To be published as HC 531-iii





Home Affairs Committee

Olympics Security

Tuesday 11 September 2012

Bernard Hogan-Howe QPM and Chris Allison MBE

LORD COE and Paul Deighton

Charles Farr OBE

Nick Buckles and David Taylor-Smith

Evidence heard in Public Questions 338 - 637



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Oral Evidence

Taken before the Home Affairs Committee

on Tuesday 11 September 2012

Members present:

Keith Vaz (Chair)

Nicola Blackwood

Mr James Clappison

Michael Ellis

Dr Julian Huppert

Alun Michael

Mark Reckless

Mr David Winnick


Examination of Witnesses

Witnesses: Bernard Hogan-Howe QPM, Commissioner, and Chris Allison MBE, Assistant Commissioner, Metropolitan Police Service, gave evidence.

Q338 Chair: Could I call the Committee to order and could I refer everyone present to the Register of Members’ Interests where all the interests of members of this Committee are noted? I welcome the Assistant Commissioner and the Commissioner for this session. This session is primarily, although not exclusively, about Olympic security. As we have you here, Commissioner, we thought we would explore a number of other issues about policing in London as you are coming up to your first anniversary as Commissioner. The Committee intends to conclude its examination of Olympic security with the session at the end of this morning and produce a report by next week.

Could I begin, on behalf of this Committee, by passing on our thanks and appreciation to the Metropolitan Police for the incredible work they did during the policing of the Olympics? It has been an enormous policing success. We are all very grateful and we would like you to pass that on to all the serving officers who participated in this very important and very complex operation.

Bernard Hogan-Howe: Chair, can I just say thank you for that? I know this Committee’s task is to call the police to account, but those comments are appreciated. First of all, I commend Chris and his team for all they achieved but, of course, we did it with the help of other forces from the rest of the country. In fact, 52 forces contributed to that effort and for every officer that was committed to the Olympics we still had to police London. Apart from the great Games and the fact they were safe and secure, I think one of the things we were proudest of was that we managed to answer the phone on time 99% of the time, we managed to respond to normal incidents on target and we kept the rest of London safe. To achieve both together I think was a great achievement, so thank you for those comments.

Chris Allison: Chair, if I may just add briefly, there were obviously 12 venue forces. The Metropolitan Police was one of them, but 11 other police forces in the country had venues and were part of that policing operation and I pay tribute to what all the police officers did in delivering a safe and secure Games.

Q339 Chair: At the end of the day, do you know how many police officers were involved in the operation over the six weeks of the Olympics and the Paralympics? You have given us some figures about outside forces but do we know a rough figure? I am not holding you to the last PC, but do we know a rough figure?

Chris Allison: No, I couldn’t tell you, I’m afraid because of the mutual aid. On peak days we had up to 4,000 officers on mutual aid in London and that rotated over the period, so officers may have been down here for four or five days. Some officers were down here for a full 18 or 19 days. All I can say, Chair, is that on peak days nationally, including not only the backfill but also on the planned operation, we had something in the region of 15,000 police officers deployed policing the Olympic and Paralympic Games. As the Commissioner has said, on top of that we were still delivering core policing up and down the country.

Q340 Chair: So around about 15,000 over that period?

Chris Allison: On peak days 15,000 officers deployed on the Olympic operation, yes.

Q341 Chair: We want to turn to what might have been, what if something had gone wrong, just from the point of view of the inquiry of this Committee. As you know, because I am sure you have followed the deliberations of the Committee, we were very concerned at the last minute problem concerning G4S. When did you know that there was going to be a shortfall of G4S personnel to assist the Olympic operation?

Chris Allison: I knew at the meeting of the Olympic Security Board on 11 July when G4S for the first time said they were unable to meet the commitment. I was sitting at the meeting, Charles Farr was in the chair, and it was at that time we looked at the contingency plans, which were a combination of the military stepping in. When we made some policy decisions about focusing the military on the support in London, and in effect what I would say were the south forces, we then recognised that we would need to do a backfill in the football forces making use of police officers. That was 11 July.

Q342 Chair: We have taken evidence from the Chief Inspector last week and we have seen a copy of two reports that he produced, one in September and one in February of this year. Presumably you, as the Olympic lead, would have seen these reports?

Chris Allison: Yes, I did. They were commissioned by Charles Farr as part of the assurance process in relation to the overarching safety and security programme but clearly I had sight of them. They were highlighting some issues in terms of how we were making sure that all of our plans were joined up. As you are aware, LOCOG, as the venue operators, are responsible for safety and security.

Q343 Chair: We understand that, but you see it is really quite clear in the first conclusion, 6.1, "LOCOG security programme is behind schedule. This results from systemic issues, which if left unaddressed may put aspects of the security of the Games at risk". That is a pretty serious conclusion from the Chief Inspector. Even though LOCOG was responsible, you were leading on behalf of the police. Surely you would have taken what Sir Denis O’Connor and his team have said seriously, especially when their main recommendation is the workforce project requires frequent and intrusive performance monitoring. If you go on to the second report by Sir Denis, that is equally concerning. He says that the situation is retrievable but it is pretty serious in what he says about the arrangements. Have you seen the Deloitte report and the KPMG report?

Chris Allison: No, I haven’t, Chair.

Q344 Chair: Even though you were the lead on Olympic security, are you telling me that they did not let you have a copy of these reports?

Chris Allison: It is quite important to stress what I was the lead for Olympic security for: I led the police service response and the other emergency service response. Our job is maintenance of the Queen’s peace, prevention of crime and detection of crime, and saving people’s lives in the event of major incidents occurring. My predominant focus is the public street, the public realm. I support the venue operators by having a minimal policing presence inside, in exactly the same way as we would do at a football or a rugby match, and we are in the position to step in if required in the event of any major incident. That is why we have a bronze commander there. I think it is important to stress that I am not in charge of the totality of operation. This is all about groups of individuals working very closely together and that is why we were very interested in what was being said in the HMI reports.

Q345 Chair: So you saw the HMI reports but you did not see either the Deloitte report or the KPMG report, even though you were sitting on the Olympic Security Board?

Chris Allison: No, I don’t recall ever seeing them, sir.

Q346 Chair: This is odd, isn’t it? Here we have a very senior police officer who is obviously at the top of his profession, able to advise those who run LOCOG, but nobody offered to show you these reports?

Chris Allison: Those are reports done for a private company, LOCOG, about their operation. Obviously, we were working very closely with them and through the Olympic Security Board there was heavy oversight to ensure that collectively when all of the various plans came together there were not any holes in them, and there was not going to be any conflict between them. That is what we had been doing all the way through. The policing of major events is all about different organisations working very closely together and that is just what we have done.

Q347 Chair: We understand that. But you did see Sir Denis’s reports?

Chris Allison: I did.

Q348 Chair: Did they ring alarm bells with you? We all know Sir Denis. He tries very much to be consensual in what he does, but these reports are really quite critical.

Chris Allison: Clearly reports like that, which indicate that there is an issue or a problem with the programme, make us all sit up and watch, and that is why there were regular meetings of the Olympic Security Board. The assurance process spent a lot of time looking at the LOCOG operation to try to ensure that all of the work that was being done within that side was going to achieve what we wanted.

Q349 Chair: So you knew on the 11th when you went to the Olympic Security Board. That was the first time that you knew that there would be a shortfall from G4S?

Chris Allison: Yes. There had been some scheduling problems, as I think you are aware, Chair. As we progressively moved from what was business as usual into a lockdown period from about 27 June, there were problems with the computer systems that G4S were going to use, and during that scheduling period an element of the military contingency force was put on standby and the police service occasionally would step in to assist, but it was not until the 11th that we were told by G4S that they were unable to-

Q350 Chair: We understand about 11 am was the meeting of the Olympic Security Board.

Chris Allison: I can’t recall the exact time, I am afraid.

Q351 Chair: Is that the time they said, "We don’t have enough"?

Chris Allison: That is the time. They came with a sheet of paper, for the first time, which said, "We do not believe that we will be able to deliver on the contract."

Q352 Chair: What was your reaction to that?

Chris Allison: The reaction was, clearly the Olympics is going to happen, we can’t stop it happening. Unlike other matches that we could delay for a period of time, we couldn’t, it had to happen, so this is where the contingency plan stepped in. Part of the approach of the various people around the room was that we were all going to work together. Everybody recognised the importance of flexibility. The military stepped up to the mark, the police service stepped up to the mark and filled the holes where they were required.

Chair: Let us come on to what happened afterwards.

Q353 Mark Reckless: When you see a report like this everyone sits up and will act on it, but you were not shown this report, were you?

Chris Allison: Sorry, which report, sir?

Mark Reckless: The Deloitte report from 11 May identifying the serious failures and the recommendations.

Chris Allison: No, I didn’t see the Deloitte report, but what I did see was the HMIC reports.

Q354 Mark Reckless: But surely if you were working as closely as you say with LOCOG, would you not expect to receive a report of this nature?

Chris Allison: Not necessarily. It was a report done on behalf of them, for them, looking at their own programme, in the same way that I didn’t necessarily share the detail of the assurance process that I did of the 12 Olympic forces. I did a detailed assurance process. I went line by line into all the plans. All I would share with my colleagues within LOCOG and the Olympic Security Board was the high level where we thought we were with the programme, and that was what was being done through the assurance process that was put in place through the Olympic Security Board.

Q355 Mark Reckless: It doesn’t sound as if you were working that closely together if none of these reports were shared, does it?

Chris Allison: I would say this is the closest I have ever worked with partner organisations in delivering any event. The testament to how those groups of individuals have come together is what we have seen over the last six weeks.

Q356 Mr Winnick: The Met often comes in for stick, justified or otherwise as the circumstances merit, but I think it should be a matter of satisfaction to you both that there has been hardly any criticism, if at all, about the way the police have conducted themselves and carried out their essential duties during the Olympics. I would like to join in the congratulations to the police forces and all those involved. When you learned at a very late stage in the proceedings, a fortnight before the Olympics were due to start, on 11 July, you say you had contingency plans. Correct?

Chris Allison: Yes, sir, if I may answer that. One of the first things we put in place back in about May 2011 was a 1,000-strong military contingency force that was capable of responding to any incident that we needed personnel for. Predominantly we viewed that to be focused on work inside venues. We also had done some work on a move to critical, which was if the threat level had gone up and we needed to put additional people into the venues, where would it come from. Again, we made the position clear that the police service were unable to do that because in a move to critical we would have to do a lot more outside in the public space, so a further contingency force of the military was set aside. In effect, the decision had been made in the planning processes that we would move to the military and ask them to assist, and clearly the police service would backfill wherever possible, wherever it was required. As a result of what happened on the 11th and then over the next few days, that combination of the military supporting in the Met, Hertfordshire, Thames Valley, Dorset and Essex and for the five football forces, it was a full backfill from wherever it was required from the police service. That is why it was a combination.

Q357 Mr Winnick: Although one does not want to generalise too much to other scenarios, would one not be of the view-and let me know if both of you disagree-that once you and the Home Secretary were told on 11 July, if there had been no backup from the police and from the army, there would be a very different position, would there not, once the Olympics started? My question to you is, did everything rely on the backup that you have just been telling us about?

Chris Allison: Yes. Without that extra personnel being put in we could not have guaranteed the island site’s status. Therefore, we could not have ensured that one of the key measures to prevent terrorism getting through would have been in place. We would have had to look at a completely different set of contingencies. Part of the programme had been throughout to look at the various backup measures we needed to put in place, simple things like if a command and control suite went down where we were going to move the command and control to. We looked at the contingencies across the various elements of the programme and back in May 2011 that consideration of a 1,000-strong military contingency force was just for an eventuality like this, something like a catastrophic failure of a fence line or people not turning up to work and we needed to put people in. But if they had not turned up, it would have been a challenge.

Bernard Hogan-Howe: Chair, could I just add that, as Chris has said, in May 2011 a force of around 1,000 was identified as a reserve contingency for whatever eventualities? Then again in April 2012 a further 2,000 military were put in place. During that period, people will remember that one of the big concerns for the Olympics was that, following on from the awful scenes in London in July 2011, when there were riots and the whole of the city had problems, was that we should put police reserves into the plan too. So they were a further reserve, which we had not had when the planning had first started, now six years ago. There had been a reasonable response to the events in London of last year, because no one wanted to see that again and if there had been any sort of problems we needed to be sure that we could respond in a timely and effective fashion.

Q358 Mr Winnick: I am not referring to other scenarios, but in this particular context, bearing in mind what occurred and what G4S were not able to do, and that you were notified so late in the day, would you say that was an abysmal failure of the private sector?

Chris Allison: I am not going to say it is an abysmal failure. G4S will talk for themselves, and I have heard them giving evidence here. For me, what it showed was the strength of the various people who were working together to deliver the Olympics. As I said at the time, the plan did not change. The plan was exactly the same, we just changed the people who were delivering the plan because we had to, and the military and the police service stepped up to the mark to make sure that we could still deliver on the core plan.

Q359 Michael Ellis: Commissioner, can I add my congratulations? One often hears criticism of the police when things go wrong but rarely praise when things go right, so I would like to do that. Did you detect or have you detected yet any spike in crime rates in your metropolitan area, and do you anticipate any such spike in crime rates because of resources being deployed to the Olympics?

Bernard Hogan-Howe: At the moment we can’t be absolutely sure about this. We will know by the quarterly figures, because the first problem we have is comparing it with last year. As I have already said, last year we had the riots and therefore making direct comparisons between the months gets rather difficult, so we are having to go a bit further back. But our initial assessment is that during that period crime was reduced by-and I am not going to be absolutely sure about this-something of the order of 6%. So there is certainly no evidence of crime going up, despite the fact that there were so many more people travelling to London, but then again we did have significant police resources here, so I think it was a combination.

Q360 Michael Ellis: There were a lot more people watching television, perhaps.

Bernard Hogan-Howe: It could well have been, but equally there were still people out on the streets enjoying themselves, going to these venues on unusual routes. People don’t always go out to the east of London in those volumes.

Q361 Michael Ellis: Were there any serious incidents that caused concern?

Bernard Hogan-Howe: Not particularly, I don’t think. Chris might be better placed, but I think if you looked at the rest of London there were no particular critical incidents that caused us great concern apart from the normal flow of crime in London. We had some protests, as people will be aware. There were the Critical Mass protests around cyclists. That was on the opening night of the Olympics, but that was dealt with effectively. As you will be aware, the taxi drivers in London would have preferred to have used the Olympic routes and they had a protest, but I think we responded to that in a reasonable way and that was dealt with. So I think the protests that did occur were well managed and did not disrupt the Games, which was a major issue for us.

Q362 Michael Ellis: Assistant Commissioner, can you confirm that?

Chris Allison: Yes, I can add to that. We had said all the way along that protest is a fundamental and important part of our democracy but it is a conditional right. It needs to be done lawfully and peacefully. We spent a lot of time with protest liaison teams working with protests. On every day throughout the Olympics there were protests taking place across London but they did not disrupt the Games. We had said all the way along that our strategy was to try to ensure that people could protest but not disrupt the Games, and that is exactly what happened.

Q363 Michael Ellis: There were no gold-command-level incidents that caused concern at the time?

Chris Allison: Gold command was in place throughout the whole of the period. It started on 13 July and will go all the way through until this weekend with the same command team. I do pay tribute to Commander Bob Broadhurst and Commander Mick Johnson, the gold and silver, who have done a fantastic job. Due to their skill, their deployment of officers, they have helped make sure that the capital could still operate. Any incidents were dealt with, any protests were dealt with and the Games still carried on.

Q364 Michael Ellis: Finally from me, was there anything that, looking back, you would have done differently? For example, did you feel in retrospect that you had too few officers in one location or too many officers or too few resources? Were there any communications difficulties? I know you had a number of forces from out of area, officers helping. Anything like that that you would look at differently?

Chris Allison: We are doing the debrief at the moment, and that will take a bit of time. You can always learn from every event that you do but suffice to say at the moment there is nothing that is a major issue that I would be saying, "We definitely need to change that." I paid tribute last night to the logistics team who mobilised over 4,000 officers a day from across the country into London. I spoke to a large number of the people on mutual aid who found all the arrangements had worked really well and they were having a very good time.

Q365 Michael Ellis: The Airwave as well?

Chris Allison: Yes, the Airwave system stood up to everything that was required of it. The command and control system that we had increased dealt with everything that was required of it. At one point we had a challenge with our command and control suite as a result of a pipe breaking. We immediately went to the fall-back site, which worked seamlessly without any issue, and within 36 hours we were back at the original site. So all of the contingency plans that we put in place actually worked. I am not saying everything is perfect, you can always learn from every event, and we will debrief it. We will make sure we put any learning into future events, but I have to say there is nothing going to be as big as the Olympics again for us.

Bernard Hogan-Howe: Just to add, Chair, of all the mutual aid people I saw-and I think between us we saw an awful lot of the 4,000-it is the first time I have talked to police officers who have been on mutual aid and have been incredibly complimentary about the accommodation and the food and the briefing. They must have got it right, because they would have told us. On the whole, given the scale of the task, it seems to have gone smoothly.

Q366 Nicola Blackwood: It is unusual to have such universal praise when there has been such a last minute change in plans so I think that you should be quite proud of how the contingency plan worked. One of the concerns that emerged during Mr Buckles’ last appearance was the cost that the police would incur with the extra resources that they would have to deploy. Do you know yet what that cost will be for the Met?

Chris Allison: I don’t know the total cost. We are still working through that at the moment and that will be fed into the Home Office. What we did quite early on is we had already taken something in the region of 14,500 police officers out of UK policing to deliver the Games and we had done this by cancelling days off, by reducing the number of officers who could have holiday and cancelling all training, because we still had to deliver core policing. We were in a position where we couldn’t backfill the G4S just by taking officers off normal duty so we made a decision, discussed it with the Home Office, that where officers were deployed to that duty it would have to be done on overtime so it didn’t impact on what I would describe as core policing, so communities up and down the country were still getting that at the level that was required. The figures from each of the forces are in the final calculation at the moment and that is part of some commercial negotiations that will be fed through from LOCOG, from Government to LOCOG, and LOCOG in their discussions with G4S.

Q367 Nicola Blackwood: The last time Mr Buckles was here he gave an assurance that they would fully reimburse the costs of extra officer time. Have you received any further assurances of that?

Chris Allison: During the Games I received a letter from the Home Office saying that all reasonable additional costs required by the police service would be met through the Home Office, because the Home Office could make sure that any bills were passed through to LOCOG or would take it off the grant. As I say, that is part of commercial negotiations that are going on between LOCOG and G4S at the moment.

