House of Commons - Olympics security - Home Affairs Committee

Olympics security - Home Affairs Committee Contents

Introduction

1. The 2012 London Olympic and Paralympic Games was the largest event ever held in the United Kingdom, and one of the largest international sporting events ever held. Overall, its organisation and execution was a triumphant success. It is estimated that 10,500 competitors took part, the workforce across all venues was around 200,000 people and 8.8 million tickets were sold.[1] However, the running of the Games was thrown into serious doubt two weeks prior to the Opening Ceremony when the principal security contractor, G4S, suddenly announced that it would not be able to fulfil its contractual duties. In the following days leading up to the Opening Ceremony, G4S's inability to deliver to its contract became the largest challenge facing the London Organising Committee of the Olympic and Paralympic Games (LOCOG).[2]

2. Thanks to robust contingency planning from an early stage, and the recognition by LOCOG, Home Office officials and the police that the problem might be far worse than G4S initially suggested, arrangements were quickly made for armed forces personnel to fill the gap left by G4S's shortfall. The security operation at the Games passed off without any significant problems, and the contribution of the armed forces and volunteers to the Games was widely praised. It was just as well in the circumstances that the military and police were able to be made available in view of the failure of G4S.

3. G4S's failure to deliver on this occasion is a significant matter of public concern. Uncertainty remains over exactly how much of its £237 million payment under the contract, including a £57 million management fee, G4S will seek to claim. The contract provides for various penalties and remedies in the event of G4S's failure—LOCOG only pays for hours delivered, it has the right to retain a proportion of the management fee if G4S fails to achieve a specified proportion of the scheduled hours, and G4S must meet the cost incurred in bringing in alternative providers, such as the armed forces.[3] However, there appear to be differences of opinion between LOCOG and G4S about the level of service which was actually provided during the Games.

4. The issue is also especially important because of the lessons to be learned for the planning of future major events, particularly from the effective contingency planning by the Home Office and LOCOG which was activated successfully at a very late stage in the process.

5. Perhaps the most significant area of public concern flows from the growing role that G4S plays in the criminal justice system, and in public contracts more widely. The company currently holds contracts with the Home Office and police forces worth £585.2 million. These include the running of Brook House Immigration Removal Centre (£53.5 million over five years), the provision of accommodation, transport and related services for asylum seekers under the COMPASS project,[4] the provision of police custody suites for three forces, and the provision of forensic medical services for another 11.[5] G4S also holds a major contract to deliver middle and back office services for Lincolnshire police, worth £229.7 million over ten years, which covers a wide range of services including HR, finance, custody services and fleet management. As Nick Buckles, Group Chief Executive Officer of G4S plc, told us

"we deliver about four out of five notes in your wallet, we are the largest cash-carrying company, we read four of ten of your meters, we run your prisons, we run your hospitals, so we do a large number of jobs to help British society".[6]

In this context, the performance of G4S on a contract as high-profile as the Olympics is a significant matter of public concern.

Early warnings

^6.The venue security contract was awarded to G4S in December 2010. The company was originally required to manage a workforce of 10,000, of whom 2,000 would be new staff recruited and trained by G4S and the remaining 8,000 would be from other sources. Towards the end of 2011—as more details, such as the schedule of events were finalised—it became clear that a much bigger workforce would be required. In December 2011, a deed of variation was signed, increasing the total size of the security workforce to 23,700, consisting of 10,400 staff supplied by G4S, 5,000 armed forces personnel, 3,000 volunteer Games Makers recruited by LOCOG, 3,700 students recruited through a programme called Bridging the Gap, 1,000 guards employed by Wilson James (another security company) and various other, smaller groups of staff^.[7]

7. The awarding of the venue security contract was not the only involvement G4S had in the Olympic security programme. The company was involved in planning the security operation for the London 2012 bid. In the early stages after the bid was awarded, it helped to design the security operation, and then won the contract which resulted from that design.[8] Once it had won the contract, the company paid £5 million to LOCOG for marketing rights, which allowed it to advertise its connection with the Games.[9]

8. LOCOG and the Home Office were concerned about the development of the security operation from an early stage; naturally so, given its unprecedented scale. The concerns were not focused on G4S specifically, but on the overall operation including Games Makers, the police and the armed forces. The Home Secretary told us that she commissioned Her Majesty's Inspectorate of Constabulary to conduct a review of the security arrangements on 25 August 2011, to determine whether they were on track to deliver a safe and secure Games.[10] The Report, which was produced on 30 September, identified some potentially serious problems. LOCOG was 18 months behind in the production of security policies and standard operating procedures, which was having a knock-on effect of LOCOG's delivery of venue security plans. This, in turn, was causing delays in establishing an accurate picture of the number of staff who would be required. The Report noted that it was usual to devise security plans first, and to determine the number of staff required on the basis of the plans, but the size and scale of the Olympic security operation meant that LOCOG had adopted a concurrent rather than a more conventional linear approach to security planning.[11] Sir Denis O'Connor, HM Chief Inspector of Constabulary, summed up the findings:

