Chase up firms that don’t deliver on their contracts says Cameron

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Firms that fail to deliver on their contracts should be pursued for the money, the Prime Minister said following the Olympic security row.

Ministers were forced to draft in an extra 3,500 military personnel to protect London 2012 venues after private company G4S admitted it might not be able to provide enough guards.

David Cameron’s comments came as an MP accused G4S of “compounding a felony” by charging “colossal” fees for a “very poor service”.

Mr Cameron said: “I’m absolutely clear that if companies don’t deliver on their contract then they should be pursued for that money.”

He added: “I think we should be raising our sights, and thinking of the incredible inspiration that these Games are going to bring. The facilities are built, the country is ready, we are in really good shape.”

But Ian Swales, a member of the public accounts committee that has examined some G4S Olympic contracts, said the firm should have provided a “Rolls-Royce service” after hiking up its charges by £198m.

The Liberal Democrat said MPs had raised concerns about what appeared to be massive profit margins on the contract after fees were increased when the need for extra staff grew.

“We were really concerned because when the announcement of doubling of the number of security personnel was made we looked at the breakdown of the costs and we saw that the G4S contract was going up from £86m to £284m, which felt like a colossal amount of money,” he told BBC Radio 4’s World at One.

He said the programme management costs, which cover training and recruitment, went up from £7m to £60m, while operational costs increased from £3m to £65m. You would expect to get a Rolls-Royce service for this amount of money.”

He added: “We have been pressing on this for months.

“Our assumption at the time was that it felt like there was a massive profit margin for G4S but I guess we never expected that we would then not get the service that was being requested.

“For these large amounts of money you would expect excellent service so to me this is just compounding a felony, vast sums of money buying a service that is very poor quality, it would appear.”

G4S was initially contracted by Games organiser Locog in 2010 to provide 2,000 security staff for £86m, but that figure has since risen to 10,400 personnel in a contract now worth £284m.

Keith Vaz, the Labour chairman of the Commons Home Affairs Select Committee, summoned G4S chief executive Nick Buckles to appear before the committee next Tuesday to explain the problems.