Q368 Chair: Let us conclude on Olympic security. This was not your responsibility. Ultimately this was the responsibility of LOCOG. You were there to provide the additional support that was necessary to police London. Is that right?

Chris Allison: That is right, sir, but we are all a team working together and we work very closely together. But you are right, the responsibility for security, the contract with G4S was a LOCOG contract. It was their responsibility. We were interested in what was going on, because we wanted it to work, but it was their contract.

Q369 Chair: In hindsight, in terms of a future major event that could occur in London, which we hope will occur, do you think that there ought to be more disclosure between colleagues and partners? Would you have liked to have seen the other reports that we keep referring to that you did not see?

Chris Allison: I think we will learn the lesson from this that in future if we were doing a big event like this we might all say, "Remember what happened last time? How are we going to make sure it doesn’t happen and how can we make sure that that doesn’t happen?" But the basic principles, I would say, of how we delivered security for this Olympic Games would be how we would deliver it again in the future. It is built on custom and practice, stuff that works in this country-venue operators responsible for their venues, we supporting them and predominantly doing the public space-but you can always learn, Chair.

Q370 Chair: Was the failure of the private sector supplier, as LOCOG have put it in their letter to us, which you have not seen, the only reason why we had a problem on 11 July?

Chris Allison: That was the only reason. G4S said on that day, "We can’t provide the staff that we said in our contract we would provide to do venue security. We need to find another way," and that is what we did.

Q371 Chair: Let us move on and take this forward with you, Commissioner, and the whole issue of privatisation of police services and particularly G4S. As you know, Surrey have decided to pull out of the proposed privatisation of part of their services. One of the main suppliers was going to be G4S. Does this provide a warning to you as you try to cut your cloth according to the budget that you have been given? Should there be more risk on private sector suppliers as a result of what you have seen?

Bernard Hogan-Howe: I suppose what commerce may be doing is reflecting on the failure of this contract, because clearly at the end of the day it was a failure. I suppose what they are going to have to think about is that a failure of any contract for a commercial entity is a serious issue, but of course when it fails in a public space with a public contract of this nature, the amplification effect of the media’s inquiry, this Committee’s inquiry and Parliament’s inquiry has a very great effect, not least on share value. So I suppose they are going to have to think about when they get involved in these contracts are they factoring in the risk appropriately and are they getting the costs right. That is something they have to think about.

Q372 Chair: What do you think, because there are going to be contracts that you are going to have to give out? The Deputy Mayor came in last week and talked about better procurement. In the end this is going to be your decision. How are you going to deal with these matters now?

Bernard Hogan-Howe: What I have said in the past, and I would stand by, is that I think there is an irreducible core of policing that we should not outsource.

Q373 Chair: Could you define that? By mistake last week I said that this was the Mayor’s phrase and I was reminded by the Deputy Mayor that this was your phrase. What is the irreducible core?

Bernard Hogan-Howe: He had repeated what I had said.

Chair: He does have a tendency to do that sometimes.

Bernard Hogan-Howe: It is fair. I think he was just agreeing, really.

Chair: What is the irreducible core, so we can understand it?

Bernard Hogan-Howe: I think for me the starting point is that investigation and patrol are always core policing, and any use of warranted powers. It seems to me that the expression of power by the state through the police is a very privileged position, and I don’t think that should be done by the private sector. I think there are some areas in which the private sector has things to teach us and can help. Whether it be around IT, HR, finance, these are things that are support functions. However, they are an integral part of delivering the police force and I think it is important to make this point, because as police and crime commissioners come along we want to make sure that this is preserved within the force, although the procurement of it, the challenge around the delivery of it, the right setting of contracts is, of course, something for which we should be held to account. But I don’t think these things should be hollowed out of the police service and then run separately by PCCs or what was the police authority. For me, we could all agree clearly that there is an opportunity to think about support functions for the private sector but not where it comes to expressing police powers.

Q374 Chair: We were a bit puzzled last week when we heard from the Deputy Mayor that there is no plan in place at the moment to deal with the shortfall in your budget, which the Chief Inspector said was about £233 million. We would have expected by now there would be a plan to deal with this. Why is there no plan?

Bernard Hogan-Howe: It is not true to say there is no plan. I don’t think there is one that we are yet confident will succeed over the next three years. What we have is a plan for this year, until March 2013, to make the savings necessary for this year, but what we need is a plan for the succeeding three years to take us up to 2015 so that we can save something of the order of £500 million. We will have that plan by Christmas. We will share the first draft of it with the Mayor and the GLA by 17 November. So it has taken quite a lot of work to get to this stage.

Q375 Chair: So it is your plan? I was under the impression it was Mr Greenhalgh’s plan. This is your plan that they are all waiting for?

Bernard Hogan-Howe: It is usually a fusion of the two, to be fair. What happens is that the organisation makes a proposal, and of course, the Mayor will have his own priorities that he would want us to observe, and we usually join the two together in the November period, so it is usually a joint enterprise, it is never just one organisation. We have said that by Christmas we will have these things in place, a plan to say what do we want to look like over the next three to five years. It will include savings of £500 million, but we are not going to salami slice our way towards a vision that we have not set out. We will have that plan by then.

Q376 Chair: By Christmas there will be a plan for the next three years?

Bernard Hogan-Howe: That is right.

Q377 Chair: What he also said was his doomsday scenario was if the number of police officers fell to 31,000 by 2015. Are you confident that you are not going to reach that doomsday scenario?

Bernard Hogan-Howe: I don’t think we can be confident until we have seen all the figures by Christmas, which is why I am hesitating to give a figure. It may be said, as the HMIC has said but I did challenge them that at the time, that we should have a plan by now for the next three to five years. However, I would point out that this organisation has gone through some radical change at a leadership level over the last year. Even now the team is still settling down with new directors of finance and HR. We have had a massive change at governance level. If you remember, on 16 January the police authority disappeared, a new Deputy Mayor was elected, Kit Malthouse. By 4 May, a matter of weeks later, a new Deputy Mayor arrived and we are all now forming a new plan. I think it is not unreasonable to say that we have to have a considered position over a very important thing, which is the future of the Metropolitan Police and the safety of London. I am confident that by Christmas we will have a plan that we can share with partners, we can consult on, but I want to make sure it is at least 80% right before we start flying kites that someone may start shooting at.

Q378 Chair: Absolutely, but you cannot be confident that his figure of 31,000 will not be reached? He was pretty clear that he did not want to see it reach 31,000.

Bernard Hogan-Howe: That will be part of the discussion. That will be one of the things that the Mayor and the Deputy Mayor will want to see within that plan, and we understand that, but we can only make proposals about what we think is financially possible. One thing that we are fairly confident of at the moment is, even if we end up with fewer people-and frankly finding £500 million out of a budget of £3.5 billion will mean fewer people-we still think we can manage to have more constables than the Metropolitan Police has ever had. That will mean less management but it will mean more doers.

Q379 Mark Reckless: Commissioner, you were referring to joint work between yourself and the Mayor’s Office on the policing plan and how these versions came together in November. But has the law not changed such that the Mayor or the Deputy Mayor for Policing now has responsibility for the development of the plan, rather than the MPS?

Bernard Hogan-Howe: You are quite right, that is true. I have mentioned some of the change that has happened around the police authority but, of course, one of the other changes is that the chief executive of what was the police authority, now the Deputy Mayor, and the deputy chief executive have changed too. So there is not an awful lot of capacity within that organisation at the moment to deliver everything I am sure it would want to. We always work together, and I think it is going to be particularly pertinent this year.

Q380 Mark Reckless: So the MPS is stepping in to help them out on this?

Bernard Hogan-Howe: Yes, but it will be proposals. It won’t be a conclusion. At the end of the day, as you said quite properly, in law and in practice it is the Deputy Mayor’s plan but it usually does depend an awful lot on the things we might suggest to be considered for proposals in that plan.

Q381 Mark Reckless: You were saying in law and in practice but, if you will forgive me, your description before seemed to suggest that in practice it was actually the MPS that was developing the plan.

Bernard Hogan-Howe: I think for this November there is a practical reality, which is that we always need to work together but particularly this year.

Q382 Dr Huppert: Commissioner, you spoke about the core of policing and that there are powers that only police should have, and I think we would all agree. Presumably you would agree that it is important that the public know who does and does not have such powers, which is why we have offences of impersonating a police officer and so forth. Have you looked at organisations such as the Newham law enforcement officers who wear uniforms that are, certainly to the untrained eye, indistinguishable from those of police officers? Do you think that might cause confusion? Have you looked at that particular issue?

Bernard Hogan-Howe: I have not seen the Newham ones, although I have visited Newham. I would always encourage any private security force to look completely different from the police. It seems to me that there should not be confusion because they don’t have the same powers, not least because I don’t want someone complaining to me about the actions of a uniformed officer who appears to be part of the Metropolitan Police. I would not want that sort of confusion. As you said, the statute on the books says quite clearly it is an offence to impersonate a police officer. There haven’t been too many cases taken to court and I think over time it has got rather confused, so I would like to see that distinction maintained, certainly not further eroded.

Q383 Dr Huppert: The latest Newham magazine has a rather telling photo of four people that look like police officers, so I hope you will have a look and have a word with them perhaps before investigating legal actions. More broadly, there has been a large expansion of community safety accreditation schemes, which again give a lot of what one might consider to be police powers to people who are not police officers. There is the issue about the uniforms and whether people know that they are not police officers. What are your thoughts about the powers given to people who are not in fact police officers?

Bernard Hogan-Howe: I must admit in the past-I am a traditionalist with this-I have approached it carefully and slowly rather than to extend it radically and quickly. It seems to me that some of the powers are very sensible, if you look at things like vehicle examiners, people who are examining heavy goods vehicles, sometimes they need a power to stop rather than tying up a police officer to stop the vehicles and then have the examination. If you look at some things like the escorting of very large loads on roads, which 20 years ago tied up large numbers of our highway patrols, traffic patrols, an awful lot, for hours on end with no great benefit, it seems to me that for things like that it is wise to start vesting the powers, but I am afraid where it starts to get into the public domain, where it is interfering in a person’s free right to move around, or starting to investigate a crime, then for me that is a distinctive police power.

Q384 Nicola Blackwood: One of the issues that I believe you will be considering in your three to five-year plan is the future of counter-terrorism, and that was kept where it was until after the Olympics.

Chair: Sorry, if I could interrupt, Ms Blackwood. Mr Clappison is going to raise this later on in the questioning. We will come on to counter-terrorism later.

Q385 Mr Winnick: I take it, Commissioner, that it is your wish that the police force in greater London should be the face, as far as it is possible, of present day London, should be representative of London as it is today?

Bernard Hogan-Howe: It is, yes.

Q386 Mr Winnick: In that regard, are you in a position to tell us-if not, perhaps you will write to us-the percentage of females who are chief inspectors and above?

Bernard Hogan-Howe: I am afraid, Chair, I can’t answer accurately at the moment but certainly I will write and provide that information.

Q387 Mr Winnick: Relating to females-I will come to blacks in a moment-is it an active policy move to try to recruit more in order, as I have said, that the Met should be representative of London?

Bernard Hogan-Howe: Of course. We are trying to recruit proportionate to London and proportionate to gender. That has improved an awful lot over the last few years but, of course, the difficulty is while our recruiting pattern has changed, when we have been recruiting-we have a pause at the moment because of the lack of cash-about 40% of the people we recruit are women but it takes a while for them to get through to being chief inspector. We will have to provide the data for you, but I think at the moment of all our police officers it is 24%, 25% who are women, and that percentage is increasing all the time as we recruit more women, and as men leave disproportionately at the end of their careers. So that is getting better and we do actively strive to get more people.

Q388 Mr Winnick: But you will write to us with the percentage of those who are chief inspectors and above. If we take the most senior police officers in London, let us say 25, a broad figure, of the most senior people under you, Commissioner, how many would be blacks?

Bernard Hogan-Howe: We have three officers who are from minorities.

Q389 Mr Winnick: Out of that 25 I have mentioned?

Bernard Hogan-Howe: That is right.

Q390 Michael Ellis: The Deputy Mayor of London came before the Committee recently. He commented, following a question I asked him, about the Metropolitan Police running a property portfolio bigger than its operational requirement and at a financial loss. How big is the Metropolitan Police’s property portfolio, and how big is the operational requirement?

Bernard Hogan-Howe: In terms of the portfolio we have at the moment, it is something of the order of 900,000 square metres, so approaching 1 million square metres, and it is valued at something of the order of £1.5 billion. I think that is a bit of a variable feast. In terms of what we need in the future, that is part of the planning exercise we are going through, so by Christmas we will be very clear. But I would not disagree with his conclusion that at the moment we probably have too much space for the requirements we have.

Q391 Michael Ellis: I think many people would expect and have suspected, Commissioner, that the Metropolitan Police would own things like police stations and stables for police horses and garages and the like, but they would not necessarily have expected the Metropolitan Police to own £1.5 billion worth of property portfolio, which is presumably rented out for commercial and residential premises. Is that right?

Bernard Hogan-Howe: Yes.

Q392 Michael Ellis: One would also not expect such a large property portfolio to be running at a loss. Would you agree that this is something that it is right to look at from the point of view of the Mayor of London, with a view to perhaps looking again at those sort of resources and seeing if they can be deployed more towards the frontline of policing?

Bernard Hogan-Howe: Definitely. What I would be quite happy to do is to see that we have less estate, but estate that is of top quality. Sadly, a very high percentage, probably approaching half of the estate we have, is pretty poor, partly for the officers and staff who work there and also for the public who attend. Some of it is almost Victorian, so whether it be investment in IT-what has happened over the years is there has not been the investment in maintenance so the value of the property has dropped and, as usual with the public service, as you will have seen at this Committee from time to time, we get very hair-shirtish about it when in fact we need high-quality estate, not only to do the job but also to make sure we maintain morale for our people. For me, I think it is very wise to reduce to I can’t say what percentage at the moment but, let’s say, even if it was three-quarters or two-thirds, and have a high-quality estate that we could move in and out of, which the rest of the market might want to lease as well if we didn’t need it, and to look at the mix, whether we owned it, whether we leased it, or what other options there are available.

Q393 Michael Ellis: This is part of the policy, isn’t it, of trying to look again at where resources are going as far as policing up and down the country is concerned, making sure that money is not being spent on things that are not what people would expect as far as frontline policing is concerned?

Bernard Hogan-Howe: I agree, except I think a note of caution that it is fair to put in this debate-and I have said clearly where I stand on it-is that £1.5 billion sounds a lot until you look at London property market prices. You have to look at the particular market we are looking at, and at the end of the day we have to work from somewhere. If we need to have horses and marine and aircraft and all the rest of it, it will be a significant bill at the end of the day.

Q394 Michael Ellis: I agree with that, but surely not all of the £1.5 billion property portfolio is being used by police at the moment. Do you know about that? Some of it is rented, as a property magnate would rent flats and shops and all the rest of it, isn’t it?

Bernard Hogan-Howe: There are some, but I think they are fairly marginal considering the overall size of the estate, and that is part of the thing that we will look at. I think these are decisions taken over the years. To be fair to everybody involved over the last 20 years, gradually the Metropolitan Police, along with the rest of the police, have pulled out of accommodation. You will remember we used to provide police houses in London, there were section houses, thousands of spaces. At Hendon we have had lots of space for people who are being trained. That has been reduced quite radically.

Chair: Thank you, Commissioner. Can we move on to counter-terrorism?

Q395 Mr Clappison: Before we move on to that, since I have not mentioned it already, can I very briefly say that a very large number of constituents have said to me that their enjoyment of the Olympics was enhanced by the participation in the security of the police and the armed services. I know that your officers were involved but also officers from a number of other forces, including Hertfordshire, which serves my constituency. Could you, in passing on the congratulations that have been expressed, pass them on to forces such as Hertfordshire as well?

Bernard Hogan-Howe: We will. In fact, one of the things we were wondering is whether we could arrange something like this every year because not only did the public seem to enjoy it but so did the officers. They didn’t want to go back, even for the odd days off they had. So it seems to have worked at lots of levels. I think it has probably re-enthused our people, getting a new set of people in. But you are quite right, we should give our thanks across the country and not just to London.

Q396 Mr Clappison: Thank you. Could I ask you about counter-terrorism. Obviously there is a lot of interest in this at the moment, and the future of the Met’s role in counter-terrorism. Could you share with us your latest thinking on it?

Bernard Hogan-Howe: Certainly. There was a report in The Times, I think this morning, where Sean O’Neill, the journalist, has slightly misreported me. I think the only thing I said, perhaps when I came to this Committee approaching a year ago, was that I was open-minded to any changes that might be put forward. The Home Secretary and the Government have said they wanted to review counter-terrorism and where it is at after the Olympics, so just about now. It seems to me that if it is an issue of national security we all have to be open-minded about what the future should be. The principal thing is keeping 60 million people in this country safe. So I am open-minded in that sense, but it seems to me that when we approach this discussion there are a number of things that will have to be considered, and I am sure the Government will. Number one is, is there a problem with the existing arrangement? What is the problem that we are trying to remedy? Number two is if there is to be a change-and one thing that has been proposed is whether or not the National Crime Agency should take on counter-terrorism-there will be a cost and at a time of austerity I am not sure where that money will come from. I think that has to be at least considered. The National Crime Agency, as it happens, is not yet up and working. It will be within the next two years, but it is a nascent body and I am sure that everybody will need to think about how that works initially with its original responsibilities as well as consider its new possibility. For me, they are really important factors that I am sure the Government will take into account and those are the three big questions that I, if asked for advice, would want to consider.


Q397 Mr Clappison: I am going to ask you about that. Obviously I won’t want you to say what your advice would be, but are you confident you will be giving advice to the Government on this?

Bernard Hogan-Howe: Yes. I have had assurances from the Home Secretary that whatever review takes place the Met will be involved in that review and also have the opportunity to make our case. I am sure it is something the Government at the highest level will have a view on because we are talking about a counter-terrorist network that keeps us safe.

Q398 Mr Clappison: Congratulations to it for keeping us safe in the present circumstances.

Bernard Hogan-Howe: Although we have talked about the overt in terms of the Olympics and the Paralympics and the Notting Hill carnival and the Jubilee, but of course the counter-terrorist command right across the country in the six months prior to these Games made well over 32 arrests, of which 26 people were charged. We need to wait and see the outcome of the cases, but clearly work has been going on in the background that has tried to make sure that people who might have a malicious intent have not been successful in those things that they were planning.

Q399 Chair: So you do not have a view on this?

Bernard Hogan-Howe: I think my clear view is that I have tried to set out the things I would need to have evidence of before I want to propose that there was a change.

