But addressing MPs on the home affairs select committee, Mr Buckles repeatedly insisted the firm still intended to claim its £57 million management fee for work over the past two years, even though it cannot provide the guards needed for the Games.
Keith Vaz, chairman of the committee, called the claim “astonishing” and urged G4S to waive the fee and any others
associated with the contract.
Mr Buckles came under growing pressure yesterday 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.
By the end of yesterday, G4S shares had fallen 17 per cent since the crisis emerged last Wednesday, wiping £700m from its market value.
Mr Buckles said he could not deny that the debacle was a “humiliating shambles for the company” and the firm’s reputation was now in tatters. He said he was sorry and “deeply disappointed” that G4S had failed to deliver its contract.
He admitted that even now he could not guarantee how many staff would turn up for work on the first day of the Olympics, although he thought it would be about 7,000.
Strathclyde Police had already said it would apply for compensation from the Home Office, when G4S’s failure to provide enough staff to cover Olympic football at Hampden was
revealed in Scotland on Sunday.
“Strathclyde Police will be submitting a bill for that extra policing activity down to the Home Office, because clearly we don’t think it’s right that the taxpayer in Strathclyde, or indeed Scotland more nationally, should foot the bill for another agency’s inability to deliver a service,” said Assistant Chief Constable Fiona Taylor.
The force is having daily discussions with the security firm to see how many people it will be able to provide, and how many officers will be needed to meet the shortfall, but has declined to go into details.
G4S won a £284m contract for Games security, but last week Home Secretary Theresa May admitted 3,500 members of the armed forces would be drafted in to make up the numbers.
Yesterday, Mr Buckles, who sat next to G4S’s global events specialist Ian Horseman-Sewell, faced tough questioning as MPs demanded answers to know how the problems arose and why they were not addressed sooner.
Asked if he believed that the reputation of G4S was in tatters, Mr Buckles added: “At the moment, I would have to agree with you.”
He insisted the firm has had a good reputation “over the years”, but said: “At the moment, it’s not a good position to be in.”
He insisted he did not know about the shortfall until 3 July, and it was a “complete and utter shock” when he was told while on holiday in the US.
He alerted London 2012 organisers, Locog, and returned home to the UK the same day, he said.
MPs also heard that the company had waited before starting to recruit because it was “neither practical nor cost-effective” to have guards in place months in advance.
However an internal memo from Mark Hamilton, the firm’s managing director of the Olympics contract, had raised issues over this “just-in-time contract phrasing” in June.
There have also been concerns raised about G4S staff failing to show up, with police again having to make up the numbers.
“Our normal show rate is about 90 per cent,” Mr Buckles said.
The firm will reimburse police for all costs incurred by G4S’s failures, Mr Buckles said. He also said he would be willing to consider paying bonuses to police officers and members of the military.
MPs took it in turns to launch withering attacks on Mr Buckles.
Tory MP Michael Ellis told him the public was “sick of huge corporations like yours thinking they can get away with everything”.
Labour MP Bridget Phillipson told Mr Buckles she was left with the feeling that he was “making it up as you go along”.
And Tory MP Nicola Blackwood added that 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,” she said.
Asked by Mr Vaz why the firm wanted to claim its £57m management fee at all, 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 Vaz said: “I find that astonishing.”
G4S has £600m of private sector contracts with the Home Office, Mr Buckles said. “We’ve had a strong track record in delivering contracts,” he said. “This has been a major challenge to us.”
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Saturday 25 May 2013
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