To be published as HC 531-i




Home Affairs Committee

Olympics Security

Tuesday 17 July 2012

Nick Buckles and Ian Horseman-Sewell

Evidence heard in Public Questions 1 - 287



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Oral Evidence

Taken before the Home Affairs Committee

on Tuesday 17 July 2012

Members present:

Keith Vaz (Chair)

Nicola Blackwood

Mr James Clappison

Michael Ellis

Lorraine Fullbrook

Dr Julian Huppert

Alun Michael

Bridget Phillipson

Mark Reckless

Mr David Winnick


Examination of Witnesses

Witnesses: Nick Buckles, Chief Executive, G4S, and Ian Horseman-Sewell, Global Events Specialist, G4S, gave evidence.

Q1 Chair: Mr Buckles, Mr Horseman-Sewell, please be seated.

Nick Buckles: Thank you.

Ian Horseman-Sewell: Thank you.

Chair: Thank you very much for coming this afternoon. This is the Committee’s continuing inquiry into Olympic security. I am most grateful to you for agreeing to come to give evidence to us on the last day of the parliamentary session. I want to make it clear that the Committee is also going to be seeing the Home Secretary. She has agreed to come on 10 September. Mr Charles Farr and the Chief Inspector of Her Majesty’s Inspectorate will also be asked to give evidence, along with LOCOG and the Metropolitan Police. So you are not an isolated witness in this inquiry.

Mr Buckles, since last Thursday, when this matter was raised in the House of Commons, your company’s value I think has gone down by 9%; your Chairman has issued a statement not necessarily backing your position; the British Home Secretary has said that the responsibility for the lack of security staff rests entirely with yourselves as those contracted to deal with this issue, and I cannot recall a statement in the House where Members on all sides of the House were so concerned by a private sector provider. Why are you still in your post?

Nick Buckles: My first priority is clearly to make sure we deliver as many people as we can on this contract. That has to be my number one priority. It is not about me, it is about making sure we deliver the contract. Secondly, I feel I am the right person at the moment to make sure that happens and make sure that our company comes out of this with its reputation intact. My future is my third concern and not my current concern, but certainly in my view and the view of the board, I am the best person at the moment to take this through to its final conclusion.

Q2 Chair: So you will accept ultimate responsibility for what Members of this House have called a fiasco and a shambles? You will take that responsibility? You may be making sure that it is delivered now, but ultimately, you will agree, somebody has to be responsible for this?

Nick Buckles: As CEO of the group, I am accountable for the delivery of this contract.

Q3 Chair: But you have not delivered the contract, clearly. We saw the statement that has been issued by the Chairman, and you used the phrase that you were "disappointed" not to be able to deliver the contract. I am disappointed when my football team does not win the championship. Surely there is a better word to describe the responsibility that G4S has for leaving the Government and the people of this country in the position that they are in?

Nick Buckles: I think I said I was deeply disappointed. I have also gone on record as saying I am very embarrassed about the situation as well. That is all I can really say at the moment.

Q4 Chair: So you are just deeply disappointed and embarrassed; you are not sorry?

Nick Buckles: I have already said I am sorry, absolutely, deeply sorry.

Q5 Chair: As far as G4S is concerned, I have seen a number of your appearances on television over the last few days. You describe yourself as a very large company and you say you have 666,000 employees. Is that right?

Nick Buckles: That is correct.

Q6 Chair: By my reckoning, that is bigger than the number of people who live in Luxembourg. You have your own flag and your own company song. Why were you not able to provide the necessary people in order to fulfil this contract?

Nick Buckles: It is a complex contract, very, very complex. We signed it in December, it is our contract, but to get 10,000 people plus on the ground in a relatively short period of time has been a huge logistical challenge. We did not know that the contract was not going to perform until very late on, purely because the whole process is very back-ended in terms of getting everybody ready for the Games. We had filters in place all the way through from March onwards to see how well we were progressing in that recruitment drive, but the fact is that you have lots of different parts coming together at the last minute in terms of SIA training, skills-based training, accreditation. It is only when you get to the end that you really have a strong position on where they all are in that pipeline.

Q7 Chair: So let us look at the facts, because the Committee is interested in facts this afternoon. The Home Secretary says that she knew on Wednesday that there was going to be a shortfall of G4S employees. When did you know and when did the company know?

Nick Buckles: I was told on 3 July. I was phoned on holiday that they were having problems on delivering the contract over that preceding weekend.

Q8 Chair: Right. When you say "they", this is your company?

Nick Buckles: My company.

Q9 Chair: Who informed you on 3 July that there was a problem?

Nick Buckles: David Taylor-Smith, who is our group COO.

Q10 Chair: What did he say?

Nick Buckles: He said two things, "We have had problems over the weekend with shortfalls on the contract, and secondly, that is partly down to the fact our scheduling system hasn’t effectively worked to roster the staff".

Q11 Chair: So there was no indication before 3 July. All the meetings, all the reports, Her Majesty’s Inspectors’ report last September, the Deloitte report that had been commissioned by LOCOG, your own members of staff did not know that there was a shortfall until 3 July?

Nick Buckles: Correct.

Q12 Chair: But isn’t it astonishing, when even in your annual report you claim that this is the biggest and most prestigious contract that you have ever received, that it took so many years since you signed the contract to know that you did not have sufficient staff?

Nick Buckles: As I say, we only signed the final contract, which was five times bigger, in December.

Chair: Yes, we will come on to the contract in a moment.

Nick Buckles: Okay, yes.

Q13 Chair: I want to know the knowledge; the first theme of this investigation is knowledge-when did you all know-before we go on to the contract. When did you all know? The Home Secretary is very, very clear: she knew on Wednesday. When did the company know that there were problems? Surely not on 3 July.

Nick Buckles: 3 July.

Q14 Chair: Until 3 July, you had no knowledge?

Nick Buckles: The only flag we had was the Deloitte review in April.

Q15 Chair: Yes, and what did the Deloitte review tell you?

Nick Buckles: It was a review for both parties, LOCOG and G4S: 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.

Q16 Chair: So you were already alerted in April that there were problems in the way in which this contract was being delivered. You must have done, if you have just said that they told you to hold formal meetings.

Nick Buckles: Well, we put in place all the recommendations that came out of that report within one week of the report happening and followed them religiously on a weekly basis thereafter.

Q17 Chair: So you knew in April that there were problems. You then implemented the recommendations, but then again on 3 July you realised that they had not been implemented?

Nick Buckles: No, they were implemented, but the issue was this back-end process of everybody coming together. So the report was telling us how many people were being trained, screened etc., but ultimately we did not get enough people through that whole process by the end. It was just a question of it not coming together quickly enough towards the end of the process.

Q18 Chair: Before I open this up on the issue of when did you know and what the company did in the last couple of years, Mr Horseman-Sewell, on 6 July you told Reuters, "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." Was that a serious comment you made to Reuters?

Ian Horseman-Sewell: Absolutely, Mr Chairman. At the time, we were still focused, and we still are focused, on delivering the right number of people.

Q19 Chair: But Mr Buckles has just told us that he knew on 3 July. You were the Managing Director in charge of this event, I understand. Is that your title?

Ian Horseman-Sewell: No, I am the Account Director for the contract, Mr Chairman.

Q20 Chair: You are the Account Director. So Mr Buckles did not tell you before you spoke to Reuters three days later that there was a problem with this contract?

Ian Horseman-Sewell: I had no conversation with Mr Buckles before that.

Q21 Chair: Between the 3rd and the 6th?

Ian Horseman-Sewell: Correct.

Q22 Chair: So now do you regret saying that you could deliver the Australian Olympics? Are you sorry for saying for that?

Ian Horseman-Sewell: Absolutely.

Q23 Chair: So you cannot deliver two Olympics on different parts of the planet at the same time. G4S is not capable of doing this?

Ian Horseman-Sewell: Today we are focused on delivering one.

Chair: Yes, but you cannot deliver the two that you said you could. Is that a yes or a no?

Ian Horseman-Sewell: We clearly cannot at the moment.

Q24 Nicola Blackwood: If you were informed, Mr Buckles, on 3 July that you were going to have a problem delivering a contract as important as the Olympics and on an issue as important as security, can you explain why you waited eight days to inform the Home Secretary?

Nick Buckles: On 3 July, we informed LOCOG and we then set up a daily working party with LOCOG and the Home Office to work through the issues we were experiencing. We are very transparent with the issues we are 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 were going to be able to deliver we couldn’t. So it was a daily evaluation of what was coming through in terms of what we could or could not deliver, and we were sharing that quite openly.

Q25 Nicola Blackwood: So on the 3rd it was not clear that you were going to fail on your contract.

Nick Buckles: No.

Q26 Nicola Blackwood: On what day exactly was it clear that you were going to fail to complete the contract?

Nick Buckles: I think, as I said, day by day the information was changing.

Q27 Nicola Blackwood: Yes, but which day exactly? On what day would you say you crossed the Rubicon?

Nick Buckles: The 11th.

Nicola Blackwood: The 11th?

Nick Buckles: Yes, at an OSB meeting.

Nicola Blackwood: Okay. Could you describe for me-

Q28 Chair: Sorry, what is an OSB meeting?

Nick Buckles: Sorry, it is the Olympic Security Board.

Q29 Nicola Blackwood: Could you describe exactly who was in that meeting?

Nick Buckles: Yes, it is chaired by Charles Farr.

Nicola Blackwood: Sorry?

Nick Buckles: Chaired by Charles Farr.

Chair: Mr Buckles, you may need to speak up. The acoustics are not very good in this room.

Nick Buckles: Sorry. It is chaired by Charles Farr and has members of LOCOG, members of the Home Office, members of the police, members of the military; probably about 40 people in total.

Q30 Nicola Blackwood: Why exactly at that point did you decide that you were just not going to be able to complete the contract, as opposed to the day before? What had changed from the 10th to the 11th that made you conclude that there was just no hope of you delivering your contract so close to the Olympics?

Nick Buckles: I was given a very straight question by the Chair, saying, "Do you think you are going to deliver these people?" The military were there and we had to come up with a decision, and I said, "No, I do not believe we can deliver to the full extent of our contract".

Q31 Nicola Blackwood: But you raised concerns on the 3rd?

Nick Buckles: Yes.

Q32 Nicola Blackwood: Are you telling me you had not been asked that question asked before then?

Nick Buckles: We had been working together to get the information and data sorted out so we could make that judgment.

Q33 Nicola Blackwood: Right, and it took you eight days to make that judgment.

Nick Buckles: It did.

Q34 Mr Winnick: You spoke, Mr Buckles, in answer to a question from the Chair about reputation-you are concerned about the reputation of the company.

Nick Buckles: Certainly.

Q35 Mr Winnick: Many would take the view that the reputation of the company is now in tatters. You wouldn’t agree.

