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updated: 11/8/2012 6:06 AM

U.K. strips G4S of jail contract after Olympics security debacle

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Bloomberg News

The U.K. government stripped G4S Plc of its contract to run a prison and the company failed to win further jail contracts it bid for, following criticism of its shortcomings in providing security for the London Olympics.

Justice Secretary Chris Grayling said today that G4S, whose failure to provide enough security was described by lawmakers as a "fiasco," would no longer run the Wolds prison in Yorkshire, northern England. The jail will return to the public sector next year.

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G4S ousted two executives in September after the government called in troops to augment protection of athletes and the public at the Olympics because the Crawley, England-based company said it couldn't supply sufficient staff.

Three remaining bidders, Sodexo, Serco Group Plc and MTC/Amey, will continue in the competition to run Northumberland prison and another group of jails in Yorkshire -- Lindholme, Hatfield and Moorland -- with contracts to be awarded early next year, the Ministry of Justice in London said.

"The cost of running our prisons is too high and must be reduced," Grayling said in an e-mailed statement. "We can do this by being more innovative and efficient, and without compromising public safety."

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