By Rory MacKinnon, Corporate Affairs Reporter in London, England:
G4S charges us another £198 million
Friday 13 July 2012
Private Olympic security firm G4S was embroiled in fresh controversy today over ballooning admin costs.
London 2012 was struggling to quell public anger after it emerged that G4S has bumped up charges by £198 million – despite the army being drafted in to plug chronic staff shortages.
The “programme management fee,” covering training and recruitment, went up from £7m to £60m while operation costs were more than 20 times the initial 2010 quote going from £3m to £65m.
The initial £86m contract called for 2,000 security staff, but costs mounted as Games organisers increased the order to 10,400.
Lib Dem member of the Commons public accounts committee Ian Swales said he would have expected a “Rolls-Royce service” for such “colossal” amounts of money, but instead the privateer’s offering was of “very poor quality.”
The latest scandal piles the pressure on G4S after it admitted this week that it has trained and deployed only 4,000 of its contracted guards and – just a fortnight before the Games – only another 9,000 are in the “final stages” of training and could be deployed.
It meant that the government decided to call in an extra 3,500 troops to make up the numbers, bringing the total forces personnel involved in the Olympics to 17,000.
Home Secretary Theresa May said there were penalty clauses in the G4S contract but it would be up to Olympic organisers Locog to reclaim money after the company’s failure.
G4S had not responded to requests for comment when the Morning Star went to print, but a London 2012 spokesman said it was wrong to suggest the extra money was “essentially margin.”
“A substantial amount of that figure would include direct new costs which would be incurred in delivering the significantly larger contract taken on last year,” he said.
But investors were less forgiving as £200m has been wiped off of the firm’s share prices since the debacle.
The furore also follows attempts to make inroads into the country’s emergency services.
G4S already runs six private prisons and recently won a £200m contract to build and run a Lincolnshire police station and is after a £1.5 billion outsourcing deal with West Midlands Police.
The police state 2012 Olympics: here.