G4S bosses will claim £57m fee

G4S BOSSES insisted yesterday they would be claiming tens of millions of pounds in management fees despite being 100% responsible for a “humiliating shambles”.

Nick Buckles, chief executive of the world’s second largest private sector employer, admitted he was sorry and “deeply disappointed” after the firm failed to deliver on its £284 million Olympics security contract.

But he repeatedly insisted the f irm still intended to claim its £57 million management fee for work over the last two years, even though it cannot provide the guards needed for the games.

Keith Vaz, chairman of the Commons Home Affairs Select Committee, said it was “astonishing” and called on G4S to waive the fee and any others associated with the contract.

Mr Buckles is under pressure to quit his £830,000-a-year job over the fiasco, which has resulted in the emergency deployment of soldiers, marines, airmen and police officers and seen £400 million wiped off the market value of G4S.

He admitted he could not deny that the debacle was a “humiliating shambles for the company” and the firm’s reputation was now in tatters.

Tory MP Nicola Blackwood said Mr Buckles’s performance before the MPs “would lead quite a lot of people to despair”.

“I had very little confidence in G4S fulfilling this contract before this session started and now I don’t have any confidence at all.”

Labour MP Bridget Phillipson told Mr Buckles she was left with the feeling that he was “making it up as you go along”.

Tory MP Michael Ellis added that the public was “sick of huge corporations like yours thinking they can get away with everything”.

Mr Buckles promised the firm would pay all police and military costs caused by G4S’s failure, would cover any accommodation expenses and would even consider paying bonuses to individual officers and troops if considered appropriate.

But asked by Mr Vaz why the firm still wanted to claim its management fee, Mr Buckles said: “We’ve managed the contract and we’ve had management on the ground for two years. We still expect to deliver a significant number of staff.”

Mr Buckles said he told organisers Locog on July 3 that his firm experienced a shortfall in staff over the previous weekend, in part due to its scheduling system not working properly.

It was monitored daily at meetings with Locog and the Home Office but it was not until an Olympics Security Board meeting, chaired by Charles Farr, director general of the Office for Security and Counter-Terrorism, on July 11, that the firm said it was not going to meet its contract obligations.

The shortfall only became clear at the meeting on July 11, he said.

G4S took on the Olympics contract to boost its reputation, not its profits, Mr Buckles said. But he insisted the £50 million loss the firm now faces was not insignificant, saying it was a “huge amount”, representing 10% of the company’s annual £500 million profit.

The problem was that G4S did not have enough staff, rather than that its staff were simply not turning up, he said. He conceded he could not even guarantee how many security guards would turn up on the first day of the Olympics.

A sculpture of Paralympic mascot Mandeville on the south bank of the River Thames. Eighty-three sculptures of Mandeville and fellow mascot Wenlock have been placed at some of London’s most visited locations.

Nick Buckles.