Nick Buckles: I think at the moment, I would have to agree with you. We have had a fantastic track record of service delivery over many years in many countries, but clearly this is not a good position to be in, but we feel that we have to make every endeavour to deliver as well as we can on this contract.

Q36 Mr Winnick: Mr Buckles, it is a humiliating shambles, isn’t?

Nick Buckles: It is not where we would want to be, that is certain.

Q37 Mr Winnick: It is a humiliating shambles for the company, yes or no?

Nick Buckles: I cannot disagree with you.

Q38 Mr Winnick: No, I would not have thought you would. Mr Buckles, you say that you were notified by your colleagues, junior colleagues to yourself-because you are the overall boss-and as asked by, among others, Nicola Blackwood, on 3 July. Now, you knew what was coming up. You knew very well-if anyone knew-first and foremost, when the Olympics were due to begin; it would be your company, for the most obvious reasons, together with the Home Secretary. How is it possible that all these problems accumulated and yet you, the overall boss, were only told on 3 July, some two or three weeks before the opening of the Games? Were you not progress-chasing? Were you not constantly asking your colleagues what was happening? What world were you living in?

Nick Buckles: I think it is trying to explain the process that we went through from March through to July. We had a weekly monitoring process for both parties, very open, about how many people were going through the process. So we started off on the ground with 1,000 people during June and then we have to build up to 10,000 people pre the Olympics. We had a massive pipeline of 20,000 people we were working on to get Games-ready for early July, so the management information every week was about how many people we were getting ready. It was not a case of having them on the ground and knowing we had a shortage. It was a question of having an active enough pipeline so we could see those people coming through in time for the Games in terms of getting their role-specific training, SIA training and accreditations.

Q39 Dr Huppert: Mr Buckles, G4S has a huge range of different activities, and has come to the attention of this Committee with a number of other problems that you have had-the death of Jimmy Mubenga and things in that space. Potentially you have 773 complaints of abuse from your staff, so you must presumably be used to dealing with bad publicity when things go wrong. Firstly, you say that you told LOCOG on 3 July about this particular problem brewing. You must have been aware at that point that if there was a problem of any magnitude, it would have a significant effect on your share prices. When did you tell the Stock Exchange that there was a problem?

Nick Buckles: On 13 August-sorry, 13 July.

Q40 Dr Huppert: So you told the Stock Exchange two days after you told the Home Secretary that you would not be able to fulfil this contract.

Nick Buckles: Correct.

Q41 Dr Huppert: I understood it was helpful to inform the Stock Exchange relatively quickly of these things, but to come back to the Home Secretary’s information, you told LOCOG, and particularly Charles Farr, who was chairing the board, on 3 July that there was this problem. Are you surprised he did not mention this to any Ministers?

Nick Buckles: I do not think that is for me to comment.

Q42 Dr Huppert: You think it was perfectly reasonable for him to say, "Look, there is this problem. It is getting bigger and bigger. I haven’t yet asked whether they will be able to deliver." Keeping it at that board level was reasonable, or do you just not want to get into more trouble?

Nick Buckles: I am not really prepared to express an opinion on that, Mr Huppert.

Q43 Dr Huppert: Do you have non-executive directors, and do they have a role in keeping an eye on what you, as executives, do in these areas?

Nick Buckles: We do.

Q44 Dr Huppert: Were any of them engaged with this? Were any of them asking you questions about whether you were performing?

Nick Buckles: Every board meeting, we had a report on how the performance was going on the Olympics contract.

Q45 Dr Huppert: When was your last board meeting and what did it say?

Nick Buckles: It said the performance was still going well, because in terms of delivery, it was still going well at that stage.

Q46 Dr Huppert: When was that?

Nick Buckles: It must have been within three weeks. I cannot remember the exact date. I can come back to you in writing on the date.

Q47 Chair: Thank you, Dr Huppert. I am puzzled. When I wrote to you and asked you to give evidence to this Committee, you asked to bring Mr Horseman-Sewell as the person most associated with the contract, other than David Taylor-Smith, who I understand was not directly involved, but became involved because you wanted him to clear up this mess. Why did you not tell Mr Horseman-Sewell for three days that there was a problem? Who did you tell on the board? Who did you tell of your managers? It is a company with 666,000 people. Presumably this is a very, very important contract, but you did not tell the Account Manager that there was a problem, so he told Reuters that he would deliver two Olympics in London and Australia. Who did you tell?

Nick Buckles: I told-I think everybody knew at that stage.

Q48 Chair: Except Mr Horseman-Sewell.

Ian Horseman-Sewell: Mr Chairman, the answer that I gave you was that I did not have a discussion with Mr Buckles about it.

Q49 Chair: So you knew about it?

Ian Horseman-Sewell: At that point, we knew there was a problem with our scheduling system, but in-

Q50 Chair: Right. That is not what you told this Committee, Mr Horseman-Sewell. When I put to you that the comments you made on 6 July were that you could deliver two Olympic Games, one in Australia and one in London, you said that you had not had a conversation with Mr Buckles. Are you now telling us that you knew that there were problems but you still made that statement?

Ian Horseman-Sewell: Our assessment, right up until-

Q51 Chair: No, forget about "our assessment". What was your knowledge?

Ian Horseman-Sewell: My knowledge was that right up until the day before the OSB meeting that has been discussed, we were clearly projecting that we would still continue to deliver the work force that we had been contracted to provide.

Q52 Chair: No, Mr Horseman-Sewell, that is too vague. I am talking about a statement you made to an international news agency that everything was all right on 6 July. You knew on 6 July that there were problems in dealing with this contract. You must have known. There was the Deloitte report and Mr Buckles knew. Unless Mr Buckles kept it to himself, he must have told somebody else. Did you know when you made that statement to Reuters that you could not deliver the London Olympics, let alone the Australian Olympics?

Ian Horseman-Sewell: Mr Chairman, I sincerely believed at the time that we could do that.

Q53 Chair: So you did not know?

Ian Horseman-Sewell: No, I knew that there had been problems in delivering the contract. Any complex project has problems all along and we dealt with those problems every time they have arisen.

Q54 Chair: So you knew on 6 July?

Ian Horseman-Sewell: I knew about a specific scheduling problem, yes.

Q55 Michael Ellis: Mr Buckles, you have said in answer to earlier questions that this was complex, and that explains why there was a breakdown in your company’s processes and that you did not have knowledge until just days beforehand, but yours is the third-largest private employer in the world, isn’t it? It has been reported as having over 650,000 employees. I understand that the turnover was up 4% last year, and is something in the region of £7.5 billion a year. It is an enormous company. The loss that you have referred to on this contract as £50 million is a pittance, isn’t it, to your company, and is it not the case that you did not see this as something that was a priority within the company? It is not a question of the complexity, but a question of competence within your organisation, and getting it right.

Nick Buckles: £50 million is a huge amount of money to our company. We make £500 million a year, so it is 10% of our profits, so it is a significant impact, and hence the share price, which has come down about 15% in the last three days.

Q56 Michael Ellis: Your share price has come down 15% because of your company’s negligence.

Nick Buckles: Because we have not been able to deliver on a contract, that is correct. In answer to your question about the management, we have had exclusive management focused on this contract for two years. Within the organisation, it was ring-fenced as a separate subsidiary within our UK business, with a full management structure, a full management team, a full project board sitting over the top of it to review its progress every month.

Q57 Michael Ellis: But do you accept, Mr Buckles, that people in this country are sick of huge corporations like yours thinking that they can get away with anything, thinking that they can charge hundreds of millions of pounds to the taxpayer to deliver a service that has a crucial reputational importance to this country, as well as to your company, and then fail to deliver and fail to tell anybody that there is a problem until days beforehand? It is simply inexcusable, isn’t it?

Nick Buckles: I have explained how the timing issue has worked out, but in terms of the importance of the contract to us, it was a hugely important contract. The reason we did it was to enhance our reputation. Financially, it is not a huge issue for us in terms of improving our profit. It is not.

Q58 Michael Ellis: Well, I thought you just said it was.

Nick Buckles: No, in terms of how much it is going to cost us now, it clearly is, but in terms of our overall group, the profit from this contract is-

Q59 Michael Ellis: Isn’t that the root of the problem, Mr Buckles? You have just answered it. It wasn’t important to your company financially. Only now that it has become reputationally a problem has it become important. You did not give it the priority that it deserved.

Nick Buckles: We certainly did give it the priority. What I am saying is we agreed to do the contract because we felt we were the only company able to do it and we thought it would be a tremendous boost for our business to be an essential part of delivering the Olympics.

Q60 Michael Ellis: Were there IT problems? Were there managerial problems that meant that you were not getting the feedback further down the chain as to the number of people that were being hired or the number of people that were applying?

Nick Buckles: I think there could be. What I have said is the board have said they are going to do a major review-clearly-of the contract.

Q61 Michael Ellis: Well, hold on, "could be"? We are in a situation days before the Olympics, that you have not been able to deliver, so obviously there is, isn’t there?

Nick Buckles: But what I am saying is our focus has to be on delivering the contract. We will find out exactly what has been the problem, you know, with hindsight. There is no point in us spending time-

Chair: Yes, indeed, as will this Committee in our inquiry.

Q62 Lorraine Fullbrook: Mr Buckles, I would like to go back to the first contract you signed with LOCOG in December 2010, where you were contracted to supply 2,000 security personnel. At what stage did you start to retain 2,000 personnel? The day it was signed?

Nick Buckles: You cannot-sorry. With our business model, you would not have started recruiting them until this year anyway, apart from the management team.

Q63 Lorraine Fullbrook: Can you tell the Committee when you started to recruit, from that first contract to retain 2,000 security personnel?

Nick Buckles: We recruited the management team straight away, put the management team in place. The actual staff that were going to work on venues, we were not going to start recruiting anyway until this year, and we did not know that we were going to have the upsurge and sign-up for the upsurge until December 2011.

Q64 Lorraine Fullbrook: So you were not going to start retaining 2,000 people for the Olympics in July until this year?

Nick Buckles: I believe that is the case.

Ian Horseman-Sewell: That is absolutely the case.

Q65 Lorraine Fullbrook: You had no idea whether you could deliver 2,000 or not.

Nick Buckles: On any weekend-

Lorraine Fullbrook: You had not started to retain them, so you did not know if you could deliver the first contract of 2,000.

Nick Buckles: We had not started to. That is correct.

Q66 Lorraine Fullbrook: What systems did you have in place to deliver the first contract of 2,000?

Nick Buckles: The same system we had-

Lorraine Fullbrook: Monitoring systems.

Nick Buckles: The same monitoring system as we now have, which is a recruitment database, basically.

Q67 Lorraine Fullbrook: You did not know until this year that you could deliver 2,000, but you signed another contract with LOCOG in December last year to supply 10,400 from the original contract. Is that not correct?

Nick Buckles: That is correct.

Q68 Lorraine Fullbrook: What systems did you have in place to monitor the employment of those security personnel?

