Nick Buckles, chief executive of the world’s second largest private sector employer, said he was sorry and “deeply disappointed” after the firm failed to deliver on its £284m Olympics security contract. But as he appeared before MPs for questioning yesterday, he repeatedly insisted the firm still intended to keep its £57m 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 Commons Home Affairs Select Committee, said it was “astonishing” and called on G4S to waive the fee and any others associated with the contract.
Mr Buckles is under pressure 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 and seen £700m wiped off the market value of G4S.
He admitted he could not deny the debacle was a “humiliating shambles for the company” and the firm’s reputation was now in tatters.
Tory MP Nicola Blackwood said Mr Buckles’s performance before the MPs “would lead quite a lot of people to despair”.
He added: “I had very little confidence in G4S fulfilling this contract before this session started and now I don’t have any confidence at all.”
Tory MP Michael Ellis added that the public was “sick of huge corporations like yours thinking they can get away with everything.”
Mr Buckles promised the firm would pay all police and military costs caused by G4S’s failure.
The company would cover any accommodation expenses and would even consider paying bonuses to individual officers and officers and troops if considered appropriate.
Mr Buckles said he told Olympics organiser Locog on July 3 his firm had experienced a shortfall in staff over the previous weekend, in part due to its scheduling system not working properly.
It was monitored daily at meetings with Locog and the Home Office but it was not until an Olympics Security Board meeting, chaired by Charles Farr, director general of the Office for Security and Counter-Terrorism, on July 11, the firm said it was not going to meet its contract obligations.
Asked for the reasons behind the eight-day delay, he said: “We were very transparent about the issues we were experiencing, but it was very difficult right through that process on a daily basis to see – we were still confident early on that we were going to produce the numbers.
“But the more and more we dug into the data, looked at the process, looked at the scheduling, day by day we started to realise that the pipeline and the people we thought we would be able to deliver – we couldn’t.”
The shortfall only became clear at the meeting on July 11.
Mr Buckles refused to comment on whether Mr Farr should have referred the problems to Ministers on July 3.
G4S took on the Olympics contract to boost its reputation, not its profits, Mr Buckles said. “Financially, it’s not a huge issue for us in improving our profit.”
But he insisted the £50m loss the firm now faces was not insignificant, saying it was a “huge amount”, representing 10 per cent of the company’s annual £500m profit.
Mr Buckles denied the firm had failed to give the contract sufficient priority, insisting it was “hugely important.”
The problem was that G4S did not have enough staff, rather than that its staff were simply not turning up, he said.
And he conceded he could not even guarantee how many security guards would turn up on the first day of the Olympics, but told MPs it was his “expectation” that 7,000 G4S staff would turn up.
He admitted “in a perfect world” the staff would have been in place well ahead of the Games, but that was not what the contract stated.
“We’re still confident, together with the military and the police, that we can deliver a safe and secure Olympics,” he said.
According to Mr Buckles, G4S has £600m of private sector contracts with the Home Office.
“We’ve had a strong track record in delivering contracts,” he said.
He also revealed G4S decided last week not to compete for the contract to run security at the 2014 World Cup and the 2016 Olympics in Rio, Brazil.
Meanwhile, Culture Secretary Jeremy Hunt said the idea that failings in Olympic security were ultimately his responsibility was “ridiculous.”
While the debacle was “humiliating” for G4S, he said that the Government had always had contingency plans in place.