Home Affairs Committee blasts G4S for Olympic fiasco

The Home Affairs Committee, the group of MPs investigating G4S's failure to fulfil all of its Olympic Games contractual requirements, has called on the security firm to waive its fee.

"G4S should waive its £57m management fee and also compensate its staff and prospective staff who it treated in a cavalier fashion," the damning report says.

G4S released a penitent statement following the publication of the report and said its own investigation into "what went wrong with the execution of the contract and specifically why the contract execution issues were not identified on a more timely basis" is close to completion.

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

G4S has already revealed that it expects to swallow a £50m-or-so loss on the contract. This figure includes an estimate for the additional costs incurred for the deployment of the increased military and police and penalties and liabilities due under the terms of the contract. It has also made clear, perhaps with half an eye on the fact that it will be bidding for lots more government contracts in the future, that the British taxpayer will not bear any additional costs.

The group did quibble with the notion that the £57m "management fee" cited by the Home Affairs Committee (HAC) is a profit. "It relates substantially to real costs which have been incurred such as wages, property and IT expenditure," the group explained, adding that the final financial settlement is currently under discussion with LOCOG, the body which organised the London Olympic Games.

JH