Q400 Chair: The Deputy Mayor came before us last week and said he wanted to return the Met to a position where it looked after the citizens of London. Some of these national functions-he was agnostic on whether they should stay or not-were up for grabs. They could easily fit into a national organisation.

Bernard Hogan-Howe: I can’t say I am agnostic, because I think the present setup works pretty well, as I have just sketched out, and therefore if it was me making the decision I would want to address these questions: what is the failure; why the cost?

Q401 Chair: Why move it? At the moment you think the status quo is perfectly fine and you need arguments to change your mind?

Bernard Hogan-Howe: Yes, that would be my view. To go on to the point that the Deputy Mayor made about the policing of London, it seems to me that it is almost impossible in the capital of the United Kingdom to divide counter-terrorism and security from the policing of London. One of the great strengths, I think, of this country and its counter-terrorist network has been the link from local policing, that golden thread from community policing that links through to counter-terrorism.

Q402 Chair: I think you have made your view very clear. As far as you are concerned as Commissioner you would like it to stay. You are prepared to listen to arguments and be part of the discussion, but at the moment it works and counter-terrorism should remain in the Met. Is that right? Is that fair?

Bernard Hogan-Howe: That is a reasonable summation, with the addition of an open mind.

Chair: Right. We have some final quick questions. We are coming to the end of this.

Q403 Dr Huppert: Commissioner, if for all of policing, including counter-terrorism and all the other things that you do, you found you had an extra £1.8 billion over the next 10 years, what would be your number one priority for how you choose to spend that money?

Bernard Hogan-Howe: It is a good question, and I would need a bit of time to think about it, but there are probably two main things. One would be to enhance the neighbourhood and community policing response. I think there is an opportunity there for us to do more. The second thing is I want to invest more in technology, not to replace the people necessarily, but we in the Met spend about £220 million a years on IT. Across the country policing generally spends £1.2 billion on IT. My point would be that it is more green screen than it is iPad, I am afraid, and it does not seem to catch criminals. Lots of lists, but ANPR catches criminals, facial recognition helps, fingerprints, DNA quick turnaround. These are things that I think over time can make a real difference, and of course it links us into the community and the victims in a far better way in which you see business deliver a service. I don’t think we are anywhere near that yet. So that is the two big areas that I would probably invest in. Probably the other one would be training. We have embarked on a quality programme and I think in the past probably the police service has seen training as a cost not an investment. For me it is an investment provided it is done properly and it is invested towards crime-fighting, which I think is vital.

Q404 Chair: The Deputy Mayor also said there were 20,000 more lockers than there were police officers. Do you know what is in all these 20,000 lockers?

Bernard Hogan-Howe: No, Chair, but we are in the process of trying to find out. There is a problem, which is that the locker-and this is a boring topic but it matters-has not kept pace with the size of the things that need to go in it. All the public order kit that our officers keep sometimes needs to go into lockers. They haven’t got enough in one space so they end up with a second one. If they move between police stations they don’t take their locker with them. I won’t bore you with the rest of it. The bottom line is we need fewer lockers and therefore, going back to the estate, we will manage our space better, so we are just in the process of doing something about that. The cost is not insignificant when you look at the price of the lockers either. That said, anybody who comes up with a fantastic design solution instead of a locker that saves us space will make millions.

Q405 Chair: Finally, the Met is also responsible for royal protection, that is part of the duties, and I know you had to call in James Bond for the opening ceremony to accompany Her Majesty, but more serious is the issue of what is the role of the officer. You have made it very clear they are not there to regulate the lives of the royal family, but in respect of what happened in Las Vegas there could be a problem, couldn’t there, in terms of the safety and security of individuals? When is that report likely to come to you?

Bernard Hogan-Howe: We are already in the process of reviewing that particular incident. I stick by what I said, which is that our role is to maintain the security of protected individuals, some of whom happen to be members of the royal family. They have to lead a normal life and we have to strike a balance between intrusion into their lives and keeping them safe. That is quite a difficult balance for the officers involved, but there is a line that cannot be crossed, which is not to get involved in the social life of the principals. We don’t think that happened in this case and some of the reporting in the press was just inaccurate but, of course, if we choose to comment on that we break the convention we have, which is that we will not comment on security issues. I have reassured myself that in this case there was nothing inappropriate and in fact what appeared in photographs to be wrong was not as it appeared.

Chair: Thank you very much, and congratulations on your first anniversary as Commissioner. I am sure we will be seeing you again in the not too distant future.

Bernard Hogan-Howe: Thank you, Chair, for that opportunity.

Chair: Again, Assistant Commissioner Allison, please pass on our thanks to all the police officers involved; most grateful.

Examination of Witnesses

Witnesses: Lord Coe, Chair, and Paul Deighton, Chief Executive, London Organising Committee of the Olympic and Paralympic Games, gave evidence.

Q406 Chair: This is the Committee’s inquiry into Olympic security. Can I refer everyone present to the Register of Members’ Interests again. Could I begin, Lord Coe and Mr Deighton, as it is at the moment, by passing on to you, Lord Coe, the admiration and thanks of this Committee for the incredible work that you and your organisation have done in securing what we regard as the greatest Olympics that have ever been held? You in particular showed inspired leadership throughout the many years that you have had this job, and you made us all extraordinarily proud to be British. Thank you very much for what you have done. Mr Deighton, it is very unusual for the Select Committee to issue an invitation for someone to give evidence and for them then to be given a peerage and put in the Government. I don’t think it has ever happened before. I am sure it has nothing to do with our invitation, but can we pass on our congratulations to you for what you have done as the Chief Executive? I was not born in this country, I came here when I was nine, but I am really proud of our country and for what has been achieved. So, well done and thank you for what you have done.

Lord Coe: If I may, Chair, just very briefly, first of all thank you, and I take that as compliment right across the project of the extraordinary nature of the collaboration. I am really pleased to be here this morning to be able to say, after two years of bidding and seven years of delivery and seven weeks of the most extraordinary sport that we have seen, culminating in the extraordinary scenes yesterday with the athletes’ parade, that we did intend and deliver a safe and secure Games. But I also recognise very clearly that the largest challenge that we faced in the lead-up to the Games was the inability of G4S to deliver on the contracted number of security guards. The robust, secure, collaborative nature of the relationships that exist right across the project, and at their best within the security space, allowed us to recover that situation very quickly. I am acutely aware also, as the Chairman of the organising committee and spending public money, that we have a responsibility to protect the taxpayers’ purse, but the safety and security of the Games was our paramount concern.

Q407 Chair: Absolutely. We are going to concentrate in our report on what happened before the Olympics. Obviously we acknowledge the fact that they were very happily handled. Our questions relate today specifically to the worrying period before. I have had a chance to see both the HMIC reports, and thank you very much for sending us the briefing on the Deloitte report and the KPMG report. It is very clear that in those reports, not buried in those reports but in very firm conclusions, there are alarm bells that ought to have started ringing in the ears of LOCOG and others involved that there was going to be a problem as far as the delivery of G4S was concerned. The Home Secretary was very clear. The responsibility for delivery of this rests with LOCOG. It was not her responsibility. She only knew on 11 July. Mr Deighton, when did you know that there was going to be the kind of problems that we experienced on 11 July? Clearly they were in the reports. I don’t have to read out the conclusions but HMIC talks about the need for frequent and intrusive monitoring. Deloitte also is very clear that there were significant failures. In your letter to this Committee that we received last week you were talking about the significant failures of your main supplier. Surely LOCOG should have realised something was going wrong as early as September last year.

Paul Deighton: I think the first time we realised that G4S was not going to be able to meet the contracted private security numbers was on 11 July, that fateful day when they came in to tell us precisely that. They came to see us first. We immediately told the Home Office. Then they told the Olympic Security Board, which is chaired by the Home Office, later on that day. Up until that point the company had been very strong and very clear in its assurances that they would be able to deliver the appropriate numbers. As we do with every single contract we manage, we have a very proactive, rigorous approach of getting behind what is happening, looking at what is going on. You referred to the Deloitte report, for example. We commissioned the Deloitte report because we were concerned that the quality of the management information we were getting from G4S was not clear enough, was not good enough to give us the precise feedback we really wanted to make us comfortable and we changed all the templates to get better management information.

We were also before then getting some very clear signals. For example, we run the accreditation process with UKBA. Prior to 11 July we knew that just under 22,000 people had passed through the accreditation process. That is a very clear indicator they had sufficient numbers. We knew at that point in early July they had over 11,000 people that had been trained. We knew that they had spent the money that we put a budget aside for on building a capability, because we look at every invoice and make sure they are spending the money, to put the people in place, the systems in place to deliver all this. So we had independent evidence that the numbers were there. We had absolutely clear, consistent assurances from the senior management of G4S that they would be able to deliver and I think all the signs that we had seen up until then were consistent with signs we had seen in a lot of the contracts. My job over the last seven years has been solving problems. This particular aspect of the project, like many others, had a whole stream of problems that we continued to solve. So it was not until 11 July that it was clear to me that they would not be able to deliver.

Q408 Chair: Can I just refer to one report, the HMIC report of 27 February. It said, "Recruitment processes were being slowed down by LOCOG’s failure to produce standard operational procedures in time. G4S could not, therefore, produce the training curriculum without them." What would you say to that?

Paul Deighton: What we did is we worked on that. We went ahead with the existing operating procedures and then amended them at the training venues later so it didn’t make any difference to the training numbers. As you have seen, 11,000 people were ready, 22,000 had been put through the system. I think as G4S have said themselves, the problem was that they failed to deliver. I think we need to be careful in not trying to make this more complicated than it really is. They just failed to deliver the numbers they were supposed to deliver because their own processes broke down and failed to connect up all the candidates they had and deploy them effectively on the ground. That was the problem.

Q409 Chair: We understand that. Just take us to 11 July. You very kindly showed me round the headquarters when Mr Reckless and I went to the Olympic Park, so we know the scale of this operation. It is not just one man or woman sitting in a room. It is absolutely enormous. On 11 July you confidently expected G4S to deliver everything that they had promised to deliver over the last two years since they signed the contract. Who informed you and how were you informed that actually there was going to be a shortfall?

Paul Deighton: Mr Buckles and Mr Taylor-Smith came in to see me and two of my colleagues that morning, early in the morning.

Q410 Chair: What did they say?

Paul Deighton: They essentially said, "For the first time, we now don’t think we are going to be able to deliver those numbers so you, therefore, need to trigger your contingency plan." As I think you now know, we immediately moved into action with the Home Office.

Q411 Chair: Sorry, will you just take us through this? They came and told you. You told whom?

Paul Deighton: They came to see us, I think-

Chair: Was this the 8.30 am meeting or the 11 am?

Paul Deighton: This would be the 8.30 am meeting. This was in our offices. Immediately after this, one of my colleagues who is on that particular team went and told a Home Office representative who was in our office. The nature of the relationship between us and the Home Office and, as Chris Allison referred to earlier, with the police was extremely tight and collaborative right through this process. The Home Office were already in our office, so we told the official there. I think G4S then probably called Charles Farr independently and then they reported to the Olympic Security Board in the afternoon.

Q412 Chair: What was your reaction? What was your feeling on being told that they just didn’t have the figures? It must be a pretty devastating piece of news two weeks before the Olympics.

Paul Deighton: Yes. We switched immediately into problem resolution mode, which I have been in ever since, so I have not really spent a great deal of time analysing what went wrong. We spent all our time fixing it and we moved immediately into that mode, so for the next seven days I spent most of my time with my senior colleagues just making sure that we got hold of that operation, stabilised it, got to where we needed to be and then we were able to transfer it back into a more stable environment.

Q413 Chair: I know it is early days but looking back could you have had another supplier do this? Is there anyone else who could have done this job?

Paul Deighton: Well, I think they could have done this job, is the real answer. This was a very doable job. They should and could have been able to do it and they simply failed to manage this part of their business efficiently enough to deliver it. I think somebody else probably could have done it but they were the obvious and best candidates to do it. They are the biggest security company in the world. The Government is their most important client. The eyes of the world are on this project. They were highly incentivised to succeed because of all those reasons and believed they could succeed. For me, the issue is not it was a mistake to choose them. The issue is they failed to deliver on a project that they ought to have been able to deliver on.

Q414 Chair: I think in your letter to us you described it as a significant failure of your largest supplier. Is that right?

Paul Deighton: Yes.

Q415 Michael Ellis: Mr Deighton, I want to get this absolutely clear. Prior to 11 July, is it your position that G4S effectively misled you and LOCOG? You said to Mr Vaz that they had been very clear they could deliver the numbers and they had made very clear assurances. Have they led you up the garden path here? Have they basically said, up until 11 July at 8.30 am, a couple of weeks before the Olympics, "It is fine, we are handling it," and then they just present you with this crisis two weeks beforehand?

Paul Deighton: Yes. Let me give it a bit more context, because I think that has been clear in the discussions you have had before. In the period for up to two weeks before we had begun to see signs that were concerning us, some shortfalls as we moved into the period that we described as lockdown, which is when you search the venues, completely secure them and only let people in once they have been searched, so you needed more security people. They began to have shortfalls at various venues, which, as you would expect, we zeroed in on very intensively. During that period of review-"What went wrong here, why couldn’t you do that?"-they continued to assure us that this was a temporary problem, that the scale of the problem was comfortably within the reserves we had, because we always had a 1,000-strong military contingency force. We were assured by them their problem would never be more than 1,000 and they would fully recover by Games time. It was only under the persistent questioning and concerns that by the 11th it became clear they had to concede that no, they had a more serious problem.

Q416 Michael Ellis: So you had a couple of amber lights flashing in the weeks beforehand but no alarm bells ringing?

Paul Deighton: Yes. To answer your question directly, I believe the assurances I was getting from senior management they absolutely believed themselves. So their problem was, and I am sure this is what their own internal review would look into-they effectively created some special purpose operation to deliver this project. They clearly did not build it as robustly and efficiently as they had hoped and they clearly did not manage it as intensively as they should have done.

Q417 Michael Ellis: Unwittingly, effectively, they thought they were in a more secure position, and you believe that is the case?

Paul Deighton: Yes. What we saw from the 11th onwards-and I think this will probably be part of your questioning of their management-was each day as they themselves tried to work out why this had gone wrong and they peeled back every layer of their own operation, I think they revealed to themselves that it was not in the shape they believed it was.

Q418 Michael Ellis: As you pointed out, they are the largest security company in the world, the Government is their biggest customer, so this was a question of unwitting conduct on their part?

Paul Deighton: Yes.

Q419 Michael Ellis: Can I look a little bit more at the delivery. For example, did you detect any difference between the delivery of G4S against their contract in London and in non-London venues?

Paul Deighton: Of course the majority of delivery is in London, but I think it is fair to say that their delivery around the football stadiums was not particularly effective and because they were separate locations, because we could draw on incumbent suppliers at football grounds to some level, it was an obvious area for us to immediately separate off and solve through different solutions.

Q420 Michael Ellis: Lord Coe, do you have anything to add to that?

Lord Coe: No, absolutely not, other than the point that I suppose I make more broadly across the project, that it is the scale and scope and sheer size of it that does catch people out occasionally. I think Paul is absolutely right, I don’t think there was any deliberate misleading here. I think it was just simply that they did not understand the size and complexity of it and once they started to get into the system they recognised there were probably deeper pathologies.

Q421 Michael Ellis: Finally from me, the standards of attendance when they did attend, the standards of timekeeping and professionalism, do you have any observations about that as far as the G4S staff are concerned?

Chair: This is during the Olympics?

Michael Ellis: During the Olympics. Now we are talking about the actual standards of the G4S staff that were provided, attendance, timekeeping, professionalism.

Paul Deighton: During the Games themselves, we would see a shortfall against the original demand for G4S of anywhere between 4% on their best day and 35% on their worst day.

Q422 Chair: During the Olympics, the worst day it was down 35%?

Paul Deighton: Yes, against the original plan, which of course was why on the 11th we called for the extra 3,500 soldiers. So that is not surprising.

Q423 Michael Ellis: For their best day they were 4% down?

Paul Deighton: Their best day during the Olympic Games they were 4% down and then they had recovered the operation during what we call the transition, which is the period before the Paras. At the Paras they had recovered to a stable operation where they were essentially able to meet the numbers in the original contract.

Q424 Michael Ellis With those numbers that they did provide-Lord Coe, I don't know whether you want to come in on this-were you happy with the quality and the conduct of the personnel involved?

Lord Coe: Yes.

Q425 Mark Reckless: You stated that there were a couple of amber lights in the two weeks before 11 July, but the report that you received from Deloitte on 11 May, a full two months before, gave what I would describe more obviously as red lights. If I may I will quote the key paragraph in full, "It should also be noted that in order to deliver and deploy the agreed target of 10,400 trained security personnel and meet their overall management responsibilities for operational deployment across the guard force, G4S had to rapidly scale their processes and infrastructure in an accelerated period. However, key supporting elements that would be expected to be present in a mature, scalable supply environment are undeveloped and require significant augmentation. These include a strategic and integrated approach to candidate communications and engagement, a robust and consistent stakeholder engagement strategy, and a management information system supporting performance and commercial management reporting." Given none of those elements were in place and you were told that two months before, why didn’t you monitor that over the six-week period before these amber lights and do anything about it?

Paul Deighton: We had been monitoring that since we signed the contract in December. We, of course, commissioned the Deloitte report. As you know, when you commission a report it is because you know you have an issue and you want some structured advice about how to repair what you know are some concerns. In particular with the Deloitte report, we wanted to work with G4S to improve their management reporting. What we were not getting clearly enough was a real understanding of where candidates were in the pipeline so we could absolutely understand whether the right number would be delivered at the end. We knew there were problems and we wanted better reporting of it. That was the principal thing. I think you probably saw in your own constituencies that people who had been interviewed by G4S were not being properly managed. They were not contacted for a while. Remember we hired 70,000 volunteers, seven times as many, during the same period so we understood very clearly that one of the most important things for a temporary programme like this was to build a relationship with your potential candidate and make sure they felt part of it, and make sure they understood what the next step was.

Q426 Mark Reckless: The report refers to critical communications over personal engagement around being a part of history, training requirements and personal commitment, and the benefits of receiving a SIA licence and future prospects, and the report is saying it was not clear that was happening. I think you showed considerable foresight by commissioning this report and having it on 11 May, but do you recognise that there was anything lacking in LOCOG? I have to say also, Deloitte point to these problems. I am not necessarily quite as clear precisely what the recommendations are and what the processes are for dealing with them. But do you feel for LOCOG, as opposed to Deloitte, that having seen and read this report, you followed up on it as well as you could ask?