Nick Buckles: The software we have for monitoring the pipeline, and that is the report we agree and go through every week with our customer to say how many people we have applications from, how many people have been interviewed, and how many have gone into training. To give you some statistics, we have had applications from 110,000 people. They do an online interview. We have face-to-face interviewed 50,000 over the last six months, so there has been a cascade process of taking these people through the whole-

Q69 Lorraine Fullbrook: But my point is you did not know you could deliver 2,000, but you signed a contract last December to deliver 10,400. When did you start recruiting your 10,400 people this year?

Nick Buckles: This year, basically-earlier this year.

Q70 Lorraine Fullbrook: But when this year specifically?

Nick Buckles: I do not know. I have to get the data precisely on that.

Q71 Lorraine Fullbrook: What monitoring systems were in place? Were the people you were engaging on a retainer, or were they being paid at that point in time?

Nick Buckles: No. The whole contract is based on only paying the staff when they do training and then when they actually provide security. That is the contract agreed with LOCOG and specified by LOCOG.

Q72 Lorraine Fullbrook: You were doing this through Jobcentre Plus, I understand.

Nick Buckles: That was one of the means of recruitment.

Q73 Lorraine Fullbrook: There must have been some sort of monitoring process for people who were getting jobs, so what were your contingency plans for people who were getting jobs while they were not being paid, but had been retained by you?

Nick Buckles: They would be coming off the pipeline as not being available.

Q74 Lorraine Fullbrook: What contingency plan did you have to replace them?

Nick Buckles: The whole pipeline process-keep introducing new applications, basically.

Q75 Lorraine Fullbrook: Is it not the case that you could not deliver 10,400, because in the contract-I have a copy here-between you and your subcontractors, there is no end to the liability? It is a draconian contract. Is it not the case that you could never, ever supply 10,400 of your own security personnel?

Ian Horseman-Sewell: Mr Chairman, if I can add-

Q76 Chair: Mr Horseman-Sewell, I think Mrs Fullbrook’s question is should you have signed this contract because you could not deliver it right at the start?

Ian Horseman-Sewell: Mr Chairman, when we start signing-

Q77 Chair: Did you sign this contract?

Ian Horseman-Sewell: I did not sign the contract in December 2010.

Q78 Chair: Right. Who signed the contract in December? Last December, who signed the new contract?

Ian Horseman-Sewell: The Managing Director of our UK business, a man called Doug Hewitson.

Q79 Chair: Right. But you knew about it because you are the Account Manager.

Ian Horseman-Sewell: Absolutely.

Q80 Chair: Were you part of the negotiations?

Ian Horseman-Sewell: I was. I was present when it was signed.

Q81 Chair: Excellent. Could answer Mrs Fullbrook’s question?

Ian Horseman-Sewell: So on the first part of your question, Mrs Fullbrook, at the point that we signed a contract in December 2010, as you quite rightly say, it required us to source 2,000 people as part of an overall security work force of 10,000 people.

Q82 Lorraine Fullbrook: But 8,000 of those were being provided by Bridging the Gap and volunteers.

Ian Horseman-Sewell: Just Bridging the Gap, not volunteers. There were no volunteers conceived of in the security work force at that stage. The 2,000, we were extremely confident about providing those, because our events business anyway most summer weekends is putting out somewhere between 7,000 and 9,000 people to service sporting and other events. Clearly as part of the bidding process-to say how we would do that-our client exercised its own right of due diligence over how we were going to do that and the systems that we were going to do it with. The system that we would use to deploy those people-you talked about systems-and that we use to deploy people at events every weekend and at other times of big sporting events is exactly the same system that we have latterly-i.e. over the weekend of 1 July-had trouble with.

Q83 Mr Clappison: You have told us that there was a review by Deloitte in April and this was a complex project, but the first time you realised that there was a significant risk of you not being able to fulfil your contract and deliver the necessary numbers was on 3 July. That must have come as a shock to you, didn’t it?

Nick Buckles: Complete and utter shock, completely out of the blue. I had no idea that we were going to expect operational difficulties on this contract.

Q84 Mr Clappison: Where were you when you found this out?

Nick Buckles: I was on holiday in the US.

Mr Clappison: When did you return from the holiday?

Nick Buckles: Same day.

Q85 Mr Clappison: What steps did you take when you returned the same day to find out what had gone wrong?

Nick Buckles: Well, our UK CEO/Group COO had already taken steps. He himself had taken personal control of the contract. It reports into him through different layers, basically, so he is now the Project Manager for the contract. He put a very senior team together from our other UK businesses, and I have to say they have worked tirelessly around the clock ever since to try and get the contract back on track.

Q86 Mr Clappison: From what you now know, the inquiries that you have now made, are you able to tell us when people lower down in the organisation were aware of the significant problems that you have told us about?

Nick Buckles: I believe it was the weekend before.

Mr Clappison: The weekend before.

Nick Buckles: Yes.

Q87 Mr Clappison: Were you aware of any problems before that weekend?

Nick Buckles: No.

Q88 Mr Clappison: The weekend before 3 July?

Nick Buckles: No.

Q89 Mr Clappison: So there were no warning lights flashing-nothing. No problems?

Nick Buckles: No.

Q90 Mr Clappison: No. We have been told that you put out a statement saying that you had encountered problems with scheduling and you also said, "In part exacerbated by staff not turning up for shifts." In the House of Commons and the press yesterday, there were MPs standing up and saying that in their constituency only 10 out of 57 people had turned up and reports up and down the country of this happening as and when the need for staff arose. When you were originally planning this, did you make any assumptions about the number of people who might not turn up?

Nick Buckles: Yes, our normal no-show rate on an event is around 90%. Sorry, our show rate is 90%, so our no-show rate is 10%. Sorry about that, Mr Chairman.

Q91 Mr Clappison: Can you explain what has gone wrong with this contract when, say, only 10 out of 57 people turned up at Newcastle or 17 out of 56 turned up in Manchester?

Nick Buckles: Well, the turn-up rate is when you have been asked to turn up and then you turn up. Our problem at the moment is shortage of staff, purely and simply, so we just do not have the staff to turn up at the moment.

Q92 Mr Clappison: This is as and when the need for staff arises at the Olympic venues and places where athletes are staying when the need comes on tap?

Nick Buckles: Yes.

Q93 Mr Clappison: It is possible there may be more problems in the future then, as and when the need for security arises. On the basis of what has happened, staff may simply not turn up.

Nick Buckles: As I say, it is not a case of them not turning up; it is a case of not being there.

Q94 Mr Clappison: Well, not being there, whichever way. There is this possibility; very possible, by the look of things.

Nick Buckles: Since we have had this problem, we have been working very closely with the military and the police-

Q95 Chair: Mr Buckles, if you could answer Mr Clappison’s question. He does not want to know who you are working with. He asked you a specific question: is there going to be a problem with people turning up on the first day of the Olympics? He has given you examples. Even today, G4S staff did not turn up for a cycling event, so the police had to be called. Yesterday, in Manchester. Just answer Mr Clappison’s question, or are you telling us that everyone is going to turn up on the first day?

Nick Buckles: I think what we have-

Chair: We do not want to know who you are working with, just answer.

Nick Buckles: Okay. We have a significant manpower shortage against the plan at the moment. We have admitted that, we said that last week, and then clearly that shortage is going to manifest itself from this day forward to the Games, and that is why we had to have support from the military.

Q96 Chair: Yes. So his question is should you have more support as a contingency, because over the last few days, since Thursday, your staff are not turning up. Should we have more people on standby? That is his question. It is quite simple.

Nick Buckles: Okay. I do not believe so at the moment. We believe we can cover all venues with support from the police and the military.

Q97 Mr Clappison: What has changed in the last few days to enable you to make that statement, when we have seen the problems that we have seen?

Nick Buckles: Purely that we are working together with the police and the military to solve the problem.

Q98 Mr Clappison: On the basis of what we have seen so far, you would agree it is still possible that there will be further problems in the future with staff not turning up at hotels or venues as the need arises for them to do so.

Nick Buckles: We need to manage that situation very carefully on a day-to-day basis.

Q99 Chair: Yes, but that is not really an answer. You cannot give Mr Clappison the assurance he seeks that you, as the Chief Executive of this company, knows that everyone is going to turn up to the venues. You cannot, can you?

Nick Buckles: I cannot.

Chair: No. You cannot give us that assurance.

Q100 Mr Clappison: You are contracted to provide 10,400 guards. As we speak here, do you know how many you will actually provide?

Nick Buckles: It is a moving target in terms of what we believe we can do. At the moment, we have 4,200 people working on the ground. Our expectation is the minimum that we will deliver is 7,000 on the ground.

Q101 Mr Clappison: This is by way of comment, really, but I give you the chance to respond to it. Do you think that members of the public would be surprised that 10 days before the Olympic Games, which you had a hand in planning for since an early stage, and for which you entered into a very important contract last December, you are not able to give a better answer than that?

Nick Buckles: I can only agree with that.

Q102 Mr Clappison: Can I just ask you one other thing? You know a Mr Mark Hamilton, I think.

Nick Buckles: Yes.

Q103 Mr Clappison: In an internal memo from him on 29 June, he talked about your policy of, "Just in time phasing." It was said in this memo from him, which must have been shortly before you became aware of the problems, and I quote from it, "It would have been an advantage to have everyone trained months in advance, but this was neither practical nor cost-effective." Can you explain that, please?

Q104 Chair: Before you do, could you just tell us who this gentleman is, because the rest of the Committee need to know.

Nick Buckles: Yes, Mark Hamilton is the MD of the Olympics contract.

Q105 Chair: Right. So where does he fit in with Mr Horseman-Sewell and Mr David Taylor-Smith? You seem to have a lot of managing directors around.

Nick Buckles: We do. In the UK, the CEO is David Taylor-Smith, the MD of the UK security businesses, because we have care and justice and other businesses-

Q106 Chair: Yes, but this gentleman, just tell us where he fits in. We do not need the whole structure.

Nick Buckles: Doug Hewitson and then Mark Hamilton.

Chair: Right, okay.

Nick Buckles: So what he is alluding to is in a perfect world, the contract should have been drawn up so that we had all the people on board with months to go fully trained, because that is the ideal situation to be in. The contract we signed was that you get paid for people on the day they turn up and you get paid for training then basically.

Q107 Mr Clappison: But this was 29 June, which is the date of this memo from Mr Hamilton, who is described as the Head of Olympic Security. It was very close to you becoming aware that there was a significant problem, and he is going on here as though there is no problem.

Nick Buckles: I thought you said he said there was a problem.

Q108 Mr Clappison: No, he talked about "Just in time phasing". He said, "It would have been an advantage to have everyone trained months in advance, but this was neither practical nor cost-effective". Would you understand if a member of the public drew a connection between your just in time phasing policy and the problems we are seeing now?

