The Olympics fiasco could hurt G4S' role in the public sector in the UK, making them a less tempting choice for government or councils.
Security company G4S has admitted the failure to fulfil its Olympics contract cost it in the region of £50 million.
G4S is to donate £2.5 million to the Armed Forces after 18,200 military personnel were drafted in for London 2012.
Four staff have been injured in an altercation with an inmate at the G4S-run Birmingham Prison, the firm said.
Two staff suffered serious cuts and all four were taken to hospital for treatment, G4S said.
"Four members of the prison's healthcare unit were wounded in an altercation with a prisoner on remand, with two staff receiving serious lacerations," said a G4S spokesman.
The termination of G4S's contract to run the Wolds prison is another blow to the firm, following its failure to provide enough staff for the London Olympics:
- The Wolds is a category C training prison in east Yorkshire
- Holds up to 395 men
- Run by G4S since it opened in 1992
- Said to have "clear weaknesses" in HM Inspectorate of Prisons report in August
- Will return to the public sector at the end of the current contract in July 2013
- G4S shares were down 5% after the announcement
- G4S also failed in bids to land three other prison contracts
- However, the security firm still runs five other UK prisons
Plans for prison reform announced today could save £450 million over the next six years, the Ministry of Justice said after private firm G4S lost its contract to run the Wolds prison.
The ongoing competition process for four prisons had "produced a compelling package of reforms for delivering cost reduction, improvements to regimes and a working prisons model in these prisons", the MoJ said.
The Government's decision to hand over prisons to the private sector was "a mistake of Olympic proportions", said the chief executive of the Howard League for Penal Reform after G4S lost one of its contracts:
– Frances Crook, chief executive of the Howard League for Penal Reform
The Government will seek to deflect criticism of its prison privatisation programme by excluding G4S from the next stage of the bidding process, but the principle of awarding lucrative contracts to private companies running prisons on the cheap remains unchallenged
Private firms are often much better at winning contracts than delivering the goods, but the criteria for these decisions have not been made public.
G4S has responded to the government's announcement that the security form has lost its contract to run Wolds prison:
– G4S statement
We are disappointed by today's announcements.
As the leading private provider of prison management in the UK, we have 20 years of experience of running prisons for the Ministry of Justice.
Our performance across all six prisons we run has been to a high standard with every aspect of performance either meeting or exceeding the key performance indicators applied by the MoJ.
We look forward to discussing the contract award decision with the MoJ within the next few days to determine why we were unsuccessful.
The Justice Secretary Chris Grayling has explained a decision to move a prison security contract to the public sector:
– Chris Grayling MP
The cost of running our prisons is too high and must be reduced.
That is why I have decided to take a new approach to how we compete prison services and reduce unit costs across the prison estate.
This is a challenge the public sector must rise to. The approach I am announcing today does not rule out further prison-by-prison competitions in the future.
Security firm G4S has failed to win any of the prison contracts it was bidding for, the Ministry of Justice said.
Competitions to run Northumberland prison and the South Yorkshire group of jails - Lindholme, Hatfield and Moorland - will move to the final stage without G4S in the running.
G4S, the firm at the centre of the Olympics security shambles, has lost its contract to run the Wolds Prison in East Yorkshire and it will return to the public sector next year, the Ministry of Justice said.
– A UKBA spokesman
Returning families with no right to be in the UK is one of the most difficult and sensitive aspects of our work and we are committed to treating everyone in our care with respect and humanity.
We will consider the recommendations in the HMCIP's report carefully and respond in due course.
– Jerry Petherick, managing director of G4S custodial and detention services
In every secure centre managed by G4S, the welfare of the people in our care is our top priority.
In this incident, our staff were concerned that the woman risked causing herself harm and took the necessary steps to prevent this.
We will be examining how best to take forward the recommendations made following this incident, but it should be noted that the report praises staff for their exceptional level of care and the considerable steps they take to avoid the use of force.