"This plan is not detailed enough at this point. [LOCOG] have had a lot of other things to do. It is now time to have a detailed plan so that the numbers make sense, the roles are clear, and you can recruit and train people with an end in mind".[12]

LOCOG had lead responsibility for dealing with the Inspectorate's recommendations, but responsibility for venue security planning was shared with the Home Office, the Centre for the Protection of National Infrastructure and the police, with the Venue Security Delivery Board as the principal decision-making forum.

9. The HMIC Report in September also noted that:

"the workforce project requires frequent and intrusive performance monitoring across all four of the interdependent workstreams (demand, source, train and deploy)".[13]

Charles Farr, Director-General of the Office for Security and Counter-Terrorism at the Home Office and Chair of the Olympic Security Board, and Paul Deighton, Chief Executive of LOCOG, described to us in some detail the new monitoring arrangements which were put in place in response to this recommendation.[14]

10. HMIC conducted another review in February 2012 to follow up its recommendations.[15] The Review Team was satisfied that LOCOG had plans in place to resolve all the problems identified in its earlier Report, although some standard operating procedures, which were needed before some of the training for security staff could be developed, were still outstanding. Sir Denis told us that the Inspectorate had been satisfied that LOCOG had a plan, but they identified residual risks that he suggested were in "the nature of the business".[16] One of these was the delivery of the manguarding capability which was, by the nature of the task, a risk area. Nobody has suggested that the delays in producing venue security plans were in any way responsible for the failure of G4S to deliver its contract. Mr Deighton rejected this suggestion in unambiguous terms when it was put to him.[17]

11. In addition to the two HMIC Reports commissioned by the Home Office, LOCOG commissioned two reports of its own, an internal audit report, prepared by staff of KPMG reporting to the LOCOG Head of Internal Audit, in December 2011 and a report by Deloitte in May 2012.[18] The Deloitte report was commissioned because LOCOG was concerned about the quality of the management information it was getting from G4S and about the way that G4S was communicating with applicants.[19] Deloitte identified serious problems with G4S's management information and their overall operation:

"The current management information provided by G4S is fragmented, inconsistent and of variable levels of integrity in respect of sources, ownership and management ... it is difficult to offer a high degree of confidence that end data figures provided in final reports to LOCOG provide an accurate picture of reality".[20]

"It appears that the Recruitment programme is currently failing to generate the required throughput of quality candidates to the Pass Complete stage ... There is a significantly higher attrition rate than anticipated by the G4S training team between the Pass Complete and Training Attendance stages ... Training delivery slippage ... is generating concerns around capacity".[21]

The Report also criticised G4S's communications with its applicants and recruits, indicating that its approach lacked detail, did not provide an understanding of the key messages which needed to be communicated at each stage, and was failing to address high attrition rates by engaging effectively with applicants.[22]

12. This cannot have come as welcome news to LOCOG, barely two months before the start of the Games. Mr Buckles told us that G4S implemented all of Deloitte's recommendations within a week: "put in a new governance structure, put in a new management information reporting template and make sure the meetings were more formally organised on a weekly basis".[23] G4S and LOCOG agreed a new set of management data and a new format for presenting it.[24]

13. 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.

14. Assistant Commissioner Chris Allison, the senior Metropolitan Police officer in charge of Olympic security, told us that he had seen only the HMIC reports, not the internal audit report prepared by KPMG staff or the Deloitte report.[25] He suggested that this might be because the consultants' reports were commissioned by LOCOG, a private company, and produced by private consultants. Similarly, David Taylor-Smith, Chief Operating Officer of G4S, told us that the company had never been given access to the internal audit report or the reports by HM Inspectorate of Constabulary, although it had been given the Deloitte Report.[26]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.

