The Board and management of G4S have taken responsibility for the inability of the company to deliver, in full, on the Olympic security contract and apologise for this failure.

As previously announced the Company, supported by PwC, is conducting a review to determine in detail what went wrong with the execution of the contract and specifically why the contract execution issues were not identified on a more timely basis. This review is nearing completion and the findings will be considered by the Board and then announced within the next ten days.

G4S has announced that it estimates that it will incur a loss on this contract in the region of £50m. This includes an estimate for the additional costs incurred for the deployment of the increased military and police and penalties and liabilities due under the terms of the contract. It has consistently made clear that the British taxpayer will not bear any additional costs.

As explained by both G4S and LOCOG to the Committee, the £57m “management fee” is not a profit. It relates substantially to real costs which have been incurred such as wages, property and IT expenditure. The final financial settlement is currently under discussion with LOCOG.

G4S recognises that some candidates will not have received the level of service that they should expect during the recruitment of security officers for the Olympic and Paralympic Games. G4S has already agreed a process, in conjunction with the GMB Union, for compensating those candidates who completed training and accreditation or made a significant journey through the recruitment process, but were unable to work at the games. The process for handling these enquiries has already begun.

The Company acknowledges and regrets the serious failing of not identifying the workforce shortfall at an earlier date. As soon as the company knew that it could not assure the full workforce numbers in the build up to the Games, the relevant people at LOCOG and the Home Office were informed.

G4S has a longstanding track record of delivering on Government contracts to a consistently high standard. Everyone connected with the company is extremely disappointed that G4S was unable to deliver on its full commitments on this contract, but this does not reflect the high standards G4S delivers continuously in its other work for the UK Government every day.

The Board and the management of G4S would like to reiterate their thanks to the members of the military and police. They would also like to take this opportunity to recognise the hard work and dedication of the thousands of G4S staff who worked alongside them.