NOTORIOUS private security companies G4S and Serco now face criminal investigation by the Serious Fraud Office in the wake of the electronic tagging scandal.
Earlier this month both were stripped of responsibility for tagging criminals in the UK.
It follows allegations that they charged the government for tagging people who were either dead or in jail.
Serco have now agreed to repay to the government £68.5m, unlike G4S who has not yet agreed a position on repayment.
The Howard league for Penal Reform said: ‘The G4S and Serco contracts fiasco must be the death-knell for government’s dangerous gamble with justice privatisation.’
However, instead of re-nationalising, Tory Justice Secretary Chris Grayling said that the electronic tagging contracts will instead be handed to Capita by the end of the financial year.
He said the rival firm would continue to use Serco and G4S’s equipment.
In his latest statement, made yesterday, Grayling said that the conduct of G4S and Serco is ‘now subject to a criminal investigation by the Serious Fraud Office’.
He added: ‘Serco agreed to a forensic audit of the electronic monitoring contract, conducted by PwC, including examination of email traffic relating to the contract. On the basis of this analysis, Serco has now agreed to repay £68.5m excluding VAT.
‘This figure reimburses the government for money owed on the electronic monitoring contract and for other costs.’
His statement continues: ‘On 28 August I announced that Serco’s contract for escorting prisoners to courts (the “PECS” contract) had been referred to the City of London Police.’
He adds: ‘While at this stage, my Department does not have evidence to confirm that dishonesty has taken place, we have today, following legal advice, referred both matters to the Serious Fraud Office in order to establish whether this is the case.’
He concludes: ‘In the light of these developments, both G4S and Serco have decided to withdraw from the MoJ competition for rehabilitation services.
‘This means that neither company will play a role as a lead provider of probation services in England and Wales in this competition.’
Responding to the Justice Secretary’s written ministerial statement regarding Ministry of Justice contracts, Frances Crook, Chief Executive of the Howard League for Penal Reform, said: ‘The withdrawal of G