Conclusions and recommendations
EARLY WARNINGS
1. Reports
commissioned by LOCOG in the months preceding the Games indicated
clearly that there were problems with G4S's recruitment, training
and communications. They also found that the management information
presented to LOCOG by G4S were fundamentally unreliable. G4S,
meanwhile, continued to insist that it was in a position to deliver
its contract. Although Mr Buckles claims to have acted on all
the relevant recommendations, the final outcome suggests that
the changes to the data G4S were reporting to LOCOG were more
presentational than substantial. The data were at best unreliable,
if not downright misleading, and the most senior personnel in
the company must take full responsibility for this. (Paragraph
13)
2. It is surprising
that the four reports on the Olympic security plan were not shared
more widely among Olympic Security Board members, and it may well
be that, had this been done, the potential scale of the problems
might have been realised sooner. We recommend that the presumption
should be, when planning for major events, that any reports commissioned
from external bodies be shared with all stakeholders. (Paragraph
14)
THE PROBLEMS BECOMES APPARENT
3. It
seems that the penny finally dropped with G4S management on 3
July, when Mr Taylor-Smith telephoned Mr Buckles to inform him
there would be a shortfall of staff. Mr Buckles was on holiday
at the time, which suggests that this was something more than
a routine call. But Mr Buckles did not mention the scale of the
problem to the Home Secretary when he spoke to her on 6 July,
the same day on which Mr Horseman-Sewell was boasting recklessly
in the press that G4S would have been more than capable of simultaneously
delivering multiple Olympic security projects around the world.
Neither did Mr Buckles disclose the scale of the problem when
he met the Home Secretary on 10 July. It is clear that by this
stage the Home Office had realised that something might be seriously
amiss, as Charles Farr had already begun to put contingency plans
into place. But it is astonishing that G4S took a further week
to tell its partners how bad things were. (Paragraph 20)
THE CONTINGENCY PLAN
4. The
contingency plan was by common consent a huge success. We commend
the contribution that the armed forces made to the Games. Their
ultimate success in delivering a safe and secure Games suggest
that, in the planning of future major events, the military might
more appropriately be considered as a first choice for venue security,
rather than a back-up, with appropriate recognition and reward
for the personnel concerned. We also commend the police on the
additional contribution which they made to support Games security
and make good the failings of G4S. (Paragraph 23)
G4S'S TREATMENT OF APPLICANTS AND STAFF
5. G4S's
poor communications with its staff and prospective staff was no
doubt a contributory factor to the overall failure of the company's
Olympic contract. It has also had an impact on those prospective
employees who went through the selection, training and screening
process in good faith, only to be left without work at the end
of it because of G4S's poor management. In our view , it is clear
that G4S is under a moral obligation to immediately make generous
ex gratia payments by way of apology to those applicants who were
left out of pocket because they were not offered work despite
successfully completing the training and accreditation process.
We are clear that this was not a fault of either the Home Office
or LOCOG but many people undertook training and made themselves
available not just because work was being offered, but because
they believed that they would be helping in a national initiative,
and the Government should therefore satisfy themselves that G4S
does generously and efficiently meet this moral obligation. (Paragraph
26)
REDRESS
6. We
recommend that LOCOG and G4S quickly seek to reach a common position
on exactly how far short G4S fell from its contractual requirements.
(Paragraph 29)
7. The blame for G4S's
failure to deliver on its contract rests firmly and solely with
the company. There is no suggestion that LOCOG, the Home Office
or anybody else involved in the process contributed to the problem
in any way. All our witnesses, including those from G4S, were
in agreement on this point. It is understandable that G4S, having
taken a £50 million loss on the Games, alongside a significant
fall in its share price, should now seek to minimise the scale
of any further losses. But we believe that the company should
look to the bigger picture, and its long-standing relationship
with its biggest client in the UK: the taxpayer. By waiving the
£57million management fee in its entirety, a small fraction
of the £759 million that it receives from the British taxpayer
every year, G4S would send a strong signal to the public that
it is serious about offering fair and reasonable redress when
things go badly wrong. By doing so, the company would accept,
and be seen to accept, responsibility for its failings in respect
of this extraordinary and uniquely high-profile contract, and
therefore draw a line between that failure and the continued fulfilment
by this important UK company of other contacts, both in the UK
and internationally. (Paragraph 33)
8. It is clearly a
matter for LOCOG to examine the legal position and to protect
the public interest as robustly as possible, but Parliament and
the general public would regard it as absurd for the company to
be claiming a management fee which was clearly negotiated on the
basis of the delivery of services which were not delivered. We
were shocked by Mr Buckles' apparent reluctance to grasp this
point. (Paragraph 34)
9. Mr Buckles confirmed
to us that G4S would not be bidding for the Rio Olympics in 2016.
We believe this is the right decision, given that their chances
of winning the bid on the strength of their performance at London
2012 would be slim, at best. (Paragraph 35)
LESSONS FOR THE FUTURE
10. We
look forward to receiving a copy of the PwC Report on G4S's performance
on its Olympic contract. A detailed, internal review is clearly
necessary if the right lessons are to be learned from this experience,
but it is no substitute for Parliamentary scrutiny. (Paragraph
37)
11. Few would have
expected a company the size of G4S to fail in delivering such
as high-profile contract. But it did fail. By contrast, LOCOG
was able to recruit and deploy 70,000 volunteers, nearly seven
times the number of people that G4S was asked to provide, working
to the same timescale and under similar constraints. In letting
major contracts, a company's past performance is clearly an important
factor, but government departments, police forces and other public
bodies must not place too much weight on a company's size and
reputation alone. We also wish to see evidence that the company's
recruitment, training, personnel management and cash recovery
systems have been reviewed in the light of the experience of so
many of those recruited for employment during the Olympics who
were severely let down by G4S. We expect this to be fully covered
in the PwC report or in a separate independent report commissioned
by G4S. Cost effectiveness and savings in the delivery of public
services should not be at the cost of exploitation and neglect
of management responsibilities to staff and potential employees.
The Government should satisfy itself as to the quality of these
aspects of G4S's practices in respect of the delivery of other
services, given that these failings only came to light as a result
of the high public profile failure of the G4S Olympic contract.
(Paragraph 38)
12. When he was asked
whether staff were paid for training, Mr Buckles said 'They will
be if they come to work' but a significant complaint set out in
evidence to the Committee and widely reflected in the press and
media was that people were not paid for training if they were
ready and willing to work but were not offered a time and place
to report for work. Others were expected to pay for their own
uniforms unless they worked a number of shifts. We can understand
a company wishing to recover costs if an individual benefits from
training but then fails to turn up for work without good reason,
but when the lack of shifts work is entirely due to the company's
failure to provide employment, this is an entirely different matter.
We expect the company to make public a means by which people
can be recompense in such circumstances and to be quick and generous
in settling such claims. (Paragraph 39)
13. The Government
should not be in the business of rewarding failure with taxpayers'
money. As private sector providers play an increasingly important
role in the delivery of police and criminal justice services,
it is vital that those commissioning services look at the track-records
of prospective providers. We recommend that the Government establish
a register of high-risk providers, who have a track-record of
failure in the delivery of public services. This would provide
a single source of information for those conducting procurement
exercises about companies which are failing or have failed in
the delivery of public contracts. (Paragraph 40)
| 