The problem becomes apparent

15. Although there had been some earlier warnings that all was not well with the G4S contract, G4S management remained confident throughout that it was on track to meet its targets, and all the management information it produced appeared to confirm this. The scale of the problem with the G4S contract therefore became apparent very suddenly, 18 months into the contract but only a few weeks before the Games (see Annex for a detailed timeline of events). Nobody—not even, it would appear, G4S's senior management—was aware of any problem with G4S's recruitment or scheduling until a meeting of the Olympic Security Board on Wednesday 27 June, when G4S reported that it was experiencing "scheduling problems".[27] This was mainly due, it told the Board, to staff being unavailable for work until 27 July, the day of the opening ceremony.[28]The Board was assured that the problem was "small-scale, resolvable and temporary" and that the total shortfall would be fewer than 1,000 staff.[29]

16. Over the following days, LOCOG and the Home Office were given "very strong and very clear" assurances by G4S that the problem was small and manageable.[30] However, this did not stop Mr Farr from deciding, subject to ministerial approval, that it would be necessary to prepare to activate the contingency plan, and on 28 June a small number of armed forces personnel from the Military Contingency Force were put on standby to be ready to step in to help out at the Games at 24 hours' notice.[31] Mr Farr told us that he was getting indications from other sources that G4S's operation was not running as smoothly as the company appeared to believe. He told us that, by 5 July it appeared to him that G4S was not resolving the problem:

"I was basing this on data we were getting from the ground, rather than data I was getting from G4S ... I certainly wouldn't have relied on [information from G4S] by this stage as a single source of truth".[32]

The Home Secretary spoke to Nick Buckles on 6 July and met him on 10 July, and on neither occasion did he suggest that the problem was any more serious than it appeared to be on 27 June. According to Mr Farr, on both occasions Mr Buckles reassured the Home Secretary that the contract would be fulfilled.[33] The Home Secretary had been made aware previously of concerns regarding security arrangements, and indeed had as a result commissioned the report of the inspector of constabulary back in August 2011 (see paragraph 8). Meanwhile, Ian Horseman-Sewell told Reuters on 6 July that "We are delivering a London Olympics now. If there was a similar event going on in Australia, I would be bullish that we could deliver this at the same time".[34]

17. G4S continued to produce data which appeared to show that there was not a serious problem. Charles Farr told us that, on 1 July, he was given data that showed that 37,000 people had passed the G4S interview, 25,000 had been security screened, 21,000 had been accredited, 14,700 had been SIA trained and 9,000 were ready to work.[35] Given these assurances about the absolute numbers already ready for work and still in the pipeline, it would be understandable if everybody had accepted the reassurance that this was a minor and temporary problem, so Mr Farr and ministers therefore deserve credit for having begun to take contingency action notwithstanding the assurances which they were still receiving from G4S.

18. It must be noted that at this stage complaints were emerging about potential employees not being informed about where they would be deployed, the expectation that they would pay for their own uniforms unless deployed at a minimum level by the company (a matter that was in the hands of the company rather than the employee) and in general a lack of communication from G4S. We were told that some experienced individuals, including former police officers, took up other employment because they were not sure whether G4S was going to make use of their services. While this may be a part of the general failure which this Committee is investigating, it also points to extremely poor management and personnel practices within the company. We have no means of knowing whether this was specific to the Olympic contract or reflects general practice in the company.

19. After two weeks of repeated commitments from G4S that the contract would be fulfilled and that the problems they were dealing with were temporary,[36]on 11 July, Nick Buckles and David Taylor-Smith, Chief Operating Officer of G4S plc, arrived at LOCOG's offices in Canary Wharf to report for the first time that they were not going to be able to deliver on the contract. They then travelled to the Home Office, where a meeting of the Olympic Security Board was due to take place, telephoning Charles Farr on the way. Mr Farr notified the Home Secretary before going in to chair the Board meeting.

20. 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.

The contingency plan

21. Following the Olympic Security Board meeting on 11 July, the contingency plans which the Home Office had begun to put in place on 27 June were scaled up. The number of troops required from the Contingency Force for venue security was increased from 725 to 3,500. The military contribution was concentrated at the London venues and those nearby. At football venues outside London, the police were called in.[37]The Government had no alternative course of action. As Assistant Commissioner Allison told us:

"... clearly the Olympics is going to happen, we can't stop it happening. Unlike other matches that we could delay for a period of time, we couldn't, it had to happen, so this is where the contingency plan stepped in".

22. It was only thanks to this robust contingency plan, which had been developed from an early stage of the planning process, that London was able to deliver a safe and secure Games. It was only thanks to the far-sighted planning of officials at the Home Office, LOCOG and other Olympic security partners that a catastrophe was averted. However, activating the contingency plan came at a price for many of those concerned. Lord Coe, Chair of LOCOG, told us:

"I am acutely aware that I displaced family plans, the military came to the table, some of them had been on active duty until relatively recently, some were expecting to see more of their families during the summer months. I am very aware of that, and I would put immediately on record my gratitude to the contingency and the planning, and our ability to actually draw down. The military became one of the defining characteristics in the delivery of the Games".[38]

Thousands of Olympic and Paralympic tickets were made available to members of the armed forces as a gesture of thanks and G4S has donated £2.5 million to military charities.