Nick Buckles: I agree.

Chair: Thank you. We will continue with contracts and the shortfall. Mr Michael.

Q109 Alun Michael: The contract going wrong is one thing, but I want to look at aspects of your underlying business model and the experiences of people you are employing, because I have to say that it looks a bit like exploitation compounded by bad management. Examples: no pay for 12 days of training unless you are employed for five sessions of work. That is not about whether people turn up, but at the whim of G4S. People who have not received contracts so they do not know if they will have work, an ex-policeman saying, "They could not tell me if I was wanted, so I had to get other work"; a student, "You’ll have to pay back the costs of training and the licence". A contract that says you have to pay back the uniform costs, a figure not specified, and I quote, "At the absolute discretion of the company". A mother spending 84 minutes on the phone, "To find out if my son had to attend one bit of training and then they couldn’t tell me". This does not sound like a caring and well-managed organisation, does it?

Nick Buckles: I think the contract and the way we pay people is the contract that we agreed with LOCOG. It is no excuse, but that is the contract. So they know-

Q110 Alun Michael: No, but I am asking you about the way you run your company and the way you treat the people you employ.

Nick Buckles: I mean, we have talked about it. We have 660,000 employees. We treat people generally very well. I think this contract has been a unique challenge in marrying up-you know, getting a very major workforce together in a short period of time. It has been a challenge.

Q111 Alun Michael: But don’t people get lost in this? I mean, this morning my colleague, David Blunkett, was telling me about core organisation for communications and lack of humanity in G4S’ work with asylum seekers in Sheffield. There seems to be a bit of a pattern here. Is this the basis of your company?

Nick Buckles: No, we have done some excellent work over the years for Government.

Q112 Alun Michael: Are you sure that it feels excellent to the people who are expecting a service and the people who are employed in it?

Nick Buckles: Yes, I do. I think that our UK staff turnover is very low. We have a very loyal, committed workforce throughout the world, but particularly in the UK, and we have very strong contract retention and good relations with customers.

Q113 Alun Michael: I have illustrated the fact that there is a belief that these are not problems just in the current contract, but all those examples that have been quoted-and there are many, many more in the press and the media, where people are saying they could not find out whether they were going to have work, the recovery of money and things like that-it does not sound a very kind way of managing people, does it?

Nick Buckles: The communication problem will be part of the review, but certainly this is a very unique contract, to communicate with 100,000 applicants and tell them where they are in the process. It is no excuse.

Q114 Alun Michael: So it is part of the problem, that you were so depending on exploiting people and paying the minimum that that is why the organisation has gone wrong?

Nick Buckles: The pay rate is part of the contract again. That is agreed in the contract. We have to agree that with our customer. The way that it is structured between training and service delivery is as well, so it is very-

Q115 Alun Michael: With the greatest respect, this is what you bid though, isn’t it?

Nick Buckles: It is, yes, and we have agreed the contract. I have said that, it is our contract. We have to deliver it.

Q116 Alun Michael: So did you win the contract on the basis of a lack of consideration for the people you were going to train and employ?

Nick Buckles: No. We believed that is the right way to run this event.

Q117 Alun Michael: It does not look like it now, does it?

Nick Buckles: It does not, no. I agree.

Q118 Bridget Phillipson: Mr Buckles, did you consider that in the current climate, you might find it difficult to recruit people with the necessary skills for this kind of temporary work, that they might be reluctant to leave permanent jobs to take up very time-limited work?

Nick Buckles: It is very unlikely that our staff would have come from permanent jobs. The pool that we were looking for were unemployed people, students and some people who did want to work on the Olympics just for their vacation, basically. It is a fairly limited pool, so we certainly would not have expected to bring staff in from permanent positions, basically.

Q119 Bridget Phillipson: But you were trying to poach staff in permanent jobs who worked for other organisations. Is that not true?

Nick Buckles: I would not have thought so, but I cannot categorically state that.

Q120 Bridget Phillipson: What is the hourly rate of pay for the security staff you were intending to employ?

Nick Buckles: The hourly rate in the contract is £8.50 an hour.

Q121 Bridget Phillipson: Were staff paid for training?

Nick Buckles: They will be if they come to work.

Q122 Bridget Phillipson: Okay. Were applicants ever offered a higher rate of pay, or was it ever suggested to applicants that they might receive a higher rate of pay only for them to then be told that it was that £8.50 figure?

Nick Buckles: I am not aware of that. I certainly have not heard that. I do not know if Ian-

Ian Horseman-Sewell: No. The only addition I would make is that we have recently announced, following agreement from our client, that the staff will receive a completion bonus, so those staff who work with us all the way through right to the end of it.

Q123 Bridget Phillipson: When you met on a weekly basis when you provided those updates you referred to earlier, at those meetings, did you provide figures about the numbers of staff that you have so far been able to recruit and your projections?

Nick Buckles: We did. That was exactly the information in the document.

Q124 Bridget Phillipson: So the Home Office and others were aware right throughout the process of your ability so far to recruit the necessary numbers?

Nick Buckles: Yes.

Q125 Bridget Phillipson: Northumbria police in the north-east, as you will be aware, have been forced to step in where there has been the shortfall that Mr Clappison referred to earlier. Will they be reimbursed in full for the costs of officer time associated with that?

Nick Buckles: Yes.

Q126 Bridget Phillipson: Will that go directly to Northumbria police or will that be through the Home Office?

Nick Buckles: I am not sure of the method of pushing that through.

Chair: Sorry, could you repeat that question and the answer?

Nick Buckles: Yes, sorry.

Chair: Ms Phillipson?

Bridget Phillipson: Will the money to be reimbursed for officer time go directly to the police force concerned, in this case Northumbria, or will it be via the Home Office?

Nick Buckles: I am not sure of the route to the end customer or the end supplier. It will be either direct or through the Home Office.

Q127 Chair: So you are confirming today that where G4S staff do not turn up, as they did not in Manchester yesterday, and for the cycling event today and Coventry the day before, that you will reimburse the police for all their costs?

Nick Buckles: Yes.

Chair: Thank you.

Q128 Nicola Blackwood: I would just like to take you back to the contract. You mentioned in answer to Lorraine Fullbrook that on signing the initial contract for the provision of 2,000 security officers, you went through a process of due diligence and that you were confident that you could fulfil that contract, because you routinely provided that number of officers. When you decided to sign a contract for an upsurge to 10,400, can you describe the process that you went through for due diligence for that and how you convinced LOCOG that you were going to be able to deliver on that contract?

Ian Horseman-Sewell: Absolutely. In reality, what happened was that having established a larger requirement for a security workforce, LOCOG came to us, I think in August last year, and asked us to have a look at how much of that larger workforce we could provide. We dedicated 30 project managers to a piece of work which initially was called Project 21K, because initially the requirement was 21,000 people rather than 24,000 people, and we went away and did that piece of work and we came back with an assessment that in the time remaining, there was a way that we could provide 12,000 people, and we put that proposal to our client.

Q129 Nicola Blackwood: Was that work theoretical or did you have actual practical examples of previous events where you had delivered that number of individuals?

Ian Horseman-Sewell: That work was based on our experience over the year to date, looking at all sorts of recruitment sources, including things like Jobcentre Plus, combined with our experience of running events in the United Kingdom over many years.

Q130 Nicola Blackwood: I am asking had you ever delivered 10,400-

Ian Horseman-Sewell: No.

Q131 Nicola Blackwood: So you could not provide concrete examples of when you had delivered a similar scale of project?

Ian Horseman-Sewell: I think it is really important to be clear that the scale of operation that we were being asked to provide and agreed to provide under the contract has not been deployed previously.

Nick Buckles: It is an unprecedented contract in terms of delivering security staff.

Q132 Chair: We understand that, because the Olympics only come round very occasionally to the United Kingdom. We understand it was a big contract, but what I think Ms Blackwood is trying to elicit from you is a response to should you have signed that contract in the first place, because it was a big contract to deliver. They asked for additional people last year and the timescale was very short. Do you regret signing the contract saying you would agree to provide these people? Mr Buckles.

Nick Buckles: Clearly we regret signing the contract, but now we have to get on and deliver it.

Chair: Yes, thank you.

Q133 Mr Winnick: I wonder, Mr Buckles, how far consideration was given within the company to signing the contract, particularly the one that was signed in December last year with provision for over 10,000 guards. Are you telling the Committee that real, serious consideration was given to whether the company could deliver before that contract was signed, or was it so lucrative that you decided it was such a marvellous contract you would sign?

Nick Buckles: No, very careful consideration went in from the team in the UK looking at this contract. As Ian said, there were a number of workstreams to see if they could deliver it. It was signed later on than we would have liked, but we still signed the contract, and it is not a question of being lucrative. As I said earlier, we did this purely because we wanted to have a successful security operation at the Olympics. It is not particularly financially lucrative for us. It was much more about, ironically, reputation and building reputation for the future.

Mr Winnick: Yes. We will come to the future in a moment, but as regards personnel, we have received a letter from a father of a student, a 21-year-old lad who was interviewed, offered and accepted an Olympic security role. He was very pleased about this, in order to do some temporary work. The son passed vetting, then apparently there was no contact whatever regarding the necessary training, all emails were unanswered and as regards the helpline-you have some kind of helpline-he was simply told: "We are told that all applicants will be contacted shortly with their training schedule". He has not heard anything whatsoever, and the father says there are hundreds if not thousands in a similar situation, as the social media campaigns will testify.

Chair: Mr Buckles.

Nick Buckles: Mr Winnick, I cannot comment on that specific, but I certainly can-

Q134 Chair: You can comment on the general point that we have all had emails from people saying, "We applied. We waited". I had an email from someone in Portugal who has just been contacted to say, "Start work in ten days’ time". No contact for six months. You know the point here. Do not comment on individual cases, but your system is going wrong.

Nick Buckles: One hundred thousand people applied. Keeping them tracked all the way through has clearly been a challenge.

Chair: Thank you.

Q135 Mr Winnick: If I can just say this-

Chair: Finally, Mr Winnick.

Mr Winnick: Yes, indeed. Mr Buckles, there has been a lot of comment in the press prior to this fiasco that your company is involved in trying to get contracts with police, in taking over various police functions. Do you accept that as a result of what has happened there would be, to say the least, a great deal of apprehension among ordinary people that your company should take over functions now being carried out by the police? That is about the last thing they would want, wouldn’t they?

Nick Buckles: We do about £600 million a year-

Chair: Yes, we will come on to your future contracts later. If you can just give a quick answer, then we will come on to that in a minute.

Nick Buckles: I think that we do a very good job in supporting police-force back offices, and I think we can continue to do so.

Chair: Yes. We will come on to that in a minute. Mark Reckless. We are on contracts, gentlemen and ladies.

