Humiliated G4S lost £50m in Olympics security shambles

The company was roundly criticised after being unable  to provide all of the 10,400  contracted guards for the prestigious event, forcing the UK government to step in with  military personnel.

However, with the Paralympics due to begin this evening, G4S said it was confident that the Games would be fully staffed with a security workforce.

The firm, which has already ruled itself out of bidding for the Rio 2016 Olympics security contracts, is conducting an internal review after its Games disaster, which saw troops plug a shortfall left by G4S just weeks before the event started.

Chief executive Nick Buckles said: “We were deeply disappointed that we had significant issues with the London 2012 Olympics contract and are very grateful to the military and the police for their support in helping us to deliver a safe and secure Games.

“Clearly, it is a big setback and we need to rebuild the brand over coming months and years.”

The £50m expected loss on the Games contract is at the upper end of what the firm initially expected. G4S said the final amount could be higher because of contract penalties and with the actual cost to the government of providing military personnel yet to be calculated.

The government put another 4,700 personnel on standby, on top of 13,500 initially committed, after G4S admitted its shortfall in July. G4S said not all of these were used as it provided nearly 8,000 staff for the Games.

Mr Buckles said no G4S contracts were lost after the bungled Olympics contract and insisted that the group will continue to play a major role in the public sector, with an overall £3.8 billion-a-year contract pipeline.

But he confirmed that the resources G4S put into resolving the Games debacle meant it withdrew from bidding for  a Department for Work and Pensions contract worth £20m a year.

Mr Buckles is battling to save his career after the contract problems and a high-profile mauling by MPs, which left him agreeing that the Games staffing episode was a “humiliating shambles”.

Reports in recent days suggest he has the support of major shareholders. He said: “I hope I keep my job. I have been with the company for 28 years and during the last ten years as chief executive.”

He is preparing for a second appearance in front of MPs over the Olympics contract next month, while the results of the internal review are due towards the end of September.

G4S – the largest employer on the London Stock Exchange with around 650,000 staff worldwide – also announced it has cut 1,100 jobs in a restructuring programme that started in December last year.

Most of the cuts have been made across continental Europe and developing markets, with fewer than 100 roles axed in  the UK.

Experts remain cautious about the group’s outlook.

Caroline de La Soujeole, an analyst at Seymour Pierce, said: “Restoring its reputation with the UK government is crucial to G4S. Some 10 per cent of group sales are generated from the UK’s public sector and just  under half (45 per cent) of the UK’s bidding pipeline is for  government work.”