23. 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.

G4S's treatment of applicants and staff

24. The Deloitte Report noted that G4S's communications with its staff and applicants was one of the weak points of its operation. Over the summer, the Committee received dozens of submissions sent by and on behalf of those who had applied to work for G4S. Although these submissions come from numerous, unconnected individuals, their accounts are remarkably similar.[39] Some applicants passed the initial interview and vetting, but were never allocated training courses. Some applications were dropped with no explanation, even after the candidate had given up several days for training and passed successfully. Candidates were not reimbursed for training until they worked their first shift, so some people ended up spending several days training, foregoing other opportunities in some cases, for no reward.[40] Some applicants were assigned to locations which they could not possibly get to, with no accommodation offered—one applicant from Northern Ireland says that he reported for work in Glasgow as requested but was sent home because G4S had run out of uniforms.[41] Candidates passed training and accreditation and were even issued with passes and uniforms but still did not have work allocated at the start of the Games.[42]

25. Overall, these submissions present a clear and consistent picture of poor communication between G4S and its prospective staff, with staff left to make all the effort to stay in touch and, even then, not being able to get a satisfactory response from G4S. In fact, Mr Deighton told us that LOCOG was so worried by the situation that they decided to offer G4S advice and support with its staff communications, based on LOCOG's own, highly successful, experience of recruiting volunteer Games Makers.[43] If further evidence of G4S's poor management of its prospective recruits were needed, it can be found in the attrition rates (the proportion of prospective recruits who drop out of the process) discovered by Deloitte. By April 2012, the overall attrition rate among staff at the "passed complete" stage—those who had been successful at interview, had passed initial screening and were ready for training—was 71%. G4S's baseline assumption had been that it would lose only 31% of applicants at this stage.[44]

26. 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.

Redress

27. The precise scale of G4S's failure remains a matter of some dispute between G4S and LOCOG. This use of a mixed workforce, most of whom were managed by G4S but only some of whom were employed by them, means that the figures we have been given are not all calculated on a consistent basis. LOCOG have told us that on 17 July, a total of 8,119 staff were required but only 7,340 were available, a shortfall of 10%. However, the total number of staff supplied by G4S was 4,389, approximately 35% less than the LOCOG demand. It was only through the use of an additional 1,159 military personnel that the overall shortfall was reduced to 10%.[45]

28. G4S, on the other hand, is keen to focus on overall numbers and Mr Taylor-Smith told us that G4S had supplied a total of 11,000 staff against a demand of 10,400.[46] However, many of these staff only became available during the transition period between the Olympics and Paralympics. G4S later clarified that, during the pre-Games period, the shortfall was 32%, and during the Olympics it was 19%. It was only on 13 August, the day after the closing ceremony, that the number of staff supplied first met the demand from LOCOG.[47]

29. Establishing the true picture is more complicated than this, since it depends not only on the total number of staff provided but on their availability for different shifts at different venues. Mr Deighton explained that it was possible to cope with a shortfall of up to 15% at a specific venue at any given time, for example, by asking staff to work a bit longer or by tolerating lengthier queues, but that shortfalls of more than 15% created a problem.[48] We recommend that LOCOG and G4S quickly seek to reach a common position on exactly how far short G4S fell from its contractual requirements.

30. G4S has already acknowledged that it is solely responsible for its failure to deliver the contract, a view which is shared by LOCOG and others. We agree with Lord Coe, who told us that "it is difficult to look beyond their inability to deliver on the contracted number of security personnel that we were consistently assured by them that they would be able to deliver".[49] LOCOG has various financial penalties and other remedial rights at its disposal under the contract and these are now a matter for discussion between LOCOG and G4S.[50] LOCOG stopped paying G4S on 13 July, after it had received between £89 million and £90 million. How much of the remaining £146 million G4S will receive—and whether there will be a substantial sum recovered from the £89-90 million already paid—remains to be seen.[51] It is clearly a matter for LOCOG to negotiate robustly in the public interest, and Parliament will expect to know the outcome in due course.