Q136 Mark Reckless: I have also received an email which I would like to read to you. You said you do not want to comment on a specific case, but perhaps you would let me know if it gives us a general insight into what went wrong with your organisation: "I am a student who was offered the seemingly brilliant opportunity to work at the London 2012 Olympics as steward security through Bridging the Gap and G4S. We gave up our half term to attend training and took five exams to gain our qualification, plus attended a three-hour interview and further training. This was in February/March. Since then we have heard basically nothing, with the exception of a few phone calls and unhelpful emails. They have been impossible to get hold of or contact via phone or email. We were supposed to receive onsite training and venue discussion, possible accommodation and uniform and pass collection by now, but again, have heard nothing".

Chair: Mr Buckles.

Nick Buckles: I mean, I need to look at the particular case, but overall this will be part of our review that we do.

Q137 Mark Reckless: But Mr Buckles, surely that does not just reflect the particular case. Each time we hear of these venues where a certain number of your staff are meant to turn up and perhaps a quarter or at best a third of them show up, or sometimes none at all, isn’t the most likely reason that although you went through a recruitment process towards the beginning of the year, you then have not followed up or actively managed those people at all between then and now?

Nick Buckles: I think that there will be instances of that and I cannot deny it, so that is part of the review we are going to do.

Q138 Mark Reckless: But to the extent that vast proportions of people are not turning up, surely it is more than an isolated instance. Isn’t the main problem that you have not actively managed people or communicated with them properly between recruiting them and expecting them to turn up to a venue?

Nick Buckles: It could be.

Q139 Chair: It could be or it is? You are beginning to sound very vague here. We would like specific answers.

Nick Buckles: It clearly is in a number of occasions-

Chair: It is?

Nick Buckles: I just do not know how many.

Chair: No.

Q140 Mark Reckless: May that be indicative of a more general management problem within your whole organisation?

Nick Buckles: I think the database and getting hold of people and running then the process, answering queries has been a challenge.

Q141 Mark Reckless: Would you recommend the UK Government or other potential clients to continue to take up your services in light of what you have done in respect of this one?

Nick Buckles: It is a completely different contract. It was incredibly logistically challenging. All our other contracts start at a point in time, we take on the people or recruit the people and they run for five to seven years: completely different challenge and a completely different way of operating.

Q142 Mark Reckless: I do not see how that is a different challenge. Here you are recruiting people, it appears, at the beginning of the year, yet you then expect them to turn up at venues towards the end of July and you fail to communicate with them or manage them between the point at which you recruited them and when you expect them to do something for you. Isn’t that a problem that would also be applicable to other contracts and your organisation generally?

Nick Buckles: No. This is a very unique contract. Typically we recruit people with a start date, we train them, they start. There is not a five-month gap-it is very, very rare-or a four-month gap.

Q143 Mark Reckless: You just said there was a seven-year process before.

Nick Buckles: No, I am saying the contracts run for seven years, so you sign somebody up and they stay. It is a completely different operating model. It is just a normal employment model. Typically we recruit people, we train them, they start work, they stay with us.

Q144 Mark Reckless: Okay. So clients should still potentially come to you if it is a seven-year event that they want you to employ someone for, but it if is an event in a point of time, then your processes are not suitable for managing those?

Nick Buckles: I would agree with that.

Q145 Chair: Mr Buckles, just repeating that this is a very unique contract, which were your words, does not give this Committee satisfaction. We know it was, everybody does, because the Olympics do not happen very often in London. Shouldn’t you have been better at monitoring the situation rather than, as Mr Reckless had done, leave things as they are? You have a lot of managing directors, haven’t you?

Nick Buckles: Yes. The command chain, I would have expected them to run that process, manage the process very effectively. There are three levels between me and the contract, and they should be bringing issues to me as and when they arise.

Q146 Chair: They didn’t?

Nick Buckles: They did not.

Chair: Thank you.

Q147 Dr Huppert: I have to say, it sounds from your previous comments that people should be very wary about hiring you for contracts at the very beginning as to whether staff will turn up.

Can I turn to Mr Clappison’s questions, because you are drawing a very fine line between whether people were rostered to show up and then showed up, as opposed to the number that you had originally promised to deliver. You were suggesting, I think, that of those who were supposed to show up, 90% or so did, it was just that you were not finding enough people. So can we be clear then that, for example, for the Box Hill cycling event this morning, where there were supposed to be 200 staff and only 30 showed up, you had only rostered about 35 staff or so? Is that what you are saying?

Nick Buckles: Yes.

Q148 Dr Huppert: When did you inform other partner organisations, the police, and LOCOG, that you had completely failed to roster the vast majority of people that were needed for an event this morning?

Nick Buckles: The daily meetings highlight where we are going to have shortfalls.

Q149 Dr Huppert: So you are rostering on a daily basis and you do not know until a day in advance-

Nick Buckles: No, we are going forward, so we are planning now further ahead. We have only really started to get this in action in the last 48 hours.

Q150 Dr Huppert: Because you have this wonderful luxury that the police and the Army will step in to cover for you, which is an amazing form of underwriting insurance that you are very fortunate to have in this contract, and we will come on to the costs of that, I think, later. But you are only able to tell them on very short timescales whether they need to suddenly have 160, 170 extra police officers or military staff suddenly going to Box Hill to cover for an event?

Nick Buckles: Going forward, we will give them much more notice, and that is where we are at the moment.

Q151 Dr Huppert: How much notice do you think you will be able to give once the Olympics are underway?

Nick Buckles: Three to five days.

Q152 Dr Huppert: So you will be able to give three or five days’ notice, so the police will know exactly how many people they have to drag from their normal duties in order to cover for you? I just want to, you were very-

Chair: Sorry, is that three to four days’ notice?

Nick Buckles: That is my expectation.

Chair: Right.

Q153 Dr Huppert: You were very clear with my colleague, Bridget Phillipson, that you will be repaying the costs to the police. Does the same apply to all the military costs that are involved?

Nick Buckles: Yes.

Q154 Dr Huppert: Will you also be covering the costs of the activities that the police or indeed the military would have been doing otherwise? I mean, police have enough other tasks. They are not normally hanging around saying they have very little to do. Will you somehow be recompensing them for the frontline policing or the public indeed for the work that they would have expected the police to be doing?

Nick Buckles: No, I do not. No, we are not. For the direct cost of them working on our contract, that is what we are paying for, their cost.

Q155 Dr Huppert: Will you, as well as paying for their costs, be claiming the full value of the contract as well, or are you taking a reduction in the amount of money you take as well as paying more money out?

Nick Buckles: We have not gone into the full details of how that £50 million loss on the contract is going to occur, so we have not gone through line by line and said, "We are not going to charge this. We are going to charge that". That is our estimate of how much it is going to cost us on the current basis.

Q156 Dr Huppert: But there are two elements of cost. One is money that you pay out to cover for the police having to come in and the other is money that you do not take from LOCOG for failing to do what you were supposed to do. What is your estimate of how much you will be paying out and how much you will not be claiming?

Nick Buckles: In terms of what we will not be claiming is the shifts that we will not be able to cover.

Q157 Dr Huppert: So for those shifts, you will not be claiming, and you will be paying the police to cover it?

Nick Buckles: To be honest, I have not thought that through.

Q158 Chair: Mr Buckles, you have just told this Committee earlier on that you would recompense the police-

Nick Buckles: We will do.

Chair: Yes, you do know about it.

Nick Buckles: I have said that.

Q159 Chair: Yes, exactly. So the answer to Dr Huppert’s question is that you will not claim the money to pay the people and you will also pay the police.

Ian Horseman-Sewell: Perhaps I could help, Mr Chairman.

Chair: I think you may need to.

Ian Horseman-Sewell: In addition to the undertaking that we have given to recompense the police and the military, which I think Nick has been very clear about, our contractual arrangements with our client mean that in the event that we do not provide staff that were otherwise required, first of all, we clearly do not charge the rate that we would have charged had they turned up. Second, we pay penalties against some key performance indicators, and thirdly, there is an element of our management fee that is retained. So we will be paying significant penalties to the client.

Q160 Dr Huppert: So let us be very clear: for a shift that you failed to cover, you will not be collecting the payment for that, you will be taking a penalty for not covering it; you will be losing some of the management costs for it and you will be paying the police to cover it?

Ian Horseman-Sewell: That is exactly correct.

Q161 Chair: Excellent. What I cannot understand is why you do not just waive the whole fee on this contract. Bearing in mind what has happened, why are you claiming any money at all?

Nick Buckles: Because we have had management in place for two years to plan the contract and we will have management on venues to help run the venues.

Q162 Chair: We understand that, but clearly what was going to be your profit? You talk about loss now, and you said, I think it was to Sky Television, £30 million to £50 million. It is quite a big gap between £30 million and £50 million.

Nick Buckles: Yes.

Chair: What was your profit on the original contract?

Nick Buckles: £10 million.

Q163 Chair: So that profit has gone?

Nick Buckles: Correct.

Q164 Chair: So bearing in mind all these changes, are you still going to claim your management fee at all?

Nick Buckles: Yes.

Q165 Chair: Why? You have not managed.

Nick Buckles: Because we have managed the contract and will have management on the ground.

Q166 Chair: But even after all that has happened, you still wish to claim the management fee?

Nick Buckles: Yes.

Q167 Chair: How much is it?

Nick Buckles: I do not know.

Q168 Chair: Well, how do you know you want to claim it then?

Nick Buckles: In principle, it is part of the contract that we have been providing for the last 18 months.

Q169 Chair: Yes, but if you do not know what the management fee is, why do you want to claim it? You have told us what the profit was-£10 million.

Nick Buckles: Yes.

Q170 Chair: So what is the management fee?

Ian Horseman-Sewell: The total management fee on the current budgets with our client is in the order of £57 million.

Chair: £57 million is your fee? You still think you ought to claim it?

Nick Buckles: Yes.

Chair: Even after all that has happened?

Nick Buckles: We still expect to deliver a significant number of staff for the Olympics.

Chair: I find that astonishing.

Q171 Mr Clappison: This is following on from a question that Dr Huppert was asking you. As we sit here now about 10 days or so before the Olympics start, can you give us any estimate, any rough estimate, of how many police officers or other security personnel will be required to do the job that you contracted to do?

Nick Buckles: What I have said earlier is that we still expect to deliver at least 7,000 staff. The military have already committed to 3,500.

Mr Clappison: We know this, but what I am asking for is if you have any estimate of how many police officers will be asked to do the job that you are supposed to do.

Nick Buckles: No, I have not.

Mr Clappison: No figure at all?

Nick Buckles: No.

Q172 Mr Clappison: When will individual police forces find out? How much notice will they get that they have to deploy extra officers?

Nick Buckles: That is something I would have to take back to the OSB to discuss. I do not know the answer to that.

Chair: Thank you.

Q173 Mr Clappison: When will that happen?

Nick Buckles: On a daily basis.

Chair: Okay, Mr Clappison? Yes, thank you. Lorraine Fullbrook and then Michael Ellis.

