Philip Booth discusses the recent failures of the Olympic security firm G4S. He argues that the latter's failure does not destroy arguments for outsourcing.
The G4S contract was clear and they have paid the price for their failure; £50 million worth of compensation as well as £650 million wiped off their share price. As a result they may struggle to get contracts in the future and are thus accountable and paying the price. G4S has made a mess and is paying a huge penalty as a result. This accountability is the strongest incentive to provide a good service.
Listen here. Segment starts at 19.18.