31. When he appeared before us in July, Mr Buckles gave a number of undertakings:

a) To reimburse police forces for all costs arising from the shortfall in G4S staff, including accommodation;

b) To reimburse the military for all costs arising from the shortfall in G4S staff, including accommodation;

c) To forego payment, pay a penalty and forfeit a portion of their management costs for every shift that was not covered; and

^d)To make an appropriate charitable contribution for the benefit of police and armed forces personnel, something which G4S has already done.[52]

The total cost of these commitments is expected to generate an overall loss of £50 million to G4S, which was announced in the company's half-yearly results.[53]

32. Mr Buckles was, however, less contrite when he appeared before the Committee in September, when he insisted that G4S would be claiming full payment from LOCOG in line with the contract provisions. He appeared to think that G4S's contribution to the Games was being under-valued:

"I am not going to sit here and say we did a great job. I am nowhere near saying that but what I am saying is that we did deliver ... We delivered a significant portion of the contract, and our people ... did an excellent job and played a very major role in securing these Games".[54]

Mr Buckles also said that G4S would be claiming its £57 million management fee, or as much of the fee as it was entitled to under the contract. He argued that the management fee represented costs that G4S had already incurred in running the recruitment and training operation, albeit with limited success^.[55]

33. 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.

34. 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.

35. 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.

Lessons for the future

34. In awarding the contract to G4S, LOCOG appears to have been influenced by G4S's size and reputation. This is not unreasonable—a bidder's previous performance on other contracts is something which any diligent procurement exercise should take into consideration—and it is a natural assumption that the world's largest security company would be a safe choice for such a large project. As Mr Deighton told us:

"I think somebody else probably could have done it but [G4S] were the obvious and best candidates to do it. They are the biggest security company in the world. The Government is their most important client. The eyes of the world are on this project. They were highly incentivised to succeed because of all those reasons and believed they could succeed".[56]

The Olympic security contract was, in Mr Buckles's words "one of a kind ... there wasn't a track record, there wasn't a blueprint".[57] That did not stop the company, as we know, boasting that G4S could be delivering Olympic security operations simultaneously around the world. There is no doubt that the contract presented a tremendous challenge, involving the recruitment, training and accreditation of thousands of staff, and allocating them to 49 different roles across 110 venues, all of which had to be completed to a tight, non-negotiable timetable.[58]

35. However, it remains the case that, on this occasion, the world's largest security company simply failed to deliver the goods. As Mr Deighton told us:

"... I think they could have done this job ... This was a very doable job. They should and could have been able to do it and they simply failed to manage this part of their business efficiently enough to deliver it".[59]

Mr Deighton has every right to describe the job as "very doable" since LOCOG itself succeeded in recruiting, training and accrediting 70,000 volunteer Games Makers, allocating them to different roles, supplying them with uniforms and scheduling them to shifts under much the same constraints that G4S was working.

36. The fiasco surrounding G4S's Olympic contract has focused attention on the role of the private sector in delivering public services, and the way in which private-sector providers are managed and monitored. Both the Culture Secretary and the Defence Secretary have been quoted in the media as saying that the issue had caused them to think again about the role of the private sector;[60] that would in our opinion be a wise thing to do. The Minister for the Cabinet Office also has concerns about the failure to take account of providers' previous track-record, which can lead to contractors who are already failing being awarded new contracts. Mr Buckles himself agreed that a company's long-term track-record was an important element in its ability to win new contracts.[61]

37. The precise reasons for G4S's failure remain unclear, though all the evidence points to poor management information and poor communications as the two main contributory factors. G4S has commissioned a review from PwC, and Mr Buckles has agreed to share its findings with the Committee.[62] 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.

38. 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.

39. 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.

40. 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.

1 Olympic Britain, House of Commons Library ,2012; www.olympics.org.uk Back

2 Q 406 (Lord Coe) Back

3 Letter from Paul Deighton, Chief Executive of LOCOG, to the Chair of the Committee, dated 16 July 2012 Back

4 Commercial and Operational Managers Procuring Asylum Support Services Back

5 Letter from the Home Secretary to the Chair of the Committee, dated 19 July 2012 Back

6 Q 636 Back

7 Letter from Paul Deighton, Chief Executive of LOCOG, to the Chair of the Committee, dated 16 July 2012 Back

8 Ian Horseman-Sewell, Director of Major Events, G4S Secure Solutions, speaking at a conference on Olympic and Paralympic security at the Royal United Services Institute, 25 January 2012. Details of the event, including an audio recording or Mr Horseman-Sewell's speech, are available on-line at www.rusi.org. Back

9 Oral evidence on the Work of the Home Secretary, 6 September 2012, HC 563-i, Q 36. See also Q 445-450 (Mr Farr). Back

10 Olympic Security Commission - Phase 1 (LOCOG Security), HMIC, 30 September 2011. The Report is published on the Committee's website. Back

11 Ibid, section 1.2. Back

12 Q 310 Back