Q174 Lorraine Fullbrook: Thank you, Chairman. I am astounded that we are days from the Olympics and you do not know very much-I am really astounded. I just want to check, when you say that you are going to pay the police, you are going to pay the actual police costs, because police do not work for £8.50 an hour.

Nick Buckles: Correct.

Q175 Lorraine Fullbrook: So you are not paying them £8.50 an hour?

Nick Buckles: Of course not.

Q176 Lorraine Fullbrook: Are you paying for the additional military that have had to be brought in?

Nick Buckles: Yes, we are.

Q177 Lorraine Fullbrook: You are paying all their costs?

Nick Buckles: Yes.

Q178 Lorraine Fullbrook: Are you paying for accommodation for those people?

Nick Buckles: Yes.

Lorraine Fullbrook: You are? You are paying their accommodation?

Nick Buckles: Yes.

Q179 Chair: Is that a decision you are making now or do you know this, because you paused?

Nick Buckles: I am trying to remember.

Q180 Chair: Because we are going to hold you to everything you have said.

Nick Buckles: I realise that.

Chair: This is a Select Committee of the House.

Nick Buckles: I realise that.

Q181 Chair: Yes. So you are paying for all the accommodation costs of the military?

Nick Buckles: Yes.

Q182 Lorraine Fullbrook: What about the police?

Nick Buckles: I do not believe they have any, but yes, we would if they had to.

Q183 Lorraine Fullbrook: What about bonuses to the police and to the military? Are you going to pay those?

Nick Buckles: We are very willing to consider anything that the military think is appropriate.

Q184 Lorraine Fullbrook: Don’t you think if you-

Nick Buckles: It is appropriate, what I am saying.

Lorraine Fullbrook: -if you contract to deliver a service, and this is a big service, and that you do not deliver that contract, first of all, I do not think you should be claiming a management fee, I think that is just incredible, but you also have to pay for your cock-up.

Nick Buckles: Yes, which we are.

Q185 Lorraine Fullbrook: Are you going to give the police and the military a bonus?

Nick Buckles: Very happy to. It is a question of sitting down and asking what is appropriate.

Q186 Chair: So you will consider a bonus; they have to tell you a figure?

Nick Buckles: It is simplistically who do you pay the bonus to and for what reason.

Lorraine Fullbrook: To the individuals.

Q187 Chair: All right, but you are happy in principle to pay. So in answer to Lorraine Fullbrook, you will pay the-

Lorraine Fullbrook: The individuals.

Chair: -police and military a bonus, depending on what-

Lorraine Fullbrook: To the individual police and military personnel.

Nick Buckles: Particularly the military personnel who have had to come off leave and work on the Olympics.

Q188 Lorraine Fullbrook: The police have had to come in very quickly to cover your not turning up in the last few days, and I am amazed that you knew about this on 3 July and you do not seem to have got your act together to even cover for day one and two of teams coming in. So you have no contingency people; you have no contingency. What are your monitoring systems now? Do you have people who can cover?

Nick Buckles: No, that is what I am saying. We are where we are with our staffing level.

Q189 Lorraine Fullbrook: Okay. So what systems are you putting in place to monitor this?

Nick Buckles: Daily reports on where we can and cannot cover, and just following the schedule.

Q190 Lorraine Fullbrook: How will you know that? Did you know today?

Chair: So the answer to Mrs Fullbrook, do you know today how many G4S staff did not turn up to all the venues? When will you know by-what time?

Nick Buckles: Later on this evening.

Q191 Chair: So this evening you will know how many people did not turn up for work at 9.00am?

Lorraine Fullbrook: Did not turn up this morning.

Nick Buckles: Well, we will know straight away at 9.00am if they have not turned up.

Chair: But you as the Chief Executive-Mrs Fullbrook is talking about monitoring-we know how big your organisation is, but you will not know until this evening who has not turned up for work at 9.00am, so you did not know about the cycling event that was not covered by G4S?

Ian Horseman-Sewell: If I can help, Mr Chairman.

Q192 Lorraine Fullbrook: So tell us what is the system in place that at 9.00pm tonight when you know somebody has not turned up, what do you do?

Nick Buckles: Basically we have a full-time team working at Canary Wharf, which I have been working on for the last eight days as well, and we get all that information on an hour by hour basis. I am part of the team that is trying to address this problem.

Q193 Lorraine Fullbrook: Are there people trying to get people there-

Nick Buckles: Yes.

Lorraine Fullbrook: -whom you have already accredited?

Nick Buckles: Yes.

Q194 Lorraine Fullbrook: So tell me how they are doing that. Explain to us how they are doing that. It is very vague. Yes, yes, you told Mr Clappison it was three to five days to get the information to the police about when they would have to cover.

Nick Buckles: We are scheduling everybody in advance so we know where they are going to be going and so we know where we have gaps in terms of manpower requirements.

Chair: Thank you.

Q195 Michael Ellis: Mr Buckles, I want to make sure we have this absolutely clear. If the Armed Forces will accept the principle of bonus payments and they will say to whom bonus payments should be paid, your company will make such payments?

Nick Buckles: Yes.

Q196 Michael Ellis: You do not expect the Government to make any payments in that regard; do you accept responsibility for what has gone wrong here?

Nick Buckles: Yes.

Q197 Michael Ellis: Now, for how long has your company been doing large-scale Government contracts?

Nick Buckles: Twenty years.

Q198 Michael Ellis: Right, and when did the pre-contract negotiations start as far as this contract is concerned? Do you know that?

Ian Horseman-Sewell: Pre-contract negotiations I would say started in the autumn of 2009.

Michael Ellis: The autumn of 2009?

Ian Horseman-Sewell: That would be the tendering process and so forth.

Q199 Michael Ellis: The tendering process. You signed in December of 2010, is that right?

Ian Horseman-Sewell: Correct, yes.

Q200 Michael Ellis: But the process began in the autumn of 2009, approximately?

Ian Horseman-Sewell: We started preparing for tendering in autumn 2009, yes.

Q201 Michael Ellis: So as far as the contract terms are concerned, clearly this is not an issue that is the responsibility of the staff you are paying £8 an hour to go and do the job. This is the responsibility of the management of your company. You accept that. Now, you just told one of my colleagues that you were still expecting to deliver thousands of staff in 10 days’ time. Have you noticed a further shortfall in the last week of staff turning up for work?

Nick Buckles: No.

Michael Ellis: You haven’t?

Nick Buckles: No.

Q202 Michael Ellis: So do you feel that the staff who are currently engaged to work on the Olympics and whom you are expecting in their thousands to turn up in 10 days’ time should have proper incentives, for example, by way of a completion bonus not only to turn up, but stay turning up through each day of the Olympiad until it is finished?

Nick Buckles: Yes, we have that in place now.

Michael Ellis: You have that in place now?

Nick Buckles: Yes.

Q203 Michael Ellis: When did you put that in place?

Nick Buckles: About a week ago.

Q204 Michael Ellis: I see. So that was as a result of the problems that you knew were coming about?

Nick Buckles: No, there was always a plan to have a completion bonus. It was just a question of how we built it, basically.

Q205 Michael Ellis: What is the completion bonus?

Nick Buckles: It is a pound an hour for every hour worked during the Olympics.

Q206 Michael Ellis: A pound an hour?

Nick Buckles: For every hour worked, incremental to the wage.

Q207 Michael Ellis: So you are offering your employees that incentive to not only come to work but stay coming until they are no longer required?

Nick Buckles: Correct.

Q208 Michael Ellis: Do you think in view of the circumstances that that is a sufficient sum to so incentivise those people?

Nick Buckles: Yes.

Chair: Thank you. Nicola Blackwood and then Bridget Phillipson.

Michael Ellis: I just want to ask one further question, if I may.

Chair: Yes, of course.

Michael Ellis: Because as far as incentives are concerned, are you satisfied, Mr Buckles and Mr Horseman-Sewell, that you know what is going on in your own company? Mr Buckles, I notice that you said to the media a day or two ago that you were not even sure whether all your staff could speak English. I am just wondering whether you are satisfied that the terms of your contract, which will require you to provide-either in implied or express terms of the contract-competent people who can do the job, are you satisfied that you know those staff are competent and that you are aware of what is happening?

Nick Buckles: Yes. The question I had was, "Do they speak fluent English?" and that was a question I did not know how to answer because I did not know what fluent English was, so basically the SIA training course means you have to speak English to pass the course, so that is a fact.

Q209 Chair: What do you think fluent English is?

Nick Buckles: I do not know.

Q210 Chair: So what we have been speaking today at this Committee, do you think that is fluent English?

Nick Buckles: I do not know. As I say, I do not know what the-

Chair: You do not know whether we have been speaking fluent English today?

Nick Buckles: Well, I believe I have.

Q211 Michael Ellis: Well, you are now satisfied that they can speak fluent English, is that what you are saying?

Nick Buckles: Yes.

Mr Winnick: Fluent English is what we are speaking at the moment. It is quite simple.

Chair: Anyway, order, order. Could I have Nicola Blackwood, please? In English preferably, Ms Blackwood.

Q212 Nicola Blackwood: Yes, thank you, Mr Chairman. I do believe that the level of English required for your staff is defined within your contract, as I think Mr Horseman-Sewell could probably have told you, and I also have to say that I do think that the performance today will lead quite a lot of people to despair, because I think that most of us had very little confidence in G4S’s ability to fulfil this contract before this session started, and now I do not think we have any at all. What I do not understand is that G4S has 650,000 employees worldwide. Why, when it became evident that you were not going to be able to provide 10,400, could you not transfer some staff to cover for the relatively short period of the Olympiad?

Nick Buckles: We are looking at that, but the challenge is they have to be SIA licensed to work. They have to have the SIA door supervisory licence, which is a different skill from most of our workforce, and they have to be able to work in the UK, basically.

Q213 Nicola Blackwood: Well, how many employees do you have in the UK?

Nick Buckles: Forty thousand.

Q214 Nicola Blackwood: How many of those are SIA licensed?

Nick Buckles: SIA door supervisory licensed, not that many.

Nicola Blackwood: Well, how many?

Nick Buckles: About 1,000.

Q215 Nicola Blackwood: One thousand. How many of those have you looked at transferring?

Nick Buckles: All of them.

Nicola Blackwood: All of them?

Nick Buckles: Yes.

Q216 Nicola Blackwood: How many of those have been told can only be transferred if they take annual leave for the Olympic period?

Nick Buckles: I do not know the answer to that, I am afraid. I can get back to you on it.

Nicola Blackwood: Okay, thank you very much.

Q217 Bridget Phillipson: Why are you waiting for the Government to tell you what to do in terms of bonuses for our servicemen and women? Why are you waiting for them to tell you what action you should take?