Paul Deighton: We followed up on it very aggressively. We put in place the new management reports that much more clearly showed where G4S were in the pipeline and we gave them the benefit of our experience in terms of how we had kept in touch with our own candidates and gave them lots of advice on how to do that and how to implement that.

Q427 Chair: On the Deloitte report, would G4S have seen a copy of this report?

Paul Deighton: Yes.

Q428 Chair: So they would have seen this paragraph on page 10, "Extremely unlikely that systems and processes, which allows all management information supporting the programme to be completely reliable or accurate, could be put in place"? They would have seen all this?

Paul Deighton: Yes.

Q429 Mr Winnick: The Chair has already referred to the great credit that the Olympics have brought to this country and I join with other colleagues in congratulations. It has been a tremendous effort that has been put in and overwhelmingly the British people are very proud of what has occurred. As far as the position is concerned over G4S, and bearing in mind what has been said by my two colleagues just a moment ago, the fact remains that it was not, as you have said, until 11 July that G4S said they could not undertake what they had committed themselves to. Am I right?

Paul Deighton: That is correct.

Q430 Mr Winnick: What would have been the position, therefore, Mr Deighton and Lord Coe, if there had not been the plans that had been made in such circumstances? I assume they had been made if such circumstances arose, which they did. If there had not been the police and particularly the armed forces to be able to substitute for G4S, what would have been the position then?

Paul Deighton: You have to remember that we had always taken a blended approach to security, so at that point we already had a significant military component. The simple way I would put this is, when you win the right to stage the Games, the government signs a host city guarantee with the IOC guaranteeing to deliver a safe and secure Games. The reason the government does that is because given the scale of the Games and the scale of the resources needed, nobody but the state can really guarantee to provide safety and security. You always start from the position, and then effectively, given the way we do things in this country, given the way the military and the police are committed, we utilised a private security firm to help with the venue security. But you start from the position of it being a state-provided underwriting, because it is too big for anyone else to take it on.

Q431 Mr Winnick: Bearing in mind that G4S virtually told you a fortnight before the Games began, you must have felt acute disappointment, would I not be right?

Paul Deighton: Of course.

Q432 Mr Winnick: That you have been let down?

Lord Coe: It would be remiss of me not to say this at the moment, yes the planning contingency was in place, yes we were able to draw down on the extraordinary commitment of the military and from police forces around the country, but as Chairman of the Organising Committee I am acutely aware that I displaced family plans, the military came to the table, some of them had been on active duty until relatively recently, some were expecting to see more of their families during the summer months. I am very aware of that, and I would put immediately on record my gratitude to the contingency and the planning, and our ability to actually draw down. The military became one of the defining characteristics in the delivery of the Games.

Q433 Chair: So you think the crisis was caused absolutely by G4S, there is no other person or organisation to blame in this? The crisis that you have described, where everything had to change at the last moment.

Lord Coe: It is difficult to look beyond their inability to deliver on the contracted number of security personnel that we were consistently assured by them that they would be able to deliver, until the meeting that you talked about at 8.30 on 11 July.

Q434 Mr Winnick: And wasn’t it completely inexcusable that a firm, which as you say is well-known as large, has so many contracts and certainly not confined to the United Kingdom, could tell you only on 11 July, only some two weeks before the Games started? Wouldn’t you have expected such information to be given well before that?

Paul Deighton: Yes.

Q435 Chair: You had a number of calls, Lord Coe, with the Home Secretary, you rang her on 11 July, did you break the news to her that G4S was unable to deliver?

Lord Coe: Not specifically. It would be a rare week where I wasn’t meeting the Home Secretary on one issue or another related to the Games, and we exchanged telephone calls regularly. I am sure that if a call was made on 11 July, the discussion would have taken place.

Q436 Chair: She said she spoke to you on 11 July, 17 July and 16 July.

Lord Coe: Yes, that is typical of the collaborative relationship that we all had with the Home Office, and personal contact as well.

Q437 Chair: And in the conversations you had with her, you were quite clear on 11 July she had no idea as to what was happening as far as G4S was concerned?

Lord Coe: Yes.

Q438 Mr Clappison: It would be remiss of me if I didn’t say to you both, Lord Coe and Mr Deighton, that all of my constituents who attended the Games, and many of them did, and all who watched on television, said it was absolutely fantastic, they were all looking forward to it, and the Games-both the Olympics and the Paralympics-surpassed their expectations. We can reasonably include in that congratulations credit for managing to overcome this problem which arose at a late stage and to recover the position, so that in fact this did not affect the Games themselves, although it was very alarming that it should have arisen at such a late stage in the planning of it, as far as G4S were concerned anyway.

Can I ask you about the figure you gave of the G4S shortages, the shortfalls that there were at individual events, you have given us a figure of 4% at best, and 35% at worst for the Olympics themselves-and I think you said things improved a bit for the Paralympics-would you have an average figure for the shortfall?

Paul Deighton: Yes. During the Games, the period of 27 July to 12 August, the original demand that G4S were supposed to meet, would have started off at 8,855 on the Opening Ceremony day, peaked at just over 10,000 on 1 August, and then come down by the end of the Games to 7,000 and just under. That is the journey that the demand for them would have taken. Their actually supply against that, just to give you some examples, on the first day we had 6,800 against 8,800, so 23% short. If I just run through the days-

Q439 Mr Clappison: That was on the first day?

Paul Deighton: That was on the first day.

Q440 Mr Clappison: We asked these questions before to Mr Buckles, and I think he said he didn’t know how many were going to come.

Paul Deighton: He may not have done. It ranges from between 4% at best and 35% at worst. The other way I like to think of it is if we get to a shortfall of worse than 15% it creates an operational challenge, we really need some other forces to come in, we can always manage during the day with up to 15% short by just working things out operationally and having people work a bit longer, or having people wait at the queues a bit longer. Typically, during Games times, 62% of the venues had a worse than 15% outcome, therefore requiring deployment of the additional military forces to make sure we were up to scratch.

The problem was at its most extensive leading up to the Games, during the Games we had those kinds of shortfalls, and then it stabilised. When we got to the transition period we typically required just over 4,000 and they supplied them, and during the Paralympics it has been between 4,000 and 5,000 and they supplied it. You very kindly talked about the recovery, and without wanting to self-congratulate everybody, the exercise-and you saw it swing into action very quickly once we heard on 11 July-but the cooperation between us, the Home Office under Charles Farr’s leadership, which was excellent at this point, to give credit where it’s due, and the army under General Sir Nick Parker, who also did an excellent job, the teamwork to solve this problem was actually some of the best work I have ever seen. Credit should be given to that. It is also appropriate to say that even though initially G4S were absolutely in a very difficult position, they continued to work at this, they didn’t give up, and they recovered slowly at first, reasonably through the Games period itself, and then into a stable position during what I have described as the transition and the Paralympics.

Q441 Mr Clappison: I imagine that for a large, public company, a FTSE 100 company, a major contractor with the Government, to produce a shortfall of this extent must have surpassed anything that anybody could have reasonably planned for in any circumstances.

Paul Deighton: Yes.

Q442 Mr Clappison: All the planning that you had to do, this was after 11 July-the steps you had to take to cater for the shortfall, you had to do all of this in this short period.

Paul Deighton: The reason we were able to respond very quickly was because we had a very high quality plan. We knew how many people we needed, we knew where we needed them, we had policies so we knew what they had to do, we had an infrastructure in terms of fences, X-ray equipment, CCTV, control rooms, concepts of operations, a system of command control and communication that had been really well and carefully planned. All that really happened was that the man guard force that was to have been private security guards was replaced by soldiers, so they were able to slot into what was a very well-planned operation.

Q443 Nicola Blackwood: Mr Deighton, you are going on from this particular post to the Treasury, I wonder if this experience has changed your view of the way in which the public sector will engage with the private sector companies, and whether we need to be increasing the capacity of the public sector to deal with this sort of contracting? Obviously this is a special case, but there are some rather large private sector contracts coming up, think of HS2 and some other proposals in the pipeline.

Paul Deighton: My experience of this isn’t particularly theological, it is much more to do with intensive project management, the private/public sector part of it to me-being right in the middle of it-was frankly incidental, what it really made clear to me was that there is no substitute for really good people managing things really carefully and paying enormous attention to detail. That is what this really comes down to. I think in terms of the broader debate, what the experience of the Games has told me-and the experience of security specifically-is that collaboration between the private and public sector can produce outstanding results if it is done extremely well. In fact, getting the collaboration right is half the battle. I don’t think it tells you anything about what should be in the private or the public, it just tells you operationally how you need to go about it to ensure that it is effectively delivered.

Q444 Chair: You will shortly be joining the Government. One of your colleagues yesterday, Francis Maude, was talking about a blacklist of those companies that had not performed properly in Government contracts. Do you think that is a good idea, to actually look at the track record of companies and would G4S be one of those companies that one would be concerned with, given what has happened to yourselves?

Paul Deighton: In making any evaluation you absolutely have to look at past performance, that must be right. You would do that in assessing any new bid for work, so that has to be a part of the programme. The thing I would say specifically about G4S, which I think is most relevant here and we have touched on it already, is that they created a special unit to deliver this project, because this project is unusual in its size and temporary nature. Their inability to get this bit right doesn’t necessarily reflect on the capability across their standard operating business.

Q445 Chair: Sure, it is just your experience of them. If we turn to the issue of costs here, they were involved from the very inception of the Games I understand. You weren’t there but Lord Coe was the Chairman. We understand that they helped prepare the bid, is that right Lord Coe? Were they involved some way on a pro bono basis in providing support for the bid?

Lord Coe: In fairness, I would need to go back to my notes and recollections, but we had a lot of help from all sorts of organisations helping us.

Q446 Chair: If you could do that it would be very helpful. The other thing is, is it right that they paid LOCOG £10 million as part of their sponsorship deal? Is it standard for suppliers to also be sponsors?

Paul Deighton: They didn’t pay us quite that much.

Q447 Chair: How much did they pay you?

Paul Deighton: I think slightly less than £5 million.

Q448 Chair: What was that for?

Paul Deighton: That essentially was to purchase marketing rights, which is a sponsor arrangement.

Q449 Chair: To purchase what rights?

Paul Deighton: Marketing rights, that is what we call the sponsorship. Essentially what we do is conduct some separate negotiations for the supply contract, and we make sure those are absolutely robust and then we conduct separate negotiations for the ability to be a sponsor if they are successful in the supply negotiations.

Q450 Chair: So they have paid you £5 million to be a sponsor?

Paul Deighton: To be a sponsor, so they can market their association with the Games.

Q451 Chair: Excellent. I know you are in the middle of negotiations, so I am not going to ask you the detailed question about how much you are going to ask them to pay you as a result of this breach of contract, that is for you to negotiate. But they have gone public as saying, Mr Buckles said to his shareholders that £50 million would be their losses as far as the Olympics is concerned. Is that still up for negotiations or are you accepting that it is £50 million off the £284 million?

Paul Deighton: Our approach to these commercial negotiations is very straightforward. Firstly, as you said, Mr Buckles has already acknowledged that the company will pay for the police, military and other security providers who were called to step in because of their failure, so he has been clear about that. The second principle that governs the negotiations is that the public purse won’t suffer, and the third principle is that we wouldn’t intend to be paying them for anything they didn’t do. Those will be the three principles.

Q452 Chair: When did you stop paying them? Presumably they have been paid up to a certain date and you have stopped paying them? Would you know how much they have been paid so far, for example?

Paul Deighton: I would. We stopped paying them just after they told us they weren’t delivering. We haven’t paid them since 13 July.

Q453 Chair: Right. Up until then do you know how much you had paid them?

Paul Deighton: I do. It is between £89 million and £90 million.

Q454 Chair: That is all public money?

Paul Deighton: That is all public money.

Q455 Chair: So the rest is up for negotiation, which you will have with them?

Paul Deighton: Yes.

Q456 Chair: Just clarify this issue of the management fee, which was of interest to the Committee. When Mr Reckless and I went round the park, we actually did not see many G4S people, we saw a lot of police officers and a lot of people from the Army. Even the gentleman running the mission control, if we can call it that, was a very impressive former Army officer. There was a managing director from G4S there, but it looked as if somebody else was running everything. What is this fee that you are going to pay him, that the public are going to pay, the £57 million, what exactly is it?

Paul Deighton: The overall contract now is nearer £236 million, down from the £280 million, because we reduced the amount of demand and optimised the requirements. We squeezed down the price before all this happened. Within that £230 million, you are correct, there is what is described as a project management fee of £57 million, which is a little bit misleading because it sounds like it is a profit, it is not. Only 15% of that is their profit, the rest is mostly the wages of the people who were doing all this work to bring in the 10,000 people, who were based in an office in Canary Wharf. These are not the operational people that you see around the park, they were the project people to deliver the 10,000 recruits and train them and make sure they were on the ground ready for us.

Q457 Chair: Right. We have looked at your letter to the Committee-we won’t go into it in great detail-that again is subject to negotiation, is it?

Paul Deighton: Yes.

Chair: Mr Reckless had a point on the Deloitte report.

Q458 Mark Reckless: One point on Deloitte and one other point, if I may. The Deloitte report begins, "1. Purpose of the report. LOCOG wishes to increase awareness and understanding among key LOCOG stakeholders of how G4S are managing their workforce delivery programme, including the processes for identification of delivery risk and the management processes in place to address these". Given that, why didn’t you share this report with key stakeholders such as the police?

Paul Deighton: We did, we shared it with the Home Office, and the Home Office could have shared it with the police, but it wasn’t really that relevant to the police, as I’m sure Chris said: they weren’t day-to-day involved in managing venue security. They would offer us advice about policies to do with things like taking liquids in, but in terms of the delivery of the venue security workforce it really wasn’t their responsibility. So, I don’t think that it’s surprising that the Home Office chose not to share it with them. I don’t think it’s too relevant.

Q459 Mark Reckless: The Games Makers, the volunteers, a huge success-with hindsight, do you think there might have been an opportunity to train up volunteers to do the security work that had been given to G4S?

Paul Deighton: We did have a blended approach, there were 3,000 Games Makers as part of the original 23,700 overall security contingent, so we did up to a point. To take it any further we would have had to put them into security jobs, which would have required security training, and perhaps put volunteers into the kinds of roles that we weren’t entirely sure were appropriate for a volunteering experience.

Lord Coe: And we did actually have an initiative, as you are probably aware, called Bridging the Gap, which allowed us to work with the security industry generally to try to get more young people particularly-6th form, young university students-into that space, which we actually did quite successfully. It also allowed us to target some of the jobs we were committed to in east London.

Q460 Mark Reckless: But why did you feel that a volunteer force would be less appropriate than people brought in on a very short term contract at a low wage, given how successful you were in managing and inspiring your volunteers?

Paul Deighton: Of course this is an easier question to ask in hindsight. We thought hiring the biggest security company in the world, who did this all the time, was probably the safest way. That is, frankly, the honest answer. At the time, we thought that was the lower risk route.

Q461 Dr Huppert: I have another hindsight question. One of the downsides of hiring one supplier to do all of the security is that you are very vulnerable to a single point of failure, as we saw, though it was fortunately covered up and we are very pleased it didn’t go as badly wrong in terms of actual delivery. Do you think it would be better to spread venue security if there were something like this in the future, or with hindsight, across several contracts with different providers, so that one of them getting things wrong wouldn’t cause problems to everybody else?

Paul Deighton: There are three components to the answer. First, in terms of lessons for the future, there really is nothing of this scale. Everything we did was bigger and more complicated than anything anybody had ever done before. Every contract we had, we were challenging our suppliers because they all found this took them to the edge, and in some cases, beyond their capability. It is hard to use it as a lesson. Secondly, we already were diversified. As well as G4S, we had the existing protection of the park that had been in place for some time, we had the existing protection of the village, which came from a different security firm, and we were using incumbents around some of the football facilities. So we were diversified there, as well as the military and volunteers, so it was already diversified. However we did this, people were going to have to go out and hire 10,000 people; these firms didn’t have the people that they would then deliver. What we didn’t want to do was create an environment where four or five different firms were all competing against each other to try to get the same people. For example, in Sydney they did that and what happened at Games time was, they found out that the same people had signed up for four different security firms, so they only had 25% of the people they needed. We thought it was better to control the process and manage it through one supplier who understood what was in the market, where we could also manage the price as you risk bidding against each other, to deliver the numbers. That was the philosophy.

Lord Coe: If I may, just briefly, I think it is also the very nature of the project, the security and transport, in your planning these tend to come towards the end of the project simply because of the incremental, sequential nature of what you are putting together. Eighteen months out, you are still securing a lot of your non-park venues, you are still trying to figure out the thousands of sports competitions, the different sessions, then the integration of training venues, I could go on for a long time, but I think it is-as Paul said-just the unique nature of this project and the incremental, sequential nature of information as it comes to you along the way. I think it is almost impossible to compare this project with any other piece of project management that I know that is remotely comparable.

Q462 Chair: Are you both relieved that G4S will not be applying to do the security at the Rio Olympics?

Lord Coe: I am probably quite relieved we are not doing this again, actually.

Paul Deighton: I am quite relieved I am not doing it.

Chair: No, you are not, and Mr Deighton, can I thank you very much for coming here and for providing us with all the information that we have requested in respect to our inquiry? I am not sure whether you will be appearing for Home Affairs in future, but you will definitely be appearing before the Treasury Select Committee, as a Treasury Minister. On behalf of the Committee, I wish you well in your new job when you take it on, and if there is any other information that you can give us before we complete our report, we would be very grateful to receive it. To Lord Coe, again the thanks of this Committee, very few former members of this House go on to be suggested for canonisation. We are most grateful, and not just to you, as you would be the first to say, as you have said in all your speeches, because it is a huge team. Please pass on the thanks of this Committee to all of those in your team; we are most grateful to you for coming today. Thank you very much.

Paul Deighton: Thank you.

Lord Coe: Thank you.

Examination of Witnesses

Witness: Charles Farr OBE, Director, Office for Security and Counter-Terrorism, Home Office, gave evidence.

Q463 Chair: Mr Farr, welcome to the Committee, we are delighted that this is your first appearance before the Select Committee in public. We very much want the rest of the world to see what we already know, what you look like. Can I start by, again, passing on the thanks of this Committee to all those who were involved in this issue? It has been going on for some time, we know that you chaired the Olympic Security Board for some time, but you cannot ever underestimate the amount of time, effort and dedication that has been put into place by people in your team. We never get to meet people like you, it is always the Ministers of course, but please pass on our thanks to all those involved on the Olympic Security Board.

Charles Farr: Thank you very much, I will certainly do that.

