G4S confirms £50m loss from Olympics security ‘shambles’

G4S is conducting an internal review after its failure to provide all of the 10,400 contracted guards for London 2012 forced the Government to step in with military personnel.

Despite the “humiliating shambles”, the company will still be providing the majority of security for the Paralympic venues as the number of troops and police officers on duty is scaled back, organisers confirmed yesterday.

G4S said it had delivered 83 per cent of contracted shifts during the Olympics and that it was confident the Paralympic Games – which start today – would be fully staffed with a security workforce.

Its half-year results revealed a significant drop in pre-tax profits to £61m from £151m a year earlier, although profits were held flat on an underlying basis after sales increased 5.8 per cent to £3.9bn.

There had been fears that the Olympics contract issues would hurt the group’s prospects for future Government work.

Chief executive Nick Buckles confirmed that the resources G4S had put into sorting out the debacle meant it withdrew from bidding for a Department for Work and Pensions contract worth £20m a year.

But he said no contracts had been lost as a result of the Olympics deal woes and insisted the group would continue to play a “major role” in the public sector, with an overall £3.8bn-a-year contract pipeline.

He 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 the coming months and years.”

Mr Buckles has been left fighting to save his career after the debacle and an intense grilling by MPs on the home affairs select committee, in which he agreed the firm’s performance had been a “humiliating shambles”.

But reports in recent days suggested he had the support of major shareholders and he said yesterday that he hoped to keep his job, having been with the group for 28 years – 10 of them as chief executive.

He is preparing for a second appearance in front of MPs on 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 a total of more than 650,000 staff worldwide – also announced 1,100 job cuts as part of a restructuring programme started in December.

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

Locog chief executive Paul Deighton said G4S will use 4,000 to 5,000 workers to staff the Paralympic Games.

The military contingent will consist of 3,500 soldiers with 1,000 in reserve – scaled back dramatically from the 12,200 troops involved in venue security during the Olympic Games.

Police numbers will also be halved, with around 7,000 officers on Paralympic duty across the country, compared with 14,500 previously.

Mr Deighton said he was “fully confident” in the private company’s ability to deliver this time.

“In very simple terms, we’re switching from an approach which had a slight majority of military during the games to one which will have a slight majority of private sector security for the Paralympics,” he said.

The opening ceremony is held at the Olympic Stadium tonight, beginning at 8pm.

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