Nick Buckles: Because I am not sure if they feel it is appropriate to pay some and not others and what is the criteria. That is all we are saying, just to understand the criteria. It may even be a donation to charity instead. I just do not know what is the right answer.

Q218 Bridget Phillipson: I get the impression this afternoon that you are kind of making it up as you go along, so on that understanding, could I just suggest perhaps that you consider offering the same £500 bonus that tube drivers and bus drivers are being offered to work during the Olympics to our servicemen and women?

Nick Buckles: I can, certainly.

Q219 Chair: Thank you. Let us now turn to the theme of remedies. Many members of the Committee have already covered this, but just for the record, we want to be very clear. In answer to James Clappison, I think you were saying that you could not be absolutely certain that everyone that you had contracted to provide would be there on the day of the opening of the Olympics. Is that right?

Nick Buckles: Yes.

Chair: Because you can’t be sure?

Nick Buckles: Yes.

Q220 Chair: So you are telling this Committee now that you do not know how many G4S staff will be there on the first day of the Olympics?

Nick Buckles: Which is the reason we raised the flag a week ago.

Chair: Yes, but since then, the Home Secretary has been before the House; the Secretary of State for Defence is obviously dealing with this on a daily basis; the whole of Government is churning around this issue, and they have said they provided 3,500 additional staff.

Nick Buckles: Yes.

Q221 Chair: But you are now telling us clearly that you cannot guarantee how many would turn up on the day because on a number of the other occasions, including today-but you will hear about this at 9.00pm tonight when you get your report-G4S staff simply did not turn up. To go back to this famous cycling event, 300 were expected, but only 30 turned up. If you take that as an example of what might happen, we could have serious shortfalls of people on the first day of the Olympics. Is that right?

Nick Buckles: No, we are confident that we can get at least 7,000 people into the system in time for the Olympics.

Q222 Chair: So it is no or yes, because a few moments ago you said you were not confident and not satisfied?

Nick Buckles: No, I thought you were talking about the 10,000, that is why, but if you are saying without the 3,500 military, that is a different-

Chair: You are going to produce 7,000 people on the day?

Nick Buckles: That is our expectation.

Q223 Chair: Right. "Expectation" is not a comforting word when we are dealing with the greatest sporting event in the world, bearing in mind that you already have shortfalls. That is the worry of this Committee. That is why we have you in today. If 30 out of 300 turn up today for cycling, there is a worry surely in your mind that others will not turn up on the day. Unless you personally go and escort them all to the Olympic Stadium, you can’t be sure, can you?

Nick Buckles: No.

Q224 Chair: So should the Government prepare a contingency with the Metropolitan Police and the Army for the possibility of more people needing to be deployed just in case people do not turn up? We have dealt with the issue of costs, but just to be on the safe side, should they be prepared for this?

Nick Buckles: That is a decision that the Government has to make, not us.

Chair: We understand that, but would you like them to do that, because you would not like to leave venues unprotected, would you?

Nick Buckles: We still-

Chair: We know it is a decision for the Government, because they stepped in last week and made that decision.

Nick Buckles: We are still confident that we, together with the military and the police, can provide a safe and secure Olympics. We are still confident about that.

Q225 Chair: I understand that, but in terms of your own members of staff, would you like to see some just being held back in case we see a repetition of the last 10 days, and especially on opening day, of G4S staff not working? We do not expect you and Mr Horseman-Sewell and all these managing directors to be down there checking handbags. Would you like to see something kept in reserve just in case?

Nick Buckles: I believe there is a reserve already in that contingency planning.

Chair: There is? What is the reserve?

Nick Buckles: I think there are 500 military in reserve, but I would need to-

Q226 Chair: So you are telling this Committee that there are 500 extra in reserve waiting to move in in case there is a problem?

Nick Buckles: Yes.

Chair: Yes. Dr Huppert on this point, please.

Q227 Dr Huppert: Thank you. Just to understand about the numbers that you are still trying to get through, Nicola Blackwood asked whether you were looking for other people who already worked for G4S. Given how badly wrong this has gone, are you consulting other companies that work in the UK, that work in this space, and have you gone through an exhaustive list of your competitors, the people you are presumably bidding against for future contracts to ask if they could help you out of this hole?

Nick Buckles: Yes.

Q228 Dr Huppert: Have any of them offered to help?

Nick Buckles: Yes.

Q229 Dr Huppert: How many staff have you managed to acquire from that route?

Nick Buckles: The latest estimate I hear was 500.

Q230 Chair: So you have been on to Chris Hyman, you have been on to Serco and Reliance, your competitors for this contract, and they are providing staff?

Nick Buckles: Yes. Not them, but others, yes.

Q231 Chair: Others, not them? Why not them, since they almost as big as you are?

Nick Buckles: They don’t have SIA licensing in Serco’s case.

Chair: Right, but you have gone to others and they are going to help you?

Nick Buckles: Yes.

Q232 Dr Huppert: If I can just step away from you, Mr Buckles, you can have a quick breath. Mr Horseman-Sewell, I am still trying to understand exactly when you understood what was happening with this. When did you know that the problems were arising? When was your first inkling of this major problem?

Ian Horseman-Sewell: The first inkling that we had of this major problem came out of the scheduling problems that happened in the weekend of 1 July, and at the time that the problems arose, we did not know immediately that it was a scheduling problem, we just knew that it was a very unexpected shortfall in staff turning up for work.

Q233 Dr Huppert: So your first awareness was on the 1st and you made sure that Mr Buckles was told?

Ian Horseman-Sewell: We spent the intervening time between then and Mr Buckles being told trying to work out what had happened, and ascertained that it appeared to be a scheduling system-

Q234 Dr Huppert: Do you think there are any staff within G4S who should have noticed this earlier and told either of you?

Ian Horseman-Sewell: Until we do a detailed review down into all of the functional areas, I cannot answer that question.

Q235 Dr Huppert: But you will be doing that review, and will you share it with this Committee?

Ian Horseman-Sewell: Yes, absolutely.

Nick Buckles: Definitely.

Ian Horseman-Sewell: Mr Chairman, could I please just venture something on data?

Chair: Yes.

Ian Horseman-Sewell: We have talked about the cycling event as an example, and I would like to share with the Committee what is happening here. The demand placed on G4S for Box Hill today was 38 people, not 200, not 300; 38 people at 9.00am this morning.

Q236 Chair: How many turned up?

Ian Horseman-Sewell: Yesterday and the day before, as we worked through our planning, facing the shortfalls that we have now faced, we said to our partners in this now, the military and the police, that we thought we would be providing 50% of that workforce. That is what it looked like at that venue: 17 people have turned up from G4S to work today. So those are the 17 people we expected to show up. They are not no-shows, they are just people who are in our shortfall, so as we are building into this, what we are finding is when we schedule somebody for work in the cohort that we have built, they turn up. That is really important.

Q237 Chair: The figures given in the House yesterday by the Home Secretary and by other Members were correct-you are not saying they were wrong about people who didn’t turn up on Monday, in Manchester, for example?

Ian Horseman-Sewell: I think there is a confusion of people not turning up who were scheduled and accepted the task of turning up and those who are part of the shortfall. It is a really important planning-

Q238 Chair: Right. Forget the shortfall. I think what the Committee is interested in is if somebody says they are going to turn up to work in the morning, they are there. That is what we are concerned with.

Ian Horseman-Sewell: All of that analysis, which we are sharing with the military and the police, who need to be confident in that analysis, suggests that the answer is yes.

Q239 Alun Michael: Could you just clarify? With the examples of people I quoted as saying they had not been told whether they were being employed, where they were being told that money was going to recovered from them and where they have been left in uncertainty, do those come in your figures as confirmed or not confirmed?

Ian Horseman-Sewell: No. The people we are saying are confirmed are people who have gone all the way through the process and therefore not had the experience that is regrettable for those people.

Q240 Alun Michael: Why do you have an organisation that allows so many people to drop out during the course of the process?

Nick Buckles: It is back to the issue about process and communication through the way which I said we had problems with, and that is one of our key issues on recruitment.

Q241 Chair: Problems within your organisation?

Nick Buckles: With communicating with the workforce.

Chair: Yes, thank you. A quick supplementary from Lorraine Fullbrook and Nicola Blackwood.

Q242 Lorraine Fullbrook: Thank you, Chair. Can you explain specifically to the Committee what scheduling is?

Ian Horseman-Sewell: Yes, absolutely. Our scheduling system matches the demand for work that has been given to us by our client in fine detail-three people here, two people there, 10 people there-and matches that to our database of individuals who are what we call deployable. That means they have all the necessary things in place to deploy, whether that is a licence, a completed training record and so forth, and the scheduling process picks up people who have all those things and fits the particular schedule of work or a shift and assigns them to it. People then have the option to accept that work and when they accept that work, typically online, our experience over recent days since we have all deployed to surge people in to look at what has been going on is that people who accept work turn up to work.

Q243 Lorraine Fullbrook: So who are these people who haven’t been turning up then? Have they accepted work or just-

Ian Horseman-Sewell: No, no, please be clear: those people who are deemed very often in general parlance as people who have not turned up, the point here is that we were not able to schedule somebody to that work in the first place, because we have experienced a shortfall. So it isn’t that I said, "Ian Horseman-Sewell is going to turn up at Box Hill tomorrow and he didn’t turn up". There wasn’t an Ian Horseman-Sewell to go to that shift, and that is our shortfall.

Chair: Thank you.

Lorraine Fullbrook: Can I just ask-

Chair: Yes, very quickly, Mrs Fullbrook.

Q244 Lorraine Fullbrook: Are the military and police forces who are involved being directed by G4S?

Nick Buckles: No, it is a combined control meeting that we have every day to decide where to allocate resources, but it is particularly led by the military.

Q245 Nicola Blackwood: So on your scheduling system that is not working, how many deployable people do you have on there?

Nick Buckles: Five and half thousand.

Q246 Nicola Blackwood: Five and half thousand. They are all accredited-

Nick Buckles: Fully.

Nicola Blackwood: -fully accredited. What percentage of those, when they are matched to a deployment, accept that deployment?

Nick Buckles: It is about 70%.

Q247 Nicola Blackwood: 70%?

Nick Buckles: So far, but they are building up every day.

Q248 Nicola Blackwood: Okay, and how many people are being added every day to that list of deployable people?

Nick Buckles: About 500.

Q249 Nicola Blackwood: Five hundred a day? Okay. How many people fall off every day because they get another job?

Nick Buckles: We don’t know that until they don’t respond to the email, basically.

Q250 Nicola Blackwood: You have no system of working out whether someone has decided not to; there is no requirement within their contract for them to inform you if they are not going to carry on.

Nick Buckles: No, no.

