Olympics security - Home Affairs Committee Contents



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)




 
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© Parliamentary copyright 2012
Prepared 21 September 2012