MPs demand answers over £4bn takeover bid for contracting giant G4S

Head to head auction and takeover process raises "many questions", PAC chair says
Photo: PA

A committee of MPs has demanded answers over a planned takeover of the major government outsourcer G4S.

Public Accounts Committee chair Meg Hillier has asked civil service chief operating officer Alex Chisholm to set out what scrutiny the Cabinet Office has undertaken of two bidders that have been vying to take over the security company.

The MPs want to know if the Cabinet Office has determined whether the potential new owners of G4S, which runs immigration detention centres and prisons, have the “financial viability, commitment to delivering value for money, and ability to manage a portfolio of government contracts”, she said. G4S’s other government contracts include running Covid-19 testing centres.

In a letter last week, published yesterday, Hillier asked whether the department had undertaken “scrutiny or investigation” of the bidders, and whether G4S had discussed its impending takeover with its Crown representative or other civil servants.

With a near-£4bn buyout by US company Allied Universal Security Services looking likely, Hillier also asked what measures had been put in place to ensure the continuity of government contracts.

And she asked if the Cabinet Office had discussed the impact on jobs or terms and conditions of employment.

Over the last month, G4S has been the target of a bidding war between two rival firms – US-based Allied Universal Security Services and Canadian company GardaWorld.

The head-to-head auction came to an end two weeks ago, with a £3.68bn bid from Allied Universal Security Services.

GardaWorld declined to match the bid, with its founder and chairman saying there were “better and less risky opportunities available” to buy.

“We are disciplined buyers and we will not overpay for a company with systemic [environmental, social and governance] issues that continue to come to light,” he said.

Controversies G4S has faced in the last few years include the company being stripped of its contract to run HMP Birmingham in 2018 after a prison inspector found conditions there “disturbing”.

Muliple inquiries were launched after a 2017 documentary found evidence of abuse at Brook House, a detention centre it was running. A 2019 inspection showed conditions had improved, although there was still room for improvement on staff training on other things.

Hillier noted that the committee had examined G4S’s management of government contracts on several occasions. 

She said the takeover process had “raised many questions” that Chisholm must answer, which she asked him to respond to by 19 March.

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