Q251 Chair: Thank you. Let us move on to our final theme, which is to do with lessons to be learned. We appreciate you are going to have a review. The Committee of course is going to look at this matter when we have the Home Secretary before us, but for the record, did Home Office officials know? You mentioned Charles Farr, who chaired the Olympic Security Board, and of course Paul Deighton is the Chief Executive of LOCOG. You are telling the Committee-and I am repeating what you are saying for the record-that you only knew on the 3rd and you informed them last Wednesday, or did Home Office officials know that there was a problem before then?

Nick Buckles: They knew we had an issue with scheduling and that we were sorting it out. We had daily meetings about how we were building, how we were getting on.

Q252 Chair: Daily meetings from when, Mr Buckles?

Nick Buckles: From about the 4th or the 5th, probably about-

Q253 Chair: Oh, in July we are talking?

Nick Buckles: Yes.

Q254 Chair: But you have not seen, neither Mr Horseman-Sewell nor you, Mr Buckles, the report by Her Majesty’s Chief Inspector of Constabulary that was given to the Home Secretary and to Charles Farr in September?

Nick Buckles: No.

Q255 Chair: You have not seen the second report which was given to the Home Secretary and Home Office officials in February of this year?

Nick Buckles: No.

Q256 Chair: You have not seen the Deloitte report that you commissioned? [[Interruption.] You have seen it?

Ian Horseman-Sewell: Absolutely. The Deloitte report was a collaborative venture commissioned by LOCOG but acted on together.

Q257 Chair: Would you send us a copy, please, of the Deloitte report, because it would be very, very helpful to the Committee’s deliberations. Apart from Charles Farr, is there anyone else in the Home Office you dealt with on a regular basis?

Nick Buckles: James Brokenshire.

Chair: The Minister?

Nick Buckles: Yes.

Q258 Chair: By "regular", is this every day, every week, once a month?

Nick Buckles: Part of the review process was a weekly review process from April going onwards. I am not sure whether he was there or not. I would have to ask that question.

Chair: But there are presumably minutes of these meetings.

Ian Horseman-Sewell: Absolutely.

Chair: The Venue Security Board would have minutes of when people met.

Nick Buckles: Yes.

Q259 Chair: It was not as informal as just having a chat?

Nick Buckles: No, properly governanced.

Q260 Chair: So recommendations and action points would all be in there, is that correct?

Nick Buckles: Yes.

Ian Horseman-Sewell: That is correct.

Q261 Chair: Moving on to remedies, Mr Winnick mentioned earlier the number of public sector contracts that you have, and clearly what has happened over the last few days is going to be severely damaging to that reputation. I estimate that the number of public sector contracts that you have with the Home Office alone is just under £0.5 billion. Is that a correct figure, or do you have a better figure for me?

Nick Buckles: It is £600 million in total, so it is-

Q262 Chair: So it is more. That is just for the Home Office?

Nick Buckles: Yes.

Chair: That includes the Prison Service, the Detention Service and now the new contract you have with Lincolnshire Police Force.

Nick Buckles: Yes.

Chair: Is that right?

Nick Buckles: Yes.

Chair: Yes. Sorry, unfortunately Hansard can’t record nods, so we do have to have a yes.

Nick Buckles: Sorry, yes.

Q263 Chair: Do you not think that there is now an issue of your ability to deliver some of these contracts in view of the fact that you have not delivered on this very high-profile contract? We accept that for you this was a vanity contract. You needed to secure this contract because it would bring you more contracts in the future, but the bread and butter issue of policing is what Lincolnshire does, for example. What have you done as the Chief Executive to make sure that these contracts are properly looked at and properly monitored?

Nick Buckles: We have regular monthly review processes on all contracts with UK businesses, and the service levels we deliver on police outsourcing contracts and prison contracts are exemplary. They are long-term outsourcing contracts where we deliver excellent cost savings for Government and excellent service improvements. We really have had a very strong track record on delivery. This has been a major issue for us, clearly.

Chair: But there are other examples. I think Dr Huppert mentioned the Jimmy Mubenga case.

Nick Buckles: Yes.

Q264 Chair: Were you aware that the CPS had now written-I don’t expect you to have read the Select Committee’s last report into this, but they were G4S escorts taking Mr Mubenga to his deportation-a highly critical set of recommendations and the shortcomings in training of your escorts?

Nick Buckles: I wasn’t aware of that.

Q265 Chair: Nobody in preparation for this Select Committee hearing has briefed you on this?

Nick Buckles: I was briefed to say that there was no action to be taken.

Q266 Chair: Well, the people concerned are not to be charged, but the CPS has written to your organisation-and in this particular case, somebody died, Mr Buckles, so it is a very serious matter-saying that there were shortcomings in training given to security guards and various other recommendations. You were not aware of that?

Nick Buckles: No.

Q267 Chair: So you would not be aware if contracts for Lincolnshire police or other detention centres were being carried out properly, would you, if you didn’t know about this?

Nick Buckles: I definitely would, because we have a very strong customer process to make sure customers are feeding back on the quality of service. This was a very, very tragic incident. It didn’t mean that the whole contract wasn’t working successfully, but it was a very, very tragic incident.

Q268 Chair: Yes. You did say in January 2011 when somebody asked you what you look for in hiring senior staff, "I look for track record. It is a measure of how someone is going to behave in the future". You remember saying that?

Nick Buckles: Yes.

Q269 Chair: So what about this track record of what you have done in this particular case? It is bound to count against you, isn’t it?

Nick Buckles: It is, but then you have all the track record of the business we have provided very successfully over the last 10 years for the UK Government as well.

Q270 Michael Ellis: I just want to get a couple of things clear. Does G4S accept 100% responsibility for this failure in this contract?

Nick Buckles: We accept 100% responsibility on the basis that we signed the contract.

Q271 Michael Ellis: Yes, so you are not seeking to get out of that responsibility?

Nick Buckles: No.

Michael Ellis: You accept that you were duty-bound under the terms of a contract that you entered into willingly to fulfil the terms-

Nick Buckles: Yes.

Michael Ellis: -and you did not do so.

Nick Buckles: Correct.

Q272 Michael Ellis: It is also fair to say that you will now, going forward in the few days remaining before the Olympics, bend over backwards to, in the first place, secure as many personnel as possible to help the police and military authorities in their endeavour, and you will do that?

Nick Buckles: Yes.

Michael Ellis: You will do everything that is within your power to do?

Nick Buckles: Absolutely, yes.

Michael Ellis: Cost will not be a consideration?

Nick Buckles: Absolutely not.

Q273 Mr Winnick: Isn’t it fortunate, Mr Buckles, that when your company at the last moment finds that it can’t do the job to which it was contracted, there is the Army and there are police officers all over the country stepping in?

Nick Buckles: We are extremely grateful for the military and the police helping us out in this instance. There is no doubt about that.

Q274 Mr Winnick: For a company that is so keen to get Government contracts and the rest, and the Chair made a reference to one very tragic incident which occurred, do you feel at all that there should be more concern about resource, about outsourcing in view of what has occurred?

Nick Buckles: I think this is a very unique contract. I keep saying that, I know, but a standard outsourcing contract over a long period of time has a fantastic track record of success for the Government and for the service providers. There is no doubt about that. This is a very specific, massive events contract which is completely different from how we usually do Government outsourcing.

Mr Winnick: In which of course you fell down totally.

Chair: Thank you, Mr Winnick.

Q275 Mr Winnick: Just one more question, if I may, and if I may return to what I said earlier: will there be any hesitation as a result of what has happened over taking over, if you can, the contracts whereby your organisation would undertake functions currently being undertaken by the police?

Nick Buckles: We never say we will take functions undertaken by the police. We undertake the functions that the back office and middle office provide for the police force. We never say we will take over from the police force themselves, but we can introduce innovation cost, new technology-cost reduction in new technology-into the police market.

Q276 Chair: I do not know, Mr Buckles, whether you have seen the letter from David Taylor-Smith to me, copied to all members of the Committee dated 5 July, which states all the aspect of policing that you feel you could take over. There is an awful lot in there, isn’t there?

Nick Buckles: Yes.

Mr Winnick: Which is more than just back room stuff.

Chair: In Lincolnshire, you are building a police station and running the police station.

Nick Buckles: Yes.

Chair: So it is quite a lot. Mr Clappison then Dr Huppert, then we will close.

Q277 Mr Clappison: To be fair to you, I know you have apologised, but looking at it, and use whatever language you want, can you give us a word which in your judgment would sum up the performance of your company so far? What word would you choose?

Nick Buckles: It is a difficult question. Let me just think about it for a moment.

Q278 Mr Clappison: While you are thinking about it, can I put my other question to you, which is this, the same thing I have said in the House: will you take away from this Committee everything that we have said to you, particularly about the Armed Forces and their families and see if there is something additional, extra, in addition-

Nick Buckles: Absolutely.

Mr Clappison: -to what you have already said that you can do to make life better for them and to reward them?

Nick Buckles: Absolutely.

Nicola Blackwood: And the police.

Mr Clappison: And the police, yes.

Q279 Dr Huppert: I have already highlighted the fact that you are very fortunate that the police and the military will step in to cover for you and so it is a catastrophic failure for your company rather than a catastrophic failure for the country, if we had to close down Olympic venues, for example. I think that is very fortunate. You have a huge range of other contracts. Have you ever had to get assistance from the police, the military or anybody else in any of your other contracts?

Nick Buckles: Never.

Q280 Dr Huppert: Never at all? So if we go through, we will find that that has never happened, so this is a one-off case where the state has stepped in to insure you?

Nick Buckles: Yes.

Dr Huppert: Thank you.

Q281 Chair: Mr Buckles, do you have any intention of applying for the security contract for the World Cup in Brazil or the Olympics in Brazil?

Nick Buckles: No.

Q282 Chair: That has happened now, because in your last report, I think you indicated, with a picture of the Olympic Stadium, that you would be going for these contracts.

Nick Buckles: Correct.

Q283 Chair: So you have decided not to go for these contracts?

Nick Buckles: Yes.

Q284 Chair: As of when?

Nick Buckles: As of last week.

Q285 Chair: I have to say, I asked the members of the Committee to sum up your performance and the performance of the company so far, and they have used these terms, "Unacceptable, incompetent and amateurish". Though the Committee is most grateful to you for coming in, we feel that those words best express our deep concern about the way in which this matter has been handled.

As for you, Mr Horseman-Sewell, I think it was irresponsible to make a statement on 6 July stating you could manage to deliver the Olympics in Australia and London on the same day, when you knew that there were concerns about the way in which this contract has been delivered. In the end, Mr Buckles, it is a matter for you to decide what you do about your future.

Nick Buckles: I agree.

Q286 Chair: But this Committee will continue to monitor very carefully what happens over the next weeks and we want to ensure that you are able to deliver, with the police and the military, the best Games the world has ever seen.

Nick Buckles: Agreed.

Q287 Chair: Then of course it is for you to decide what you want to do about your future.

Nick Buckles: Agreed.

Chair: Thank you for coming in.

Nick Buckles: Thank you.

Prepared 23rd July 2012