THE failure of G4S to provide adequate staffing levels for the Olympics showed the limitations of private companies taking on public sector contracts, the British Defence Secretary has admitted.
Philip Hammond conceded the shortfall in security guards, which forced ministers to draft in additional troops, caused him to reconsider the use of contractors to carry out public services.
His comments will be welcomed by those concerned that the Government is allowing for the increasing privatisation of parts of the armed forced.
In an interview with The London Independent, Mr Hammond said: "I came into the MoD with a prejudice that we have to look at the way the private sector does things to know how we should do things in Government.
“But the story of G4S and the military rescue is quite informative. I’m learning that the application of the lean commercial model does have relevance in areas of the MoD but, equally, you can’t look at a warship and say, ‘How can I bring a lean management model to this?’ – because it’s doing different things with different levels of resilience that are not generally required in the private sector.”
It emerged just two weeks before the opening ceremony the company could not meet its £284 million contract to provide 10,400 staff for the Games.
18,200 military personnel were eventually drafted in for London 2012 following a massive security blunder.
Mr Hammond said the military had come at the problem of security for the games in the opposite way to G4S.
"G4S were literally hiring people and expecting to deploy them three days later, into a live situation; trying to build up a management structure overnight, at the beginning of the operation," said Mr Hammond.
"A very lean structure, with lots of dependence on self-motivation by the people in the workforce; scheduling their own shifts, for example, by accessing an internet site.
"The military comes at it from the exact opposite extreme. What's the job that needs to be done? Ok, we'll do it. Whatever it takes we'll pour in massive over-resourcing, massively heavy structures of management."
He added: "What the military primarily deliver is contingent capability and I haven't been able to think of a single large-scale example where a private organisation delivers a contingent capability.
"You pay for it, year in, year out, but you probably never use it for what it's designed for."
He also told the newspaper he was considering making it illegal for employers to ask applicants whether they are in the reserves.
Cuts to the armed forces mean the Government needs to recruit 15,000 reservists by 2020 but there are concerns many will lose out on jobs if companies know they may be called away.
A Ministry of Defence spokesman said: "Given the scale and importance of this once in a generation event, including the forthcoming Paralympics, it is right that all across government play a part in ensuring the success of the Games.
"This includes the armed forces who have done a fantastic job while continuing to deliver on other standing tasks and duties."
G4S is to donate £2.5 million to the Armed Forces as a "goodwill gesture" It will go towards welfare amenities including sports equipment and to sports associations which have backed serving athletes, including rowing gold medallists Captain Heather Stanning and Lieutenant Pete Reed.