Tue, 12 Feb 2013

Security provider G4S has said that it will lose £20m more than originally expected over its ill-fated involvement with the London 2012 Olympic and Paralympic Games, after agreeing to waive a larger proportion of its project management charge.

The London Organising Committee for the Olympic and Paralympic Games (LOCOG) was forced to bring in extra military personnel to augment G4S’s security provision at last summer’s event, with delays in the vetting and screening process eventually found to be the cause of G4S’s recruiting shortfall.

The firm had originally said it was putting aside £50m on turnover of £3.9bn for the first half of 2012, but in a new statement to the City today, says the actual figure would be £70m, and that “the main difference between the previous estimate and the final settlement is an agreement to waive a larger proportion of the project management charge”.

Charitable donations of £11m and a further £7m of sponsorship and marketing will be added to this loss.

Chief executive officer Nick Buckles says: “We have accepted responsibility for the security workforce issues and, as a result of the settlement terms which we have announced today, have ensured that the overall cost to the taxpayer has been reduced significantly against the planned cost.

“The UK government is an important customer for the group and we felt that it was in all of our interests to bring this matter to a close in an equitable and professional manner without the need for lengthy legal proceedings."

G4S’s statement also clarifies that it supplied over 80% of the manned security service it had contracted to supply over the broader Games period, recruiting around 16,000 security workers.

• See also former LOCOG head of recruitment Paul Modley’s thoughts on ‘Recruitment lessons from London 2012’. Modley will speak at Recruiter’s Smart Resourcing 2013 conference, headline sponsored by Eploy, on 28 February. Visit www.smartresourcing2013.com