G4S fights for £57m Olympics cash
Should G4S pocket its £57m fee following its shambolic handling of the Olympics? The Commons home affairs committee doesn't think so and wants G4S to be black-listed.
But G4S wants to cling onto the cash despite its boss, Nick Buckles (pictured) acknowledging its Olympic performance was "a humiliating shambles".
By waiving the £57m management fee, the Commons home affairs committee says, "a small fraction of the £759 million that it [G4S] receives from the British taxpayer every year, G4S would send a strong signal to the public that it is serious about offering fair and reasonable redress when things go badly wrong."
Strong signal sent
G4S's annual pipeline of public sector contracts was worth almost £760m from UK taxpayers in 2010–11 while the Games contract - potentially - adds a further £284m to this amount. About £1.04bn going to G4S in total.
G4S is the biggest security company in the world and the Government (or British taxpayer) is its biggest client. It's expected to make more than £400m in pre-tax profits this year.
Cost of kitIn its defence, G4S claims it supplied more than 80% of contracted staff during the Games itself. But G4S boss Nick Buckles - his salary approached close to £1m last year - has yet to absorb the point that the £57m management fee was given on the basis that G4S provides a full competent, professional service.
"The £57m management fee is not a profit," said G4S in a statement this morning. "It relates substantially to real costs which have been incurred such as wages, property and IT expenditure. The final financial settlement is currently under discussion with LOCOG."
So far G4S has been paid around £90m for its Olympics contribution out of a total potential amount of £236m still to be negotiated with LOCOG, the body responsible for organising the Games.
Down not outG4S has already taken a £50m hit on the contract for extra costs incurred for the deployment of the increased military and police presence.
The Commons home committee meanwhile wants to see a register of high-risk providers who have a track record of failure of public services. "This would provide a single source of information for those conducting procurement exercises about companies which are failing or have failed in the delivery of public contracts."
But G4S is a long way from being down and out. Its just picked up a £20m contract to oversee electronic tagging of offenders from the Scottish Government.