Q464 Chair: However, we are concerned today with the situation regarding the G4S shortfall; can you just remind the Committee, when did you become the Chairman, or the Chair, of the Olympic Security Board?

Charles Farr: I became SRO for the Olympic Safety and Security Programme in December 2008. We created the Olympic Security Board in its current form in May 2009, I chaired the first meeting, and it met from then up to and, in a slightly different form, through the Games.

Q465 Chair: Can we assume that everything that you knew in respect of Olympic security, was also passed on to Ministers on a regular basis? We have looked at the meetings that the Home Secretary has appeared to, she did not go to all the meetings, you did. How would you have briefed the Home Secretary on this-on a monthly, weekly, bi-monthly basis?

Charles Farr: As you rightly infer, OSB was an officials’ group, not a Ministers’ group. There were Ministers’ groups sitting above OSB, to which OSB reported. Some of those ministerial groups were internal to the Home Office, some of them were inter-ministerial groups, and some of them were chaired by the Prime Minister and Number 10 driven. We reported at different times to all those ministerial groups. On frequency, it really depended where we were in the programme. During 2009, on a monthly basis, into 2010 and certainly through 2011, we were into more than monthly, and during 2012 on average at least a weekly basis.

Q466 Chair: As Chairman of the Board, you would see all the reports and all the intelligence that would come into all the various partners, is that right? You would have seen the HMIC report?

Charles Farr: Of course, yes.

Q467 Chair: Did you commission that, because the Home Secretary said that she commissioned it? Or both of you, jointly?

Charles Farr: Yes.

Q468 Chair: So this was your idea. Why did you commission it?

Charles Farr: I talked to Sir Denis in July or August, I can’t remember the exact date, and we had both agreed independently, that a programme of this kind needed as much independent assurance as we could get it. I said to Sir Denis that I thought HMIC had a role here, and I suggested that we set up an assurance team based on a model that we had developed for another previous bit of work that HMIC had done for us. It hasn’t been published actually, but it goes into a sensitive bit of the critical national infrastructure.

Q469 Chair: We understand why you set up, however the conclusions are pretty serious. I am looking at conclusion 6, "The LOCOG security programme is behind schedule. This results from systemic issues which, if left unaddressed, may put aspects of the security of the Games at risk." Just above that, you have a recommendation, "The workforce project requires frequent and intrusive performance monitoring". You then have a second report where there are also serious concerns. There is a Deloitte report that talks about, "No agreed format and content for management information to be provided by G4S to LOCOG". There is a KMPG report, which is also serious. There is a whole series of reports that ought to have really raised alarm bells with you, as Chairman of the Olympic Security Board, and others.

Charles Farr: Perhaps I can just go through very quickly those four reports-two by HMIC, one of course in September and the other in February, then the KPMG report that came out at the end of December 2011, and the Deloitte’s report that came out in April. If I can just deal with HMIC first, very quickly, of course the first HMIC report predated the revised contract with G4S, and the report states explicitly that it is not dealing with G4S per se. Even the second report is dealing, and was commissioned to deal with, LOCOG security capability not with G4S. Of course, the two issues are completely related. After the first report, and you have quoted from it, I spoke to Sir Denis on a number of occasions, and we agreed-and the report sets out-a programme of action, some of which fell to us, some of which fell to LOCOG, so by the time of the second report, we were meeting G4S regularly, at least once a week at my level and other levels much more frequently.

Q470 Chair: Just to help the Committee, this is the February report?

Charles Farr: No, I am talking about actions we took between-

Chair: Yes, you said from February.

Charles Farr: No, from the first report, 30 September, through to the-

Chair: You mean September?

Charles Farr: -second report that came out on 27 February.

Q471 Chair: Excellent. So you were meeting G4S?

Charles Farr: So we were meeting G4S at least weekly through that period, certainly following the contract being signed on 7 February.

Q472 Chair: Who were you meeting at G4S?

Charles Farr: My team was meeting all sorts of different people at different levels, and I think you are aware of the rather complex organisational structure, so at my level, I was meeting David Taylor-Smith in particular, who I think you are seeing later today, and who was for me the Director in G4S responsible for this contract.

Q473 Chair: He was the person you would go to; he was the top guy?

Charles Farr: My counterparty. My counterparty, yes.

Q474 Chair: Yes, and he didn’t tell you from then on until 11 July, which we all accept is D-Day, if you like, that there was going to be a shortfall of people provided for G4S, absolutely no indication that they wouldn’t have the numbers?

Charles Farr: Absolutely not.

Chair: None?

Charles Farr: None.

Chair: So you first became aware of this on 11 July, is that right?

Charles Farr: G4S first told us on 11 July that they would no longer be able to fulfil the contractual requirement for the supply of man guarding during the Games. On 27 June-and I think, Chair, you are aware of this-we first became aware of a problem which at that stage they describe as small scale resolvable and temporary.

Q475 Chair: This is in answer to my question to Dame Helen Ghosh, when she said, "Charles will give you the details"; this is the 27 June meeting?

Charles Farr: Yes.

Q476 Chair: On 27 June, you were told exactly what?

Charles Farr: So first of all, the context. This is an OSB meeting. We were told by G4S-I am trying to remember who it was, and I am afraid the names have gone; it may have been David or it may have been-

Chair: David Taylor-Smith, Mark Hamilton, Nick Buckles.

Charles Farr: I can’t remember. It certainly wasn’t Nick Buckles. It was either David or Mark or Ian Horseman-Sewell.

Chair: Mark Hamilton?

Charles Farr: Yes. I think on reflection it was Ian Horseman-Sewell. I am sorry, my notes don’t tell me, but we can certainly check on it.

Chair: But it is one of those four?

Charles Farr: Ian Horseman-Sewell and Mark, I believe, indicated to-

Chair: Mark Hamilton. Sorry, there are many Marks.

Charles Farr: Yes, Mark Hamilton. So at that meeting, G4S told us for the first time that they had insufficient staff to meet immediate demand at venues, and as you know, Chair, at that stage demand was beginning to increase quite steeply as we approached what we described as venue lockdowns, from that point venues have to be protected and secured.

Q477 Chair: What did you take that to mean? Someone as senior as either David Taylor-Smith or Mark Hamilton or Ian Horseman-Sewell says to you, "We don’t have enough people around in the park to deal with this issue". What did you take that to mean; that there was going to be a shortfall?

Charles Farr: Well, may I go on to explain what they said?

Chair: Yes.

Charles Farr: So it was Ian Horseman-Sewell, I remember now. He warned of what he described as, "A possible temporary shortfall in G4S required numbers,"-I am quoting now-"significantly less than 1,000 from 1 July," and he attributed that to two factors. The first was that although G4S had more than enough people, they weren’t all willing to work before the Games itself began, and secondly, related in a way that wasn’t entirely clear at the time and isn’t clear now, they had a problem with their scheduling machine, their scheduling system software, such that people who were willing as well as ready to work weren’t put into the right slots in the right venues.

Q478 Chair: Sure. 27 June-

Charles Farr: Yes.

Chair: -and what did you do about that?

Charles Farr: I came away from that meeting clear that we had to begin to activate the military contingency force that we had established six months earlier.

Q479 Chair: As early as 27 June?

Charles Farr: That is correct.

Q480 Chair: Did you tell Ministers?

Charles Farr: Of course.

Q481 Chair: So they were aware on 27 June?

Charles Farr: Yes. I mean, I decided that that is what we had to do. Of course Ministers, particularly in Defence, had to confirm that that is what they approved of. So if I can briefly take you through the chronology?

Chair: Sure. Please.

Charles Farr: By 28 June, I had written to the Minister of Defence asking the MOD to be put on 24 hours’ notice 200 from the existing 1,000 military contingency force for the purpose of perimeter guarding duties. Those personnel, all 200, were deployed from 30 June and all of them were deployed by the evening of 4 July. On 5 July, having seen that G4S appeared not to be resolving the problem-

Q482 Chair: They told you this? When you said, "Appeared not to be" did they say, "By the way, we are still not resolving it" or was this just a guess of yours?

Charles Farr: I was basing this on data we were getting from the ground, rather than data I was getting from G4S.

Q483 Chair: Right, so they were not telling you, this is more intelligence?

Charles Farr: I certainly wouldn’t have relied on that by this stage as a single source of truth.

Chair: All right.

Charles Farr: So on 5 July, we notified the Ministry of Defence that we thought we would need 200 more people by 8 July.

Chair: So we are already up to 400 now.

Charles Farr: Correct, and that from 9 July, we thought we might need 325, meaning 725.

Chair: In total?

Charles Farr: Correct.

Q484 Chair: This was a decision that you took?

Charles Farr: All of these decisions went through and the Ministers all were briefed.

Chair: Of course, but independent of LOCOG and G4S, you all had decided to make this-

Charles Farr: Well, certainly independent of G4S. We simply told G4S that this is what was going to happen. The discussions all took place with LOCOG, of course, because LOCOG were fundamentally responsible for venue security and had to schedule these people, or ensure they were scheduled, and that they filled the requirements. My team was certainly involved in that process, because we had a very complex, very urgent task to ensure that not only did we have enough people, but that they were doing jobs for which they were suited and for that there was a requirement. It sounds relatively easy, but at very short notice of course it wasn’t completely straightforward.

Chair: And then?

Charles Farr: So we are up to 725 by 9-

Chair: Yes, and we are up to which date? We are up to 5 July?

Charles Farr: On 5 July I wrote and I was setting requirements out to 9 July. On 6 July, we then put in a requirement for another 1,000 from 15 July, so constantly we are putting on requirements with lead-in time.

Chair: Getting them ready.

Charles Farr: Correct. So we are now up to 1725 people by 15 July.

Q485 Chair: Were you on the call between Nick Buckles and the Home Secretary on 6 July?

Charles Farr: I wasn’t on it.

Q486 Chair: Did you see a transcript of it?

Charles Farr: Yes, absolutely.

Q487 Chair: In that conversation with the Home Secretary, did you see any indication from Mr Buckles that they were going to be short of the numbers that they subsequently were on the 11th? Was there any indication to her that this was going to go off the scale?

Charles Farr: Absolutely none. Absolutely none. At this stage, to be completely clear with the Committee, I still assumed that we were dealing with what had been described to me as a temporary phenomenon.

Q488 Chair: But you were not even waiting. You were getting things ready in case it wasn’t happening. You did not have the situation-

Charles Farr: I was still assuming that although we were deploying these people, we were deploying them temporarily, that we could then reconstitute the military contingency force of 1,000 and the G4S wouldn’t meet the demand with effect from, say, 15, 20 July.

Q489 Chair: Take us now to 11 July.

Charles Farr: So on 11 July at about, from recollection, 11.15 am, I received a telephone call from David Taylor-Smith, who I think was en route to an Olympic Security Board scheduled for 11.30 am.

Q490 Chair: In Canary Wharf?

Charles Farr: No, in the Home Office.

Q491 Chair: So he had already been to the Canary Wharf and told LOCOG that he didn’t have enough?

Charles Farr: Yes, indeed.

Chair: Then he rang you at 11.30 am.

Charles Farr: Then he rang me and he said, "Look, I am going to come to OSB and I am going to be saying to you, ‘I don’t think we can deliver this’". It was a hurried conversation for two reasons.

Q492 Chair: That is what he said, "We don’t think we can deliver this"?

Charles Farr: Yes. I mean, I can’t remember the exact form of words, but that was clearly the message. I then said to him, "Well, in that case, of course you recognise we are going to have to bring in more contingency." I asked him whether he agreed with that course of action and he confirmed that he would and he did, and that he would do exactly the same in my position.

Q493 Chair: When you heard that piece of news, you were not at all surprised, were you, because you had already made the contingency, so he wasn’t telling you anything devastating, you had already prepared yourself?

Charles Farr: He wasn’t telling me anything devastating, but I was surprised, because remember that at that stage I was still assuming, in line with what Nick Buckles had told the Home Secretary, not once, of course, but at least twice -

Chair: 6 and 10 July, yes.

Charles Farr: -on the 6th and the 10th that the contract would be fulfilled.

Q494 Chair: So you must be more than surprised. You must have been pretty shocked, if you are allowed to be shocked in your position.

Charles Farr: I don’t think you are allowed to be shocked. So you are surprised and discomfited.

Chair: Discomfited?

Charles Farr: Yes.

Q495 Chair: Right, okay. Very, very Home Office. After your discomfort, what did you do?

Charles Farr: I walked along to the Home Secretary’s office and asked to have a quick word. We had a quick word. I told her about the conversation I had just had. I was about to go into the Olympic Security Board and we agreed to discuss what action we would take after the board finished.

Q496 Chair: Had Mr Taylor-Smith arrived by then?

Charles Farr: Yes, in another bit of the building, so there was a sort of choreography.

Q497 Chair: So you took the decision basically with the Home Secretary, "We just have to get more people in"?

Charles Farr: No, I didn’t take it then, because I wanted to hear what David said at the meeting.

Q498 Chair: But you had authority if you needed?

Charles Farr: No, I didn’t ask for it, not at that stage. I said I wanted to hear it in detail rather than on a five-minute phone call and also get the views of everyone else round the table. The military of course were represented.

Q499 Chair: You are being very clear. This is my final question to you, that this was a failure of a supplier to supply what they promised to supply at a given date?

Charles Farr: Completely.

Q500 Chair: That there is no other person, no organisation responsible, that LOCOG has no responsibility for what went on, that even though there were reports that had been written, this was G4S coming to you at 11.15 am on 11 July and saying, "We can’t deliver"?

Charles Farr: Yes. Of course-and we talked about it earlier-there were reports written, two by HMIC, one by KPMG and one by Deloitte. The key point is that at no point in the discussion of those reports did G4S ever indicate to us that the problems were such that they could not deliver the contract. I don’t want to suggest to you that there were no problems with the contract before 27 June. Of course there were issues we were dealing with. A contract of that size, inevitably there would be. We were trying to do a very big operation.

Q501 Chair: But not of the nature of what you were told on the 11th?

Charles Farr: Not fundamental to their ability to meet the contract during the Games.

Q502 Mark Reckless: You say nothing appeared before 11 July to suggest that G4S would be unable to meet the terms of that contract, but is the Deloitte report of 11 May not really sufficient on its own to show that it was unlikely that G4S were going to meet its contracted commitments?

Charles Farr: That is not what the report says, of course.

Q503 Mark Reckless: It is pretty close to it, is it not?

Charles Farr: No. Personally, I’m afraid I disagree with that. I think it is a very good report, firstly. Of course, it was commissioned by LOCOG and I first saw it on 26 April, I think, and we discussed it with Ministers on, by the way, 8 May and wrote to them summarising it and explaining what we thought was the significance of it was.

Q504 Mark Reckless: So Ministers saw this three days before it was published?

Charles Farr: I saw a draft on 26th, 27th. I don’t remember the exact date. We discussed it with Ministers on 8 May. We submitted to Ministers, the Home Secretary and James Brokenshire and we went through it in some detail, recognising obviously, as you do, the real importance of some of what it was saying, and although I don’t entirely agree that you could infer from the report that the contract couldn’t be met, I absolutely agree that the report said very important things, notably about the quality of the management information in G4S. Of course what then happened was that G4S and LOCOG discussed this report-and I am sure Paul Deighton has discussed this with you-and agreed a completely new set of management data and a new format for presenting it.

I may add that it wasn’t news to us that the management data provided by G4S needed tightening up. At an OSB, at the beginning of April I had said to G4S as they went through the figures that although superficially they were compelling and optimistic, in some areas they didn’t stack up and they needed rearranging and representing to us. So what Deloitte said we had already inferred from what we had seen of G4S data in the preceding months. But I come back to my point, if I may, that I don’t take from the Deloitte report that the contract could not be fulfilled.

Q505 Mark Reckless: But you wouldn’t accept even now that the 8 or 11 May Deloitte report should have been a basis for more intrusive monitoring than occurred of G4S and what it was doing to ensure delivery?

Charles Farr: No, I absolutely agree it was a reason, a reminder of the need for intrusive monitoring. I am unclear how more intrusive we could have been, certainly from the Home Office.

Chair: Because that reflects the words that you were given by Sir Denis in September, those were his words.

Charles Farr: Absolutely, and I took them on board and, in my view, our performance had fully reflected what Sir Denis had recommended to us both in September and then in February.

Q506 Dr Huppert: It is good to have you in front of the Committee. It has been reported in the press that there are unnamed G4S sources who tell a slightly different story, that there is one thing here where they have told the journalist that they had given you and the Olympic Security Board total visibility on the preparation for the Games before 11 July. Just to be clear-and obviously I don’t know who said this, I cannot verify it-if that is what they are saying, you would say that is completely untrue?

Charles Farr: I don’t think it is true, no. I mean, we were given sets of data- and I am very happy to explain some of that data to you if it would be helpful-which gave no indication whatsoever even as late as 1 July, after 27 June, that there was going to be a problem fulfilling the contract, and that data was what G4S relied on to explain the progress of their programme. So insofar as that data now appears to have been inaccurate, it follows to me that they were not completely open about the nature of the progress they were making.

Q507 Mr Winnick: What would you say, Mr Farr, if you leave aside the reports which have already been mentioned, that what you were told on 27 June should have given you some indication that problems would arise, warning bells should have been made or rang or whatever expression one uses, and it didn’t occur to you at the time?

Charles Farr: No. I think, with respect, warning bells were ringing but on the other hand, I had very clearly in my mind, as did everyone around the OSB table, a very clear statement from Ian Horseman-Sewell that these were temporary problems affecting short-term deployments that would be fixed, a statement of course reinforced by the subsequent conversation between Nick Buckles and the Home Secretary. So we activated a military contingency. We took it very seriously. Of course we were concerned, but I also had to listen to what G4S were telling us about the longer-term confidence they had that the contract would be fulfilled.

Q508 Mr Winnick: Hindsight, as we are always told, is a remarkable thing to have, but on reflection, wouldn’t it have been better if there had been more probing after what G4S told you on 27 June?

Charles Farr: Perhaps I can go back to that date. On 27 June, we had an Olympic Security Board meeting at which we talked in some detail about this issue. There was then, immediately following that, a Venue Security Delivery Board where G4S went over the data again. I would think that those two meetings lasted four hours and I think there comes a limit beyond which you cannot go in a meeting and with a governance arrangement of that kind. I am satisfied that we asked every reasonable question of G4S, both at OSB and later that day at VSDB.

Q509 Mr Winnick: What is your view of G4S in letting the organising people and yourselves down in such a way?

Charles Farr: Clearly we were disappointed that an otherwise, in my view, really outstanding performance on safety and security was somewhat marred-somewhat-by their failure to deliver one part of a very big programme, and it was disappointing. It disrupted, it put the military particularly, and military on the ground, at a degree of inconvenience, which was clearly very regrettable.

