How The Plan To Outsource London's Olympic Security Turned Into A DisasterReported by Business Insider on Wednesday, 18 July 2012 (on July 18, 2012)
G4S, a private security company based in the UK, is one of the largest companies in the world, operating in over 150 countries and employs 657,000 people.
Even so, when it announced it would be signing a $355 million contract for services at the London Olympics this year, many eyebrows were raised. The group was due to provide 13,000 members of staff to help the British capital cope with the influx of Olympic visitors, but was such a large-scale use of private security really a good idea?
The G4S group has had a number of scandals in recent years, perhaps most notably the death of Angolan immigrant Jimmy Mubenga in 2010 (this week G4S was told it wouldn't be charged for the death), and there were serious concerns about the training and accountability of G4S employees.
However, even G4S's biggest critics must be jaw-dropped at the scandal that has enveloped the company before the games have event started.
Last week, with less than a month to go to the opening ceremony, G4S announced that it would not be able to meet provide the staff it had said it would, falling short by over 3,500 personnel. The BBC reports that even those staff who had accepted offers with G4S have been dumbfounded by a lack of contact with the company, and many of them had not turned up to their shifts.
Given the short notice, the armed forces had to be called in to fill the spaces, meaning that over 17,000 military personnel would be on the ground or on standby in London during the games. Not only is that more than are currently in Afghanistan, these well-trained troops are being used for menial tasks.
Had my bag checked by a fully trained RAF medic today at the Olympic Park. Well done #G4S
— Robert Booth (@Robert_Booth) July 16, 2012
On Tuesday, British Parliament called in Nick Buckles, the chief executive of G4S, in to explain. Buckles admitted that the situation was a "humiliating shambles" and that the reputation of G4S was now "in tatters".
It's difficult to imagine a more crushing fall from grace for G4S, where profits went up 39% in 2011. A key part of the security firms expansion has been taking over the services traditionally held by state employees — for example the firm had been providing staff for UK border security for years and it operates four prisons for the British government, with plans to takeover more on the way.
Crucially, the company saw its future in taking over many services from the UK's overstretched police force. The company had recently signed a contract worth $250 million to take over half of the Lincolnshire Police Department's civilian duties, part of a growing government plan for privatization. Just weeks ago, the UK and Africa head of G4S, David Taylor-Smith, argued that his company will be running large parts of the UK's police force within five years — and privatization of police services would only spread.
Those comments now look completely insane. The British government is now working to activate the penalty clauses in their contract with G4S, the FT reports, and the company's market value has dropped $938 million in just four days. Perhaps even more damaging to the company, and those that advocating further privatization of the security services, is the extent to which the company has become a national laughing stock (for example, British comedian Peter Serafinowicz's inept alter-ego Brian Butterfield is now an employee of the site, according to his Twitter account).
Is the G4S scandal the death knoll for privatization of government security services? Perhaps, but some point out that the G4S already makes nearly 30 percent of its revenue from British public service contracts. That juggernaut may be tough to stop.
Please follow International on Twitter and Facebook.
Join the conversation about this story »
Links: Full news story
|Recent related news|
23 minutes ago
|Filed under: Investing
LONDON -- Management can make all the difference to a company's success and...|
3 hours ago
|The ambiguity of Western attitudes towards the Islamic Republic of Iran raises many questions about...|
3 hours ago
|Some of the best dishes are the results of a culinary mishap
Way back when I was a junior pastry...|
4 hours ago
|Not too many Hollywood franchises hit their stride five movies in, but in 2011, "Fast & Furious 3-6"...|
4 hours ago
|*¤ YESTERDAY IN GOLD & SILVER*
The gold price hit its low shortly after 9:00 a.m. in Hong Kong on...|
5 hours ago
|Major Projects Authority's performance report on 170 most expensive projects gives flagship scheme...|
9 hours ago
|• Speculation over Chivas USA's ownership
• Johan Cruyff's grandson has trial at DC United
2 days ago
|Coverage of this crime is just another example of gore laid on by the bucket load, the perpetrators'...|
2 days ago
|Saudi Arabia, under domestic and international pressure to grant women sporting rights, is creating...|
4 days ago
|Soccer, alongside minority Shiite Muslims and relatives of imprisoned government critics, is emerging...|