Controversial firm saw income from UK taxpayer rise by 20% last year
Company earned £394million in 2012-13, up from £328.5million
Labour MP Barry Sheerman warns of over-reliance on private contractors
Controversial security firm G4S has enjoyed a 20 per cent surge in government contracts despite a string of blunders, new figures show.
The company – which failed to recruit enough guards for the London Olympics – earned £394million from the taxpayer in 2012-13, up from £328.5million a year earlier.
The revelation sparked claims it was becoming the ‘private army’ of the state.
Security: The controversial firm G4S has seen a 20 per cent increase in its income from the UK government, raising fears of an over-reliance on a ‘private army’
With just weeks before the London Olympics opened in July last year, G4S admitted it would not be able to provide the thousands of guards it had promised.
Its reputation was severely damaged when 3,500 troops were called in to provide security at the biggest events.
In the wake of the debacle MPs called on the government to think again before awarding more lucrative contracts to the firm.
But it seems to have done little to dent its reputation in Whitehall, and next week it will provide security guarding the world’s most powerful men and women at the G8 summit at Lough Erne.
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Labour MP Barry Sheerman, who obtained the figures on government spending with G4S, said he was worried about an increasing over-reliance on a small number of companies.
He warned: ‘The trouble is a lot of contractors are in a monopoly. They do seem to be swelling up and getting bigger and bigger and we are getting to the stage where the over-reliance on one company troubles you.
‘I am becoming increasingly worried about the monopoly position that G4S have in security services.
‘They are becoming the private army of Her Majesty’s Government. There is something going on that I think we need to shine a spotlight on.’
Blunder: The army had to be called in for the London Olympics after G4S failed to recruit enough guards last summer
Nick Buckles, who last month quit as G4S chief executive, admitted the Olympic security contract had been a ‘humiliating shambles’ for the company but Labour MP Barry Sheerman (right), who obtained the figures, warned of a few firms having a monopoly on state contracts
Most of the hike in Government spending on G4S contracts was down to an extra £51 million spent by the Ministry of Justice on contracts with the company.
A spokesman for the department said the increase was down to G4S being given contracts to run prisons at Birmingham and Oakwood, as well as managing the facilities of a large part of Her Majesty’s Courts and Tribunal Service.
The Department for Work and Pensions more than doubled its spend on G4S contracts – up from nearly £13.8 million to more than £32.1 million.
G4S: A HISTORY OF BLUNDERS
The UK-based security firm traces its roots back to a guarding company founded in Denmark in 1901.
G4S was formed when Group 4 merged with Securicor in 2004. The company has a long record of blunders including:
In 1993 Group 4 became the first private company to run prisoner escort services,m and lost seven inmates in three weeks
A year later a hunger striker escaped from Campsfield House detention centre, guarded by Group 4
In 1997 it emerged the firm had transferred a prisoner between two vans on a petrol station forecourt
Three prisoners escaped from Peterborough Crown Court in 2001
In 2011, G4S staff lost a set of cell keys just days after taking over Birmingham Prison Workers put an electronic tag on criminal Christopher Lowcock’s artificial limb
In 2012 the firm failed to train enough guards for the London Games which meant 3,500 soldiers had to be recalled from leave
In March this year a G4S guard at Heathrow ordered Royal Navy engineer Nicky Howse to change out of her uniform before flying to the US because it was ‘offensive’
A contract awarded to G4S for the Government’s Work Programme accounted for the increase, Employment Minister Mark Hoban said in his answer to Mr Sheerman’s question.
The figures do not include spending by the Department for Communities and Local Government which has not yet answered the MP’s question.
Mr Sheerman said it was ‘amazing’ that so much was being spent on G4S when it was failing to pay Olympic subcontractors that were ‘not complicit in the debacle’ of the company’s handling of security at London 2012.
‘I thought it was amazing that such an amount is being spent on one major contractor, also at a time when we still know that G4S have failed to pay subcontractors who have worked for them on the Olympic site,’ Mr Sheerman said.
He said some small and medium-sized businesses who worked on the Olympic site were made to subcontract to G4S by Locog, but now have not been paid.
‘I don’t know why they haven’t paid them, it is just bad principles,’ he said.
‘They were told at one stage in the development they were running the logistics and security of the athlete’s village.
‘Once that was finished they became subcontractors and told to be subcontractors to G4S.
‘One would have thought Locog would have leaned on G4S to do the honourable thing to the subcontractors.
‘They were not complicit in the debacle that occurred when the army came in.’
Kim Challis, G4S CEO of government and outsourcing solutions, said: ‘We have been working with the UK government for more than two decades, delivering the highest levels of service and under a high degree of monitoring and oversight.
‘We have won every contract we have been awarded by bidding in a highly competitive environment, based on delivering an effective service for the best deal for the taxpayer, with a number of providers challenging for the work.
‘We have a strong track record of delivering for our UK Government customers and are proud of the service our 11,000 employees provide to them, and the general public, every single day.’
Former G4S company boss Nick Buckles, who admitted the London 2012 contract had been a ‘humiliating shambles, last month quit his £1.2million-a-year role as chief executive.
He clung on to his job in the immediate aftermath of the Olympics debacle but the firm’s reputation suffered badly and in recent weeks poor trading caused shares to slump by more than 13 per cent in one day.
This month, G4S’s AGM was interrupted by protesters making reference to Jimmy Mubenga – an Angolan man who died while being deported from the UK by G4S guards.
In July last year, prosecutors said they would be taking no action against the three G4S staff over the death.
By Matt Chorley, Mailonline Political Editor
PUBLISHED: 12:36 GMT, 12 June 2013 | UPDATED: 08:42 GMT, 13 June 2013
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