Q510 Mr Winnick: Is it not the case that if there hadn’t been the contingency of the military and the police, chaos could well have occurred instead of the remarkable triumph which has occurred arising from the Olympics?

Charles Farr: It is speculation, isn’t it? I do not think we would have ever permitted chaos to occur and I am sure that we would have found ways to have avoided that.

Chair: Thank you. We will accept that.

Q511 Michael Ellis: When, Mr Farr, you are the Director of Security and Counter-Terrorism, and it is a heavy responsibility-and can I start by saying that clearly in the end that responsibility has been successfully discharged, and I congratulate you and your team for that, and the successful results for the Olympics-can I just then come back to this whole issue of G4S? I asked LOCOG this question, Lord Coe and Mr Deighton, about the flashing amber lights, they felt that they had a couple of weeks before 11 July some slight indications of problems arising and they described it as, "Flashing amber lights but no alarm bells ringing". But they were reassured; they were given reassurances by G4S that these were little SNAFUs which could be resolved. Did you have any such indications yourself, or were they more of a concern to you or less of a concern?

Charles Farr: So from 27 June, I was concerned. As I have said, I was still accepting at face value the repeated commitments that the contract would be fulfilled and that the problems we were dealing with were temporary, but any time you call on your contingency force, of course you are concerned.

Can I remind you of the statistics that we were being given support the claim made by G4S that they would still deliver this contract, so as late as 1 July I was given data as part of the normal process of sharing? 37,000 people had passed the G4S interview to go into the venue security workforce. 25,000 had been security screened. We had accredited 21,000 people. Remember, the requirement is less than 15,000. 14,700 had been SIA trained. By 1 July, 9,000 were ready to work, an increase of a little bit over 2,000 on two weeks previously. The data they were giving us reinforced, at least on the face of it, the message they were-

Michael Ellis: Very reassuring, and it emphasises it is a gargantuan and it was a gargantuan operation.

Charles Farr: Yes.

Q512 Michael Ellis: So as far as G4S’ latter conduct in the weeks prior to 11 July was concerned, would you consider that they had, perhaps unwittingly, but nevertheless misled in reassuring that things were going to be generally okay, with one or two perhaps minor exceptions? Would you say that the Government and security apparatus had been misled or LOCOG had been misled or was it just incompetence by G4S management?

Charles Farr: You know that Pricewaterhouse is doing a bit of work for G4S on this, and I have tried to understand exactly what went wrong in advance of their report and we have looked at that in some detail with colleagues as well. It is really hard to put it together. It shouldn’t be, but it is. The data was clearly misleading, at the very least. I think beyond that, there were systemic problems about data quality, which made some of the projections unreliable, and that became clear of course after 11 July.

Q513 Michael Ellis: Do you think this may boil down to an IT-type problem?

Charles Farr: The short answer is I don’t think any of us know. I think at least, as described to me, a software problem with the scheduling system towards the end of June, around 27 June, was a contributory factor. My personal view, and I may well be wrong about this, is that the software reflected a problem with the underlying management information and that the software could only be as good as the information which was put into it, but those two issues are obviously connected, and to some degree they are both responsible.

Q514 Michael Ellis: Right. Now, as far as the military are concerned, people, as I am sure you know, enjoy seeing the military in this country and they find it reassuring, and the military contribution to the Games has been widely praised and for very good reason. Was any consideration given to using Her Majesty’s Armed Forces for venue security in the early stages of planning rather than contracting out to a private provider?

Charles Farr: From the middle of 2011, it was clear to us that demand for security guarding was much higher than had previously been estimated, somewhere in the region of 20,000 people. At that stage, we went to both the police and to the military to discuss what contribution they could make to venue security. The police said to us from the outset that they could not help, because their resources were devoted to other Olympic commitments which only they could do. We accepted that and moved on. We went to the military, LOCOG, by the way, having proposed that the military should be used to stiffen the back of the venue security guard force, a proposition which I immediately accepted, along with others around the OSB table. We then discussed numbers and there was quite a lot of exchange between Ministers and officials in the summer and autumn of 2011 about appropriate military numbers. We were informed that the military could not provide more than 7,500, which was agreed of course without consequences for projected and actual commitments.

Q515 Michael Ellis: So you were advised at that point that there would be a certain level beyond which the military would clearly suffer some consequence and so that featured in your planning?

Charles Farr: Yes.

Michael Ellis: Okay. Thank you, Mr Chairman.

Q516 Chair: Thank you. Can I just ask you, just pressing you on the point that Mr Reckless made, and indeed in answer to Mr Ellis’ question, you talked about confidence in the data. Obviously you cannot give us a definitive response, but you used those words, but these are the same words that were used in the Deloitte report. It says, "It is difficult to offer a high degree of confidence that the data figures provided in the final reports to LOCOG present an accurate picture of reality".

Charles Farr: Correct.

Chair: This is repeating what we knew in May.

Charles Farr: But after the Deloitte report, G4S completely revised the presentation of their data to us and we were reassured or assured by them and by LOCOG that it accurately reflected the advice which had been provided to them by Deloitte.

Q517 Chair: Even though it was still wrong, as you discovered subsequently?

Charles Farr: Indeed, but at the time we took a spreadsheet, rather complicated, lots of data on it, and we were informed this was accurate and that the principles behind its arrangement and organisation accurately reflected the Deloitte recommendation.

Q518 Chair: How many civil servants were involved with you in this operation? Obviously you were there at the top as Chairman, but how many Government officials were dealing with Olympic security?

Charles Farr: In the Home Office, speaking from recollection, the Olympic Security Directive, part of OSCT, was somewhere between 90 and 100 people, maybe a little bit over 100 on certain occasions. Across the rest of Government, I couldn’t-

Chair: So about 100 in the Home Office were dealing with these issues?

Charles Farr: In the Home Office, yes.

Chair: One hundred people?

Charles Farr: Correct.

Q519 Nicola Blackwood: You made some interesting comments on what you think might have gone wrong in terms of the management systems and the data to Mr Ellis, but I wonder if we could just talk about the comments on scheduling, because in evidence just before, Lord Coe said that this was a very unique project and the sequencing meant that perhaps some of these problems arose as a result of the fact that the problems emerged late in the day. So the scheduling could only emerge close to the event when it was necessary to deploy security guards to venues, and allocate individuals to certain places from the database. What I am trying to ascertain is was it that we couldn’t test the system until close to the need to use it? Was it not possible to find out that the scheduling was going to be a problem until 27 June? Should one of the four reports have discovered that this scheduling was going to be a fatal flaw or not or was it just that we were only going to find out then and that was why we had a contingency of military and police personnel who did perform so fantastically?

Charles Farr: So there are a few questions there and some of them-

Nicola Blackwood: Sorry.

Charles Farr: -I am sure you will ask G4S. In summary, first of all, the G4S scheduling system software that was used for the Olympics was a proven system, so we were informed, which was used regularly as part of every G4S contract on man guarding, and they call it SigNet, and I am sure they will discuss it, if they haven’t already, in their evidence session. Secondly, that system for the Olympics, as I understood, was being tested to some degree certainly in April and May and scheduling as a principle was raised not in detail and certainly not as a problem in the various supervisory boards which we have been discussing. Thirdly, I think it is the case that G4S didn’t want to load the scheduling system with all the data about their workforce until June, certainly, and that was inevitable because the workforce was still coming on stream until that point, so it was quite late in the day. But we were reassured that it was a proven system, that they were the world’s biggest security company, that they’ve used the system time and again as part of their routine business, and it simply was not presented to us even as a risk, and I had to accept that in the absence of any information to the contrary.

Q520 Nicola Blackwood: So you were reassured on the basis of reputation rather than on any specific-but none of the reports have dealt specifically with this issue in the context of this project.

Charles Farr: I wasn’t reassured just on the basis of reputation. I was reassured on the basis that we were dealing with a proven system, SigNet, which G4S use all the time in their day-to-day business in this country and around the world. So it seemed to me reasonable-and clearly to others reasonable-that we could at least count on that.

Q521 Nicola Blackwood: Yes, so the scheduling wasn’t seen as any kind of risk?

Charles Farr: The scheduling system was not seen as a risk. Scheduling is about more than software. It is about the quality of the management information that goes into it as well. I am emphasising that the IT programme was proven and not bespoke for the Games.

Nicola Blackwood: Yes, but I was talking not just about the IT programme, but all of the problems which arise from the 27th.

Charles Farr: Scheduling certainly in the overall sense, management information plus software plus whatever else it took to arrange, wasn’t presented to us as a risk and indeed it was presented us to us as a challenge that G4S would be used to dealing with as part of their day-to-day operation. LOCOG, of course, as well were at the same time scheduling 70,000 volunteers, so when we looked at how that was working and we could see that the numbers scheduled by G4S were vastly less, it also seemed reasonable to assume that that bit of the programme was going to work.

Q522 Nicola Blackwood: So my question is do you not think that it should have been possible to identify this problem earlier on the part of G4S and if they weren’t identifying it, on the part of an assurance programme which included four reports and daily meetings in 2011 and so on?

Charles Farr: Clearly we would have expected G4S to identify for us a risk with scheduling and any problems way in advance of 27 June.

Nicola Blackwood: Right; thank you.

Q523 Chair: Thank you. Mr Farr, can I ask you a question about counter-terrorism? We have taken all your evidence on the Olympics security, which we are grateful for. You are head of counter-terrorism in the Home Office and the issue where counter-terrorism should sit is being considered by the Home Secretary. Do you have a view as to whether it should be part of the National Crime Agency or not?

Charles Farr: I am going to give you a rather boring answer, I fear. I think we need to go through a review process to determine that. There are pros and cons and I think they are rather finely balanced, but a review process needs to take place to determine which way we should go.

Q524 Chair: Obviously on this day of all days, because of the anniversary of what happened in America, it is clear that during the Olympics, it worked, didn’t it? As far as we are aware-of course, you will have all the information, because it will be given to you in confidence-all the security issues were dealt with brilliantly during the most difficult time possible for your officers and for the Government.

Charles Farr: It is a really important point, if I may, that the entire Olympics safety and security programme depended on the machine that has been developed in this country to deal with terrorism since 9/11. We have talked, and you are rightly and understandably focusing on one aspect of the safety and security programme, but there is an enormous amount else. We had 11 major programmes. We are looking in this evidence session at one part of one, and the rest build on the steady state investment and capabilities which have been developed over the past 10 years. Counter-terrorist policing is just one of those. It is clearly a very, very important one, and any Minister, any official looking at future arrangements is going to have to think very, very carefully before changing a system which has served us very well.

Chair: Mr Farr, thank you very much for coming in. I repeat what I said at the beginning. There were a lot of officials at the Home Office involved in this activity. They have performed exceptionally well and you have delivered a safe and secure Games. As Chairman of this Committee, obviously if something had gone wrong, we would not be saying this, but something has gone right and we would like to congratulate you and your colleagues for what they did, despite the crisis over the shortfall in numbers. Please pass on our thanks, the thanks of the Home Affairs Select Committee to all those involved.

Charles Farr: Thank you very much. Thank you.

Examination of Witnesses

Witnesses: Nick Buckles, Chief Executive, and David Taylor-Smith, Chief Operating Officer, G4S, gave evidence

Q525 Chair: Mr Buckles, Mr Taylor-Smith, thank you very much for coming in today to give evidence to this Committee. Can I just clarify one point for the purposes of the record, Mr Buckles? At the last meeting of your shareholders, I think you were announcing your results, you made some comments about the Select Committee and your appearance before this Committee-you could of course have been misquoted, it is perfectly possible, people are misquoted in the media from time to time-you stated that you would not be answering any questions of the Select Committee, or that is what the journalists have written, because of your internal PwC report. Are you clear about the difference between an internal PwC report and a report of the Select Committee of the Home Affairs Committee today?

Nick Buckles: Yes. What I said to you and what we wrote to you after the last Home Affairs Select Committee, that we would be embarking on the review as soon as we had finished the Paralympics Games. Our main priority, our main focus was going to be delivering on the Olympics security. That was our number one primary concern. So we have started the review.

Chair: No, sorry, I understand. I will come to the review in a second.

Nick Buckles: But what I’d like to say is I am very happy to answer your questions, but the fact is I can’t really express opinions on some aspects of what has gone on until we have the results of that review, because it would be absolutely wrong of me to do so, but I will try to be as absolutely helpful as I can.

Chair: Excellent, because on the last occasion you were extremely helpful, and that is what Select Committees of the House expect. Of course private companies can conduct any reviews that they want, but if Parliament holds an inquiry, people are obliged to co-operate. Failure to co-operate obviously is a contempt of the House.

Nick Buckles: Absolutely.

Chair: I know that was not the intention of what you said.

Nick Buckles: All I said, I had to be limited in expressing opinions, because it would be wrong on behalf of my board to prejudge the outcome.

Q526 Chair: Of course. We understand that. Also, I think Mr Neil Woodford, who is the main investor into G4S, described your appearance on the last occasion as you being persecuted. You don’t feel persecuted, do you, Mr Buckles?

Nick Buckles: No, I felt it was a very invigorating experience.

Chair: Excellent, that is pleasing. Perhaps you can tell Mr Woodford that.

Mr Taylor-Smith, thank you very much for coming in. Can I just say the Committee wanted to call you on the last occasion, but we accepted representations made to me by a number of very senior figures that you had your job cut out for you in delivering the Olympics and they asked that we don’t call you give evidence until after it is completed. That is why you were not here on the last occasion. But can I thank you both for coming here today. We are most grateful for your co-operation.

David Taylor-Smith: Mr Chairman, can I just thank you for that decision, because I was knee-deep in trying to lead the operation to recover our performance?

Q527 Chair: Excellent. Now, we have established Mr Buckles’ position in the company. He is the Chief Executive of the global company, so he wasn’t aware of the detail of what was happening on Olympic security. However, you were the Chief Executive, as I understand, and you still are, of G4S in this country. Is that right?

David Taylor-Smith: Sir, I am the group COO and I have responsibility for our operations in UK, Ireland and Africa, so I am completely accountable for the UK, and from the first week of July, I have been directly leading the Olympic programme.

Q528 Chair: The questions that we put today are related to the evidence given by other stakeholders. We have taken evidence today from Charles Farr, the Commissioner, Chris Allison, Lord Coe and Paul Deighton, and we are going to ask you questions that are in your knowledge. If you don’t know the answer, we are quite happy to accept "We don’t know," and write to us after the session. So we are going to ask you about your own knowledge of what was happening.

Had you ever seen before 11 July or before you took over on 1 July the inspector’s report that had been written by Denis O’Connor on 11 September last year and the report that he wrote in February of this year, and had you ever seen the KPMG report or the Deloitte report?

David Taylor-Smith: So there are four reports you referred to, the two HMIC reports and the KPMG report. We were never given access to the findings of those. The Deloitte report we were completely involved with reviewing the findings of that.

Q529 Chair: So you hadn’t seen Sir Denis’s reports?

David Taylor-Smith: Absolutely not.

Q530 Chair: Nobody told you what was in them?

David Taylor-Smith: Absolutely not.

Q531 Chair: You hadn’t seen a report by KPMG?

David Taylor-Smith: That is correct.

Q532 Chair: Nobody had told you the conclusions?

David Taylor-Smith: That is correct.

Q533 Chair: But you have seen the Deloitte report?

David Taylor-Smith: Absolutely.

Q534 Chair: Okay. Are you surprised now, given the fact that this matter is in the public domain-I am sure you saw a transcript of the evidence with Sir Denis O’Connor-that you didn’t see those previous reports, that information was not shared with you as the UK Chief Executive?

David Taylor-Smith: So I have obviously been running the operation until 19 hours ago, so I have not been able to review all the documents containing-

Chair: No, not now, I am talking about prior to this, not what you have been doing since 11 July, but prior to 11 July, because your name came up in testimony. You are the person who delivered the news to Charles Farr and to Paul Deighton. That is what they have told us today. Prior to 11 July, are you surprised that these reports were in existence?

David Taylor-Smith: If they had had relevant points to make about our performance or how they can be improved, I would judge it would be advantageous to let see those and have access to that.

Q535 Chair: But you did see the Deloitte report?

David Taylor-Smith: Absolutely.

Q536 Chair: So perhaps we could look at what the Deloitte report said, since you have seen it, and you had seen it before 11 July. It said, "Management information remains a key underlying issue. Access to consistent and reliable information has created a challenge." It goes on to say that, "No agreed format and content for management information has been provided by G4S to LOCOG." There are various other sentences I can pick out, but this is a short evidence session. I think we could take it as read that most of this is highly critical of the information that you were providing. When did you become aware of this?

David Taylor-Smith: Of the report?

Chair: No, of these findings. You said you had read this before.

David Taylor-Smith: If I may, Mr Chairman, I think it would probably be useful for the Committee to describe the processes that an individual had to take in order to get into the Olympics.

Q537 Chair: No, we don’t want to hear that yet. We would be very fascinated to hear that in a moment, at the end, but just for the moment, given the criticisms in the Deloitte report, why were they not acted upon by G4S? I am not asking about the other ones, because you are saying very clearly to this Committee-and I am grateful for your honesty and transparency-you had no idea what was in the previous reports, but Deloitte you knew about it, so why didn’t you all take action to ensure that the information that you provided to LOCOG was accurate?

David Taylor-Smith: As soon as we received the report, we worked collaboratively with LOCOG. The Managing Director who was leading the programme and his boss, I remember we spent the weekend working with them collaboratively on it.

Q538 Chair: Do you remember roughly when that was, because this is May, isn’t it?

David Taylor-Smith: I don’t have the precise date. It was the end April, early May, I think it was.

Chair: Yes. I think that it couldn’t have been before. It couldn’t have been April, because the report is dated May.

David Taylor-Smith: Again, Mr Chairman, I am sure you are right. As I say, forgive me, because of what I have been up to.

Q539 Chair: Yes. So you spent the weekend with them. Who did you spend the weekend with?

David Taylor-Smith: The team worked with LOCOG to review the findings of the report, which had two main thrusts, which were around the management information and around programme management, and then from that date we started to report the information in a different way, but if I may, sir, I think it is useful just to point out the steps the individuals need to go through because that is the root cause.

Q540 Chair: We will come on to this. We just want to deal with the global issues, then individual questions, then we certainly will come on to that. So you discussed it with them. Did you implement the recommendations in the Deloitte report or did you make sure-

David Taylor-Smith: We did.

Q541 Chair: So you were quite confident that everything that Deloitte asked for was given?

David Taylor-Smith: Absolutely correct.

