Cameron pledges to take back G4S Olympic money

THE GOVERNMENT will activate all possible clauses in G4S’s Olympic security contract to claw back money from the firm, including the £57m management fee it has refused to give up, David Cameron and sports minister Hugh Robertson vowed yesterday.

Speaking during a trip to Afghanistan, Prime Minister Cameron said his government will “go after” G4S to make it pay for the thousands of soldiers filling the gap for the company.

Robertson was similarly bold yesterday when asked at a press conference how much G4S could expect to lose. He said: “We are working through that at the moment, but all the penalty clauses that are in the contract will be activated.”

A government spokesman told City A.M. last night that there were several penalty clauses in the contract, including ones related to the management fee.

G4S’s chief executive Nick Buckles provoked MP anger on Tuesday when he said the company would hold onto the £57m payment, despite falling short on the number of guards G4S had promised. Around 3,500 soldiers will be drafted in to make up for the deficit.
Numis analyst Steve Woolf told City A.M. that penalty charges could be based on the number of staff G4S failed to supply for the games. With Buckles’ firm falling short by thousands of people, its losses on the contract could be substantial.

G4S did not respond to the government or reveal if it would be adjusting its expected losses from the affair. The company said last week it could face a fine of between £10m and £20m, and with the firm liable for the soldiers’ pay, its total loss on the contract was estimated at £50m.

Shares in G4S rose slightly before Cameron and Robertson spoke, and remained stable yesterday.

Neither Cameron nor Robertson called for Buckles to step down immediately. Robertson said: “I don’t want resignations causing chaos. What happens to Mr Buckles afterwards is a matter for others in the post-Games environment.”

When grilled by MPs on Tuesday, Buckles said he was the “right person at the moment” to “deliver as many people as we can”.