The world’s leading international security solutions group … let’s just take a closer look at this strap line shall we G4S or should I say Securicor, Securitas, Group 4 or AccuRead that are just some of your trading names?
In the eight months leading up to July 1995, there were no less than 7 raids on Securicor vans resulting in £millions being stolen, most of which was never recovered. Probably the most notable event was the Salford robbery that happened on 3 July 1995 when £5 million were taken and the van driver, who had been threatened with a pistol (note: the windows of the van were bullet proof) was later found handcuffed to some railings in a quiet cul-de-sac. There was a suggestion it was an inside job but this was never proved or the money recovered.
The 1990s also saw countless prisoners escaping from the escort vans.
In 2002 a spokesman for the newly merged Group 4 Falck proudly announced that the number of prisoners managing to escape was no higher than when the police were doing the job.
It was also in 2002 that the Yarl’s Wood Immigration Centre near Bedford, managed by G4S, was set on fire by its occupants.
Since 1990, G4S has been making major in-roads into the prison service; they took over the management of Yorkshire’s HMP Wolds in 1992 (the first time a prison had been privatised). The contract finishes at the end of 2012 and following report findings it may or may not be renewed. G4S now run 7 prisons including two 15 year contracts worth £750 million to run HMP Birmingham and HMP Featherstone 2.
Of course the most recent débâcle has to be the Olympic security fiasco when an extra 3,500 troops were drafted in to plug the personnel gap left by G4S.
So just how has an organisation with so many problems not only been able to expand but continues to secure lucrative and long term contracts including the planned privatisation of part of the UK’s police force?
Group 4 has its roots in the 1901 Denmark firm Kjøbenhavn Frederiksberg Nattevagt and through a massive programme of mergers and acquisitions it has become a global concern operating in more than 125 countries and claims to be one of the largest private employers (over 657,000 employees) in the world.
In 1990 Group 4 merged with the Danish security firm Falck becoming Group 4 Falck and positioning themselves to be at the forefront of prison privatisation that started in the 1990s. It then acquired UK Securicor plc forming Group 4 Securicor and later G4S.
In fact it is quite uncanny how they timed their move to coincide so perfectly with start of the Conservative Government’s Private Finance Initiative (PFI) that was first implemented in 1992 under John Major.
The PFI is a way of supplying public sector infrastructure and services using private sector capacity but paid for by public funds. This process of ‘outsourcing’ became the buzz word during the 1990s when every company saw it as the answer to their personnel problems.
In 1997 the Treasury Taskforce was set up by the Labour Government “to reinvigorate the private finance initiative”. This morphed into Partnerships UK (PUK) in 2000. Headed by the Treasury, one of the shareholders unsurprisingly was G4S. In June 2010, Infrastructure UK (IUK) was formed and in May 2011 PUK was dissolved and its assets sold. The cost of these quangos can only be guessed.
The IUK’s remit is “to provide a stronger focus on the UK’s long term infrastructure priorities and meet the challenge of facilitating significant private sector investment … some £200 billion of investment is planned over the next five years … of which the majority will need to come from the private sector …”
By October 2007, the British taxpayer was committed to paying £215 billion to finance PFI contracts and by November 2010 the number and value of contracts had increased to £276 billion.
But it would seem G4S know no bounds and continue in their quest to acquire more companies that might offer useful services to the government, but in order to do that, they need large amounts of capital and after its failed acquisition of ISS following opposition of investors, they managed to raise £489 million pounds in April 2012 by an oversubscribed bond issue that they will use to finance further buyouts.
In 2011, G4S turnover was £7.5 billion; 27% from public contracts, running prisons, immigration detention centres and policing and 17% from transporting cash and given their previous record, it may surprise you to hear G4S offer ‘cash consultancy services’ to the banking industry covering cash management strategy, bank note production and security.
In December 2011, the Lincolnshire Police Authority was the first UK force to outsource core policing functions to the private sector and G4S won the 10 year contract worth £200 million to oversee the control centre, human resources, training, finance and custody.
In fact 2011 proved to be a lucrative year for them as they also won a number of contracts to run the government’s Work Programme to find jobs for 125,000 job seekers. This seven year programme gives G4S access to £250 million to fund the initiative.
So was it a case of being in the right place at the right time or a case of ‘it’s not what you know but who you know?’ (John Reid, former Labour Home Secretary, is a Regional Management Director and Lord Paul Condon, former Chief Constable of Kent and Metropolitan Police Commissioner is a Non-Executive Director).
Of course it’s always possible they have the services the world is crying out for.
I know where my money is.