2 Operational delivery of the Games
5. As planning for the operational delivery of the
Games has progressed, significant cost pressures and delivery
risks have emerged, particularly with venue security. LOCOG initially
estimated that it would need 10,000 security guards to secure
the Olympic venues during the Games, based largely on information
from the 2002 Commonwealth Games in Manchester with some information
from the 2006 Winter Olympic Games in Turin.
The Home Office described this as an initial "finger in the
air" estimate. The Department and the Home Office told us
that detailed planning could not begin until plans for the Games,
including the competition schedule and venues, had been completed
in early 2011. However,
LOCOG did contract with G4S in December 2010 for the provision
of 2,000 guards with the remainder expected to come from volunteers
and a government funded programme through colleges of further
education. By the end of 2011, when the Home Office and LOCOG
had completed detailed planning, the estimated number of security
guards required had more than doubled to a maximum of 23,700 on
6. LOCOG has now renegotiated its contract with G4S
to recruit and train the increased number of security guards,
and to deploy and manage the security staff during the Games.
To help meet the recruitment challenge, the Ministry of Defence
has agreed to provide 7,500 military personnel to work as security
guards during the Games; this is in addition to around 3,300 civilian
volunteers. The remaining requirement for around 13,000 will be
supplied by G4S.
LOCOG and the Home Office told us that they are confident that
G4S will be able to provide all the required private sector security
7. LOCOG and the Home Office explained that the diversity
of the security workforce, including the trained military personnel,
would help manage the risk to the security of the Games.
LOCOG and the Home Office told us, for example, that security
roles will be allocated to people with appropriate skills, with
volunteers welcoming people to the venues and directing them to
search and screening positions, and trained security personnel
operating the screening equipment and carrying out searches.
In addition, the Home Office told us that they have received assurance
that security guards being supplied by G4S will be appropriately
skilled and will all be qualified to nationally recognised standards.
8. The increase in the number of security guards
required has nearly doubled the cost to the Public Sector Funding
Package from £282 million at the time of the 2010 Spending
Review, to £553 million, including £46 million for the
cost of military personnel.Following
LOCOG's renegotiation of the contract with G4S, there appears
to be around a 6-fold increase in the number of security guards
to be provided by G4S and the total number to be managed and deployed
has more than doubled. However, the programme management costs
have increased nearly 9-fold (from £7 million to £60
million) and operational costs more than 20-fold (from £3
million to £65 million). Overall, the estimated costs of
the contract with G4S rose from £86 million in December 2010,
when the contract was signed, to £284 million in December
2011. LOCOG did not negotiate a reduction in G4S's profit margin
on the increased security guard requirement.
9. LOCOG told us that the contract with G4S compares
favourably with other contracts in place between Government and
G4S. In addition,
the Home Office told us that in its opinion the costs would not
have been lower had planning started earlier. 
However, it is not clear from the information provided to us that
the increased costs under the contract with G4S reflect only the
changed requirements, or whether, they are also the consequence
of renegotiating the contract in a non-competitive environment.
In addition, the increase in the overall cost of venue security
is the main reason why the Public Sector Funding Package is now
so finely balanced.
10. The other major operational challenge is that
of transporting athletes, officials and spectators to and from
the Olympic venues, while keeping the rest of London running efficiently.
Transport for London only took control of major elements of transport
operations in 2011 from the Olympic Delivery Authority. This was
a late decision but the Department considers that the new arrangements
are working well.
However, there have been delays in LOCOG's public consultations
on the impact of all the road closures required for the Games,
so communicating the impact to road users remains a challenge.
12 Q62; C&AG's report, paragraph 3.7. Back
Qq99 - 100. Back
Q63, 67; C&AG's report, paragraphs 3.7 - 3.8 Back
Qq66, 68 Back
Qq30, 80, 82-83 Back
Q28; C&AG's report, paragraphs 3.7 - 3.8. Back
C&AG's report, paragraph 3.10 Back
Qq121 - 122 Back
Q117, C&AG's report, paragraph 3.16 Back