Q542 Chair: Because we have just heard testimony, and to be fair to you, you didn’t hear Charles Farr’s testimony, is that he felt that the data that you were putting forward even up to 1 July was not accurate. Now, does that surprise you, that the Chairman of the Olympic Security Board was even questioning your data right up until the time that you told them that you didn’t have enough people?

David Taylor-Smith: Sir, if you would allow me to answer, to describe the process.

Q543 Chair: We will come on to the process in a moment. If you could just answer the question. Are you surprised that Charles Farr still had concerns? We understand the process, we will come on to the process, but is it a surprise to you that the Head of the Olympic Security Board still was questioning your data by 1 July?

David Taylor-Smith: The data we were presenting to the client, which was agreed jointly with the client, what we would review on a weekly basis for all stakeholders, came from a number of multiple sources to reflect the complexity of the recruitment process, and we were fully presenting that to the client on a weekly basis and that was the basis that we were reviewing our performance internally and externally.

Q544 Chair: You were very confident in that data?

David Taylor-Smith: Absolutely.

Q545 Chair: So on 27 June, when I gather you went to the Olympic Security Board, you started to raise issues concerning numbers, is that right? The Home Secretary told us last Thursday and Charles Farr and Paul Deighton told us today that the first relevant date for us to consider was 27 June. There were scheduling problems, I understand. Is that right?

David Taylor-Smith: Sir, I did not attend an OSB meeting on that date. The Managing Director of the Olympic operation did.

Q546 Chair: Who was that?

David Taylor-Smith: Mark Hamilton.

Q547 Chair: Right. Is he still with the organisation?

David Taylor-Smith: He is, yes.

Q548 Chair: Was he running matters from 11 July or did you take over the day-to-day running of things?

David Taylor-Smith: I took over the day-to-day running at the end of the first week in July.

Q549 Chair: Mr Hamilton was asked to step aside for the purposes of that or worked with you?

David Taylor-Smith: Mr Hamilton ran it until 3 July. Mr Hewitson then ran it for a few days and then I stepped in so we could bring access to all group resources that were needed on around 6, 7 July.

Q550 Chair: Mr Buckles, in his very helpful evidence to us on the last occasion, said he was on holiday abroad on 3 July when you rang him and told him that there was going to be the shortfall, the shortfall meaning that you were not able to meet the conditions of your contract. Is that right? Did you ring him on 3 July and tell him?

David Taylor-Smith: Over the weekend of the 30th, I was in contact the LOCOG and with our management team running the operation. The management were expressing confidence on the 30th that they would be able to meet the uplift in the first week of July. That is what we were focusing on. On the Sunday, they then called me to say they had some concerns.

Q551 Chair: Who is "they"?

David Taylor-Smith: This is the Managing Director of the operation, Mark Hamilton.

Chair: Mark Hamilton, right.

David Taylor-Smith: Doug Hewitson-

Chair: Sorry, who was the other person?

David Taylor-Smith: Mr Hewitson. He is his boss. He was on site reviewing the situation. By the end of-

Chair: So Mark Hamilton reports to Doug Hewitson-

David Taylor-Smith: That is right.

Chair: -who reports to you?

David Taylor-Smith: Who reports to me and I report to him.

Chair: Right, okay. So Doug Hewitson rang you and said, "We are not going to have the numbers ready".

David Taylor-Smith: To say, "We have concerns", to which I then immediately went to the Olympics, assessed that on the 2nd. By the 3rd, I then phoned Nick and said, "I think we have some issues". It was difficult for me to fully size what those issues were then.

Q552 Chair: Right, so you told him the issues were, "We are not going to have enough numbers". I mean, "issues" is very vague. Did you tell Mr Buckles, "We are not going to have enough numbers by the start of the Olympics"?

David Taylor-Smith: It was clear on 3 July that we would have a problem meeting the uplift in the first week of July.

Q553 Chair: No, I am sorry, I don’t know what that means, "the uplift in the first week of July". Could we just be clear, were you going to have enough numbers in the first week of July as per your contract? Is that the issue?

Nick Buckles: Could I just give a little bit of clarity there?

Chair: Of course.

Nick Buckles: There was a big uplift in requirement on the first weekend of July. We had been running at about 2,000 staff and we needed 3,500 that weekend, and thereafter, the ramp-up, as we call it, or the steep increase in numbers of staff, went from 3,500 to 10,000 by the end of July. Just to put that in perspective, we do need to employ 50% more staff than those numbers to deliver on those numbers.

Q554 Chair: You told us that very helpfully last time. So what Mr Taylor-Smith was telling you in the phone call is, "We don’t have enough numbers to meet our obligations".

Nick Buckles: No, what we were saying at that stage was we had had shortfalls over the weekend, which had come about through the steep uplift in staff requirements and that we were struggling to see in the short term we could meet those numbers as they started to increase quite rapidly.

Chair: On 3 July?

Nick Buckles: Correct.

Q555 Chair: On 6 July, you spoke to the Home Secretary in a minuted meeting?

Nick Buckles: Yes.

Q556 Chair: Why didn’t you tell her this?

Nick Buckles: In that meeting, I said that we’d had problems meeting the staff numbers in the short term and I said we had had a scheduling problem, and that over that weekend, the 7th, 8th and 9th, we would be working hard to make sure that we rescheduled all the staff, and we were confident that we would get that scheduling done, and that is exactly what we did do, and then that was when it started to highlight that we had staffing issues against the demand.

Q557 Chair: I think it was very clear from the evidence you gave us on the last occasion, Mr Buckles. You can look at the transcript. You were very clear in your mind that Mr Taylor-Smith had rung you on the 3rd to tell you there were problems about numbers. You didn’t tell the Home Secretary that, did you? You talked about scheduling problems.

Nick Buckles: I mean, I certainly said we were having problems with numbers, because we knew at that stage we weren’t meeting the demand requirements.

Chair: You are quite clear that you told the Home Secretary that you had problems with numbers?

Nick Buckles: We weren’t meeting the numbers.

Q558 Chair: You spoke to her again on 10 July and you said to her again the day before you said that you weren’t able to fulfil your contract?

Nick Buckles: Yes, on 10 July, we’d run scheduling that morning, overnight. It was the first time that we had had a chance to run scheduling against the latest demand and what I said to the Home Secretary, I would arrange to call her or meet her on the 10th to say whether scheduling was successful or not. At that stage, scheduling was successful, it worked, but it was after that that we started to get into the real detail of the numbers of staff we would have for different locations, and remember, we were rostering staff to 110 locations with 49 different skills.

Chair: Sure.

Nick Buckles: That was when we started to realise we really were looking at some serious problems.

Q559 Chair: So between the time you had your conversation or your meeting with the Home Secretary on the 10th, and 8.30 am on the 11th, that is when you realised you didn’t have enough numbers?

Nick Buckles: We were working very long hours at that stage.

Q560 Chair: Yes, your long hours, thank you very much for that, but is that when you discovered that you wouldn’t have enough people?

Nick Buckles: That is right.

Q561 Chair: So you didn’t tell the Home Secretary that you had enough people on 6 July, and you did not tell her there was a problem with numbers on 10 July. The only time you told the Government was on 11 July?

Nick Buckles: That was when we finally said, "We can’t see a way we can achieve the contracted numbers," after many hours of debate and deliberation internally.

Q562 Chair: Hence Mr Taylor-Smith’s call to Charles Farr, is that right? Do I have the sequence right?

David Taylor-Smith: Sir, you have the sequence right. I mean, if I can just describe though every time we analyse the data, we were doing that jointly with the Government.

Q563 Chair: Sorry, which part of the Government? With Mr Farr?

David Taylor-Smith: So we were doing it with Mr Farr and members of the OSB, the Olympic Security Board, and taking joint decisions based on the data that we had available so the decision where we said on the 11th, "Look, we cannot guarantee that we can deliver the numbers," was a joint decision based on the best available data that we had at that moment.

Q564 Chair: To be frank with you, Mr Taylor-Smith, you haven’t seen the evidence that we have heard today. None of them agree with you on this. They don’t talk about a joint working relationship of any kind. They said you told them that this was the position, you told Mr Deighton at 8.30 in the morning, he described where he was, and then you rang Charles Farr at about 11.15 am and you ended up in London at the Olympic Security Board. Nobody has described this joint working relationship that you are just telling the Committee about. They are very clear this was a private sector contract worth £284 million and they expected you to deliver, as the biggest security company in the world, and certainly the evidence given by Mr Buckles on the last occasion to this Committee, no joint working arrangement was told to this Committee. It was all about you could deliver. This was your responsibility, was it not?

David Taylor-Smith: So to be 100% clear, it was entirely our decision and it was based on our inability to deliver the required numbers and we were completely clear that that was our assessment. Based on that, we then contributed to a collaborative discussion on how best to mitigate that.

Q565 Chair: Of course you all had to talk to everyone else, but you are very clear, you agree with LOCOG in their letter to this Committee that this was a serious failure by their largest supplier. Is that right, Mr Taylor-Smith?

David Taylor-Smith: I would agree with that.

Q566 Chair: Presumably you join with Mr Buckles in apologising for what went wrong?

David Taylor-Smith: As Nick did last time, we of course apologise, and particularly to the members of the Armed Services and police who stepped in to assist us.

Q567 Chair: So there is no question of any joint matter. This is your failure, your decision, you informed them. You then worked with them as to how to mitigate the problem.

Nick Buckles: Excuse me, Mr Chairman, we do really need to see the results of our full review to answer that absolutely 100%.

Chair: Yes, of course.

Nick Buckles: It would be wrong of us to sit here and agree with that when we have to wait and see exactly what is-

Q568 Chair: No, I know that. That is absolutely right, Mr Buckles, and no one is questioning that. I am asking Mr Taylor-Smith, who was responsible-I understand that you weren’t even in the country at the time of the call on 3 July-and I am asking him whether it was other Government departments who worked with you before the decision was made or whether it was G4S’ decision, "Sorry, we don’t have enough people," and you are saying very clearly, "This was G4S."

David Taylor-Smith: Sir, I am very clear that on the 11th, we were unable to guarantee that we would deliver the right numbers on the day, and therefore in the national interest, it was important that as soon as we reached that assessment that we could deliver that to the other parties.

Chair: Thank you for being very clear and very open about that.

Q569 Mr Clappison: I was going to ask you, when you referred to a "steep increase", that was not something that came out of the blue that was unexpected. That must have been something you knew that there was that increase all along.

David Taylor-Smith: Yes.

Q570 Mr Clappison: So that hadn’t been planned for in advance?

Nick Buckles: No, I think it is exactly the right time, if we could, to talk about the process of how we go about acquiring people.

Mr Clappison: You are dying to tell us, so let us-

Nick Buckles: Well, I think it is important, because it helps explain the very unusual nature of this contract, and I know we have talked about that, but it clearly is a very different contract than any other contract that has been carried out by any private sector company anywhere in the world for security. There is no blueprint for this, there is no track record, there is no book. So we had to make an assessment in December of whether we could do the contract and we clearly thought we could, and absolutely committed to do it. So we then set upon attracting 100,000 plus candidates. We interviewed 60,000. At that interview-and this is crucial-we had to then, once we selected them, decide one of 49 security roles that they could fulfil in the contract. We are not just talking one security guard, this is 49 different roles ranging from CCTV operator, control room staff, access control, x-ray, radiation detection, so at that stage we had to choose which sort of role-specific training they were going to get. We then started G4S screening and vetting, and that goes back five years, and can take a month to six weeks to complete. Alongside that, they would then start their SIA training, which takes a week. They take an exam, they pass an exam. We then get a licence. They would then start their role-specific training for one of these 49 roles in 110 venues.

Mr Clappison: Can I just interrupt you there, because I am sure it is very interesting-

Nick Buckles: You have the role-specific training, and then once they have done that you would then go for accreditation, which is the final counter-terrorism check to make sure they are fit to work, get an accreditation pass, get a schedule, get a uniform, start working. Now, it is a very just-in-time concept, and of course we were building this pipeline over many months and we knew that we had to achieve 3,000 staff at the start of July and 10,000 staff by the end of the July. But at the point of getting close to that, we still had a large number of candidates who were nearly there, so-

Q571 Mr Clappison: I hate to interrupt you, but if I may, and I want to be fair so that you have a full opportunity, but I take it in lay terms these were all things that you knew that would have to be done, what you have just told us, a long process, was something you knew about in advance.

Nick Buckles: We did, but we didn’t know exactly how long each part would take. We didn’t know the administration involved in each part, and some of it took longer than other parts, and what we had to do to expedite the process through that period of time was do it concurrently, so we had to get five flags on each individual to make sure they were ready to start the Games.

Q572 Mr Clappison: But I am going to the question of when it was in all this long process that you began to discover that something was going seriously wrong?

Nick Buckles: This is the point I am making, exactly that, that you didn’t know until you came to the end of the process how many staff you would have absolutely ready to go with the right skills in the right place at the right time.

Mr Clappison: I have just two other questions to ask you, two short questions.

Chair: Yes, of course.

Q573 Mr Clappison: The first is we have just heard from Mr Deighton, who is the Chief Executive of the Games, that when the Games began that there was a 23% shortfall, I think he said, in the numbers who were supplied by your company, with several thousand people. How would you describe that in the light of the process which you have just described to us? How would you describe the process?

Nick Buckles: Yes, if I just talk the numbers-

Mr Clappison: In delivering, in delivering.

Nick Buckles: -the facts, the facts, yes. So the maximum demand we were aiming to get to was 10,000 and the demand we came to that we supplied was 7,800, so that is a 22% shortfall, but they are just the numbers that coincide. To get to 7,800 people, we did have 13,000 plus people on the books ready to go, and through the July and August period, we did employ 16,000 staff.

Q574 Mr Clappison: When did you know there was going to be a shortfall of that extent? When did you know that it would be 20% to 22%, over 2,000 of the people were not going to be there? When did you know that?

Nick Buckles: Well, as we said when I was here last time, I said-

Mr Clappison: I just asked you the same question.

Nick Buckles: -our target was to get to at least 7,000 people on the ground against the target of 10,000, so that would imply that we knew we were going to be short at that point, which is exactly why, as David said, we raised the flag. We did get to 7,800 on the ground and averaged a lot more than 7,000, so we did at least achieve the commitment we made at the last Home Affairs Committee.

Q575 Mr Clappison: When did you know it was 7,800?

Nick Buckles: When we were scheduling them about a week or two beforehand.

Chair: Can you be more precise on the date? We like to be precise on our dates, so a week or two-

Nick Buckles: Well, we typically-

Chair: Was it 27 June?

Nick Buckles: No, no, no, sorry. No. When I sat before this Committee on 17 July, I said our expectation is we can get 7,000 people on the ground.

Q576 Chair: You are talking about during the Olympics itself?

Nick Buckles: Yes.

Chair: I see.

Q577 Mr Clappison: I would ask you the same question. When was it you knew that the figure would be 7,800?

Nick Buckles: Well, we knew we would be short when we actually-

Q578 Mr Clappison: When did you know that the figure would be 7,800?

Nick Buckles: I don’t really understand the question.

Mr Clappison: When I asked you the same question before you said you did not know; it depends on the schedule. You said there was an expectation of hope that you would get 7,800.

Nick Buckles: Yes.

Mr Clappison: When was it you knew for a fact that there would be 7,800 people; that there were 7,800? You would be able to supply 7,800 people at the beginning of the Games. When did you know that was the figure, the number of people you were going to supply?

Nick Buckles: Well, basically you only ever know on the day they show up clearly. So, we scheduled a number of people to turn up with the-

Chair: You just told the Committee it was two weeks before.

Nick Buckles: No, I said we were scheduling people two weeks before.

Q579 Chair: Mr Clappison, if I may, in the Deloitte report, which we accept, Mr Taylor-Smith, is the only one that you have read, dated 27 April page 21, it talks about a drop-out rate of 71%. The baseline model is a drop-out rate of 31%. Do you know what I am talking about?

Nick Buckles: I am familiar with it.

Q580 Chair: Yes, 31% is the baseline model but the actual position as of 15 April the drop-out rate was 71% and what is being suggested, and Mr Buckles has talked to us about process, is the poor communication between G4S and candidates that resulted in this, very large drop-out rate. We know that people decide to go and do other things but the evidence that has come into this Committee from individuals has all been about poor communication. Do you accept that is one of the problems? I know you cannot give us the whole list of problems, but that may have been a problem?

Nick Buckles: I mean, I certainly said last time, and I clearly would agree, that communication with candidates in a complex project like this has been an issue and clearly we are dealing with that issue on an ongoing basis to make sure they are all properly dealt with.

Q581 Mr Clappison: You have very fairly apologised now and G4S is a very big company which is still undertaking important work. The people who I feel the public feel were really put out by this-and we have heard this today from the police-were the members of the Armed Forces. What are you going to do to make things right for them? Because some of them came back and changed family arrangements and so forth. What have you done, and what do you plan to do?

Nick Buckles: Well, when I was here last time I was asked the question about that and I said we would go away-and we are certainly very keen to acknowledge the support that the military gave us, and the police, and after consulting with the MOD and the best way to deal with that, we did make the decision to donate £2.5 million into the Services charity in recognition of the fact that we certainly had disrupted a large number of people’s summer and we certainly apologise for that.

Mr Clappison: Thank you.

Q582 Michael Ellis: Mr Buckles, you were giving a litany of excuses, clutching at straws and fumbling for excuses about why this contract has clearly been breached, that so many different hurdles had to be jumped and hoops had to be jumped through but no one was forcing you. No one forced you to sign this contract, did they? You presumably know your business, G4S being the largest security company of its type in the world, so you know presumably what requirements have to be met and I suggest to you that you are just trying to find excuses.

Nick Buckles: No, we have mobilised a dozen very large contracts in the last 12 months. We were chosen by the MOJ to mobilise the first public to private prison, we mobilised Lincolnshire Police, we have mobilised a very large number of contracts but they are all very different, as I explained last time, from this contract. It is one of a kind. There is not another contract like it and when we signed the contract back in December we were absolutely sure we could deliver on it, but clearly it was a one of a kind. There wasn’t a track record, there wasn’t a blueprint; we had to make assessments.

Michael Ellis: I accept that it was a one of a kind.

Nick Buckles: So they are not excuses, they are just explanations and until we see the full report I cannot go any more than that. All I am trying to do is point to areas where there could have been problems.

Q583 Michael Ellis: It was an unprecedented contract, but you entered into it willingly and one would expect that a company of your size would know what it is doing and therefore be able to meet the requirements. After all, G4S is being paid hundreds of millions of pounds of public money in order to meet the terms of the contract which you are subsequently in breach of. Is that right?

Nick Buckles: Correct.

Q584 Michael Ellis: On that subject, G4S has not been paid, we are told, since 13 July and that approximately £90 million has been paid so far. Has most of that gone to salaries of people who turned up?

Nick Buckles: It has all gone to salaries and costs that we have incurred so far.

Q585 Michael Ellis: Not all gone to salaries then, some has gone to costs, you say?

Nick Buckles: The costs are mainly salaries as well.

Q586 Michael Ellis: So there is £235 million approximately still outstanding. Is that right?

Nick Buckles: No, because we had some revenue last year in 2011. But what I would say, and I have to make clear, and we have made clear to our shareholders, that we are going to lose £50 million estimated on this contract and that is made up of three areas of costs and it is pure cost and we have no profit hidden anywhere. This is a £50 million loss on about £200 million revenue, and this £50 million loss is made up of the additional costs for the military and the police, which we are absolutely committed to pay for, it is made up of penalties and liabilities which we believe will be potentially due when we sit down and negotiate with LOCOG, and thirdly it is made up of the additional costs we have incurred to make sure that ultimately we did deliver a safe and secure Games, with the help of other people, but we did deliver.

Q587 Michael Ellis: So, what does that leave your profit?

Nick Buckles: No profit at all: £50 million loss.

Q588 Michael Ellis: So, you intend to accept that the London Organising Committee for the Olympic Games should not have to pay any more money to your company that may still be outstanding?

Nick Buckles: No, not at all. I expect them to pay us in line with the contract and absolutely in line with the contract for the services-

Q589 Michael Ellis: Why do you expect them to pay in line with the contract when you did not meet the terms of the contract?

Nick Buckles: Because that is exactly what contracts are for. They are there to make sure that you get a fair and equitable settlement, and we spent many weeks-

Michael Ellis: But you did not perform your part of the bargain. You did not give a fair and equitable part of the bargain as far as the-

Nick Buckles: We certainly did. I am not going to sit here and say we did a great job. I am nowhere near saying that but what I am saying is that we did deliver.

Q590 Michael Ellis: Do you think you should be paid for doing a bad job?

Nick Buckles: We delivered a significant portion of the contract, and our people-and that is one of the points I really have to make-did an excellent job and played a very major role in securing these Games.

Michael Ellis: I do not criticise your staff on the ground. I do criticise the management of your company.

Nick Buckles: We are planning to take a £50 million loss on this contract because we failed to deliver in the way we expected to.

Q591 Michael Ellis: Does that include compensation or reimbursement to Her Majesty’s Armed Forces?

Nick Buckles: That is what I just said. Yes, absolutely.

Q592 Michael Ellis: As far as the overview of the Games is concerned, I appreciate that you are conducting your own review into that, but what percentage of the contracted shifts would you say that you actually delivered?

Nick Buckles: About 83%.

Q593 Michael Ellis: How many of the staff were rostered to work shifts? How many of the staff that you managed to recruit, train and accredit-

Nick Buckles: Sixteen thousand.

Q594 Michael Ellis: Just finally, Mr Chairman, all of those that you managed to recruit, 16,000, they all ended up being rostered and working?

Nick Buckles: Correct.

Q595 Chair: Before we move on, the management fee that we discussed on the last occasion, £57 million, are you still proposing to take this management fee?

Nick Buckles: I have to be very clear about this. I maybe left a misunderstanding last time, this is not a management fee of profit. This is a cost that we have incurred in setting up the contract which we have gone through line by line with our customer to agree beforehand. There is a profit margin. I should say there was a profit margin.

Q596 Chair: But there isn’t any more?

Nick Buckles: There is not any more because we have made an assumption around penalties and we have made significant more costs than we anticipated at the time.

Q597 Chair: If it had all gone swimmingly and it was a marvellous success from start to finish, would senior officials at G4S have received bonuses for successfully delivering this contract? Is that the way it operates? If they had done really well and none of this had arisen and the contract was not breached?

Nick Buckles: The bonus would depend on their sort of sphere of responsibility. For me it would not make a big difference.

Q598 Chair: You would not get a bonus if it had gone well?

Nick Buckles: No.

Q599 Chair: But Mr Taylor-Smith and Mr Hamilton?

Nick Buckles: David, no difference at all to any large degree. I mean, it is part of a profit target but it is a relatively small part.

Q600 Chair: All right. So, nobody would get a bonus for delivering this?

Nick Buckles: Not in isolation, except maybe Mark Hamilton.

Q601 Chair: You mean there are collective bonuses?

Nick Buckles: No, no. I mean, many other things have to happen well as well.

Chair: Okay, thank you.

Q602 Mr Winnick: I have one or two questions, very briefly. You said that a number of contracts have been entered into in the last 12 months. Is that correct?

Nick Buckles: We have started many major contracts in the last 12 months. That is correct.

Q603 Mr Winnick: What about since your appearance before the Committee on 17 July? You have entered into various contracts?

Nick Buckles: We have continued to win business; that is correct.

Q604 Mr Winnick: Can I ask you about the Surrey Police? They were apparently intending, as we know, to privatise part of their services and decided to suspend such involvement very recently when members voiced reservations about one of the partner groups, namely yourselves G4S; what is your reaction to that?

Nick Buckles: I think first of all I just want to explain about police outsourcing because it is a growth business for us. We are very proud of the contract we signed with Lincolnshire.

Q605 Chair: Can you remind me how much it is worth to your company?

Nick Buckles: Police outsourcing at the moment is a £20 million a year contract with Lincolnshire Police and we started that in April and it has gone extremely well but what we do there is we do not do anything to affect the bobby on the beat. It is absolutely designed to give them more time and more focus. So, 97% of the police force now in Lincolnshire are spent facing the general public. So it is about back offices, it is about introducing technology, it is about improving processes. So, we believe that is an absolute positive move forward for police forces. Within the Lincolnshire framework agreement a number of other police forces continue to talk to us, but if you go back to Surrey, Surrey and West Midlands put a framework agreement together themselves and they shortlisted six major companies to continue with the process, one of which was us, but there were other major players like IBM, Hewlett Packard, Capita, so if they really have a concern it is about the ability to outsource; it is nothing to do with G4S.

Q606 Mr Winnick: So, are you really telling us that this failure, to put it mildly, over the Olympics will have no effect on your company at all?

Nick Buckles: Not at all. I am not saying that. I hope-

Mr Winnick: Sorry, are you saying-you are not saying that?

Nick Buckles: No, I am not saying that. I am saying I hope that our track record over many decades of outsourcing in the UK particularly, where we have been pioneers with the Government on a number of different contracts, including the first private prison, the first electronic monitoring contract, the first public to private prison which went extremely well last September. We worked very well with the employees and the Prison Officer Association to make that work. We hope that our long-term track record will stand us in good stead.

Q607 Mr Winnick: So, this fiasco, as far as you are concerned and Mr Taylor-Smith, will have no adverse effect on the reputation of G4S?

Nick Buckles: I did not say that at all. What I said was, we hope that our long-term track record will stand us in good stead. We are not going to say it is not going to damage our reputation. We are saying that our long-term contract record, our ability to deliver service in 120 countries-we have been in business now in the UK for 78 years, we hope that that will help us through what has been a very difficult time for us.

Q608 Mr Winnick: What about your own reputation, Mr Buckles? Is there any feeling within the company that you should stand down?

Nick Buckles: I think that is definitely part of the review. I have been with the group now 28 years, seen a lot of change in that time. I have been CEO for ten years and during that time we have seen the company grow seven-fold in terms of revenue, people, and profits.

Mr Winnick: You are justifying staying on.

Nick Buckles: No, I am just saying it has been a big investment for my whole career and my whole life to work for the company and it is not a decision that I would like to take lightly and I expect the board to listen to the findings of the outcome before we decide.

Q609 Chair: So, Mr Buckles, you are telling this Committee that if the findings of the review are critical of senior management of G4S that given all that you have done for this company, because you have transformed the prospects of this company over a number of years, that you will feel that you might want to step down?

Nick Buckles: I will wait to see the outcome of the review. That is all I can say at the moment.

Q610 Chair: Because what puzzles the Committee is that there are a lot of lines of management in G4S. We appreciate that you are the Global Chief Executive and you have been very open and transparent in coming before us and saying that the buck stops with you but between you and the person who searches the public at the Olympic Park there are many, many layers of management. At the moment, do you not think there are others also responsible for what went wrong? You were not even here, were you?

Nick Buckles: As far as I am concerned I am Group Chief Executive and if a contract goes wrong I take the pain with that as well as the many, many contracts that go right and I am certainly going to wait to see what the review says. I have been entirely focused, as has David, on making sure we deliver a safe and secure Olympics. We are not looking backwards. We are looking forward.

Q611 Chair: But you would not stand in the way of the reputation of this company; if you think it was damaged if you and Mr Taylor-Smith remained in charge because you care about this company and you feel if this is a damaging report that you will stand aside?

Nick Buckles: I care about this company significantly and it will be after talking to the board and the board talking to shareholders that that decision will be made.

Q612 Chair: On the question of procurement, did you see the Financial Times this morning?

Nick Buckles: Yes.

Q613 Chair: Did you note that the Government has now decided to have a list of those that have not performed?

Nick Buckles: Yes.

Q614 Chair: Bearing in mind that you have made a feature of using the words "a good track record" which is how you choose people in your organisation, we understand that you think this is a one-off, everyone regards the Olympics as being very special. The PwC report will tell us whether there is an internal problem in respect of your company and we accept that and thank you for agreeing to send us a copy, as you did on the last occasion when you appeared before us. Given all these factors, it is right, is it not, that the Government may consider putting you on a particular list, a blacklist, for those who cannot deliver big public sector contracts of this kind?

Nick Buckles: I mean, it is the first time that we have seen it written in the newspaper today. I really go back to my earlier point, that we have had a huge number of achievements over the years and I hope that is taken into account.

Q615 Chair: Mr Winnick talked about Surrey, but only yesterday we were told that the Home Office is now monitoring your asylum housing contract which is worth £800 million and that this is being done on a weekly basis. The COMPASS contract was given out-

Nick Buckles: The contract is worth about £30 million to £40 million a year.

Q616 Chair: In total, COMPASS is £800 million.

Nick Buckles: I think that is for everything.

Q617 Chair: With everybody. But does it not worry you that now the Home Office is also monitoring what you are doing in this different area? It is not to do with Olympic security, I accept that.

Nick Buckles: I understand. David might have an answer on that.

David Taylor-Smith: Yes, I spoke to the Managing Director last night responsible for-

Chair: Managing Director of what?

David Taylor-Smith: Of the business responsible for delivering the COMPASS contract.

Chair: Who is that?

David Taylor-Smith: His name is Mr Morris. The weekly review is completely normal. It is programmed. There was a review with UKBA yesterday. They are completely satisfied that we are on target to deliver the transfer of individuals under that contract.

Q618 Mr Winnick: Arising from what you said, Mr Buckles, to the Chair, and accepting that G4S was involved in some part in the security of the Olympics, would you accept nevertheless the overwhelming public view is that the security and safety which occurred, and which undoubtedly played such a part in the confidence of people going to the Games, the feeling is that was due first and foremost to the military and the police? Would you accept that?

Nick Buckles: I do accept that and we are very grateful to the military and the police in helping out. But what I would continue-

Mr Winnick: Helping out? They made the major contribution.

Nick Buckles: They did make a major contribution and as I said, we are very grateful for that.

Mr Winnick: The major contribution, not a major contribution.

Nick Buckles: What I would say is we had 16,000 people who did a great job for this country and they have been recognised for that and they did do a great job and actually we did deliver more than 60% of the overall security for the Olympics.

Chair: Thank you. That is very helpful.

Q619 Mark Reckless: You refer to your employees doing a great job, and I think previously you actually defended all your employees. There have been a number of reports of serious failings among your staff. I mean, one in particular was charged with making a bomb threat at the ExCel Centre on 23 July, another allegedly spat at a soldier and called him a baby killer during the security training at Lords.

Nick Buckles: You know that we would not stand any of that type of behaviour in our organisation. All the investigations were carried out and we dealt with them.

Q620 Mark Reckless: Is it a concern to you that you recruited these individuals in the first place?

Nick Buckles: In a workforce of 16,000 people you will have issues and we deal with them absolutely.

Q621 Mark Reckless: But is there not also an issue as to the quality of your recruitment and your selection and training procedures?

Nick Buckles: Independent audits on all staff that worked on the Olympics said that our training and our delivery was to the same standard as the military.

Q622 Mark Reckless: Finally, the 11 May report from Deloitte, this was shared with you-and we have spoken to some of the other partners about this as well-but given how many failings that report identified, should you not have taken better steps to deal with what was found two months in advance of that 11 July meeting?

Nick Buckles: All the steps, I understand, were agreed entirely between ourselves and LOCOG to make sure we took on board the recommendations from that report. I do not know if, David, you want to add to that but clearly you said that earlier and I believe that is exactly what happened.

Q623 Mark Reckless: But you did not communicate properly with these people that you had recruited and often trained but given what LOCOG did with their volunteers, there was surely a very serious failing by G4S notwithstanding the warnings you had received?

Nick Buckles: It is quite a different process to recruit for security officers. No excuses. It is quite a different process and as I say I would like to wait for the review to see if there were some fundamental issues that I am not aware of that we have not talked about.

Q624 Mark Reckless: Will that review be published?

Nick Buckles: We will share the findings with this Committee.

Q625 Chair: Thank you very much. Can we turn to the new staff who were recruited. Maybe you can help us with this, Mr Taylor-Smith, who were recruited, trained and accredited by G4S, not Bridging the Gap sub-contractors or Wilson James or any of those other companies. How many did you contract to provide, and how many turned up at the end? Do you know?

David Taylor-Smith: We were contracted to provide 10,400, and we provided just over 11,000.

Q626 Chair: Because we heard evidence that it did get better as the Olympics went on. Certainly at the start we had heard reports I think, Mr Buckles, when you appeared on 17 July people had not turned up in Manchester or Coventry and reports were coming in. I think you have to be 105%, do you not, rather than 100%?

David Taylor-Smith: So, from the second week of the Games we were delivering about 91% of requirement and then throughout transition, which is a two-week period where there is a significant rebuild of the Olympic sites and then during the Paralympics we were at 100% of our required headcount, and I had confirmed to me yesterday that independent covert testing of our security found that there was no qualitative difference between ourselves and the military in terms of speed and quality of searching. I would have to say throughout the whole of the Games and the Paralympics the spectator satisfaction remained at over 90%.

Q627 Chair: In terms of, as we have all used this word, hindsight which is this great gift which none of us possess, do you think that there ought to have been more sharing of information among the various partners? I am really puzzled that you had not seen a copy of the HMIC report or even been given a distillation of the conclusions of this report, nor that you had seen the KPMG report. I am just puzzled also why you did not commission your own independent report, given the concerns that had been expressed over a period of time until we got to the end of the Olympics and the PwC report.

David Taylor-Smith: So, just to be clear, we were reviewing and monitoring progress with a number of parties across Government and LOCOG throughout the whole life and the preparation and then once it became clear that we could not deliver on our full commitment we then worked, collocated so all parties came together.

Q628 Chair: Yes, we know all that, but I am talking about you commissioning your own report. After the Deloitte report, which is pretty damning as far as the conclusions are concerned, did you not feel that you should really have had another independent report-somebody else coming in to check that everything was being done? Or you relied on those very close relationships that you would have built up with the Olympic Security Board and the other partners?

David Taylor-Smith: No, so the way that we monitor then progress is then through performance reviews. So, from May, from the date of that, I then personally monitored progress on a weekly basis with a management team and that was in response to one of the recommendations which I completely agreed with, which is in the run-up, we all need to be jointly keeping our eye on the ball.

Q629 Chair: Do you think Mr Ian Horseman-Sewell was unwise to have said on 6 July that G4S could in fact deliver two Olympics: one in the United Kingdom and the other in Australia, given the fact that you had told your Global Chief Executive that you had real problems with this?

David Taylor-Smith: Yes, I do.

Q630 Chair: He now accepts that, does he?

David Taylor-Smith: Yes, he does.

Q631 Chair: Can you just clarify, I don’t know how long you have worked for G4S, but were you involved in the original bid in 2003? Because Mr Horseman-Sewell in a speech to RUSI in January talked about the involvement of G4S in the original bid and you had provided your work pro bono in order to help Britain win the Olympics. Do you know about that? Is this the first time you are hearing about this?

David Taylor-Smith: I am not clear on that.

Q632 Chair: Is it right that you paid LOCOG £5 million as one of the sponsors of the Games?

David Taylor-Smith: That is correct.

Q633 Chair: Would that have entitled G4S to a number of tickets to attend the Games? What did that entitle you to have?

David Taylor-Smith: It entitled us to some marketing rights and then access to purchase tickets at full rates.

Q634 Chair: Did you in fact give your tickets away, as you said you would, Mr Buckles?

Nick Buckles: We did.

Q635 Chair: How many were given away in the end to the Police and to the Army?

Nick Buckles: All our tickets were given away to the Police and the Army.

Q636 Chair: Finally, in terms of morale among your staff, you have obviously made a decision that you will not be bidding for Rio; a very courageous decision but a very important one in view of what has happened. What is the morale like? Because when Mr Reckless and I went around the Olympic Park G4S staff-and I am not talking about the contractors, sub-contractors but fulltime staff-appeared to be very upset about what has happened and one very senior officer felt that the whole thing had really been badly handled by management. It cannot be good for a company that you have helped build up to the position it is in.

Nick Buckles: No. I think my main regret from the whole experience has been our staff. We have 660,000 staff worldwide who do a great job day in and day out and the 50,000 staff we have in the UK were certainly very disappointed on our performance because they go about doing their jobs every day with pride and in G4S we are like a large family and clearly it is very painful that you have so many bad headlines. If you do not know, we deliver about four out of five notes in your wallet; we are the largest cash-carrying company, we read four of ten of your meters, we run your prisons, we run your hospitals, so we do a large number of jobs to help British society. So, for us it was not good.

Q637 Chair: Given the euphoria of the Olympics and the huge success that it has been-we have had Lord Coe and Mr Deighton in earlier-do you sometimes just sit there and wish it had all gone differently? You wish that your managers had actually been more hands on? I know you are waiting for PwC, this great report that is going to tell you everything, but do you kind of think to yourself, "If only we had handled it better, we could have all been a real part of the spirit of what has happened"?

Nick Buckles: Absolutely.

Chair: Mr Buckles and Mr Taylor-Smith, we will be producing our report next week. I know that you are waiting for your report. Thank you for coming today.

Nick Buckles: Thank you.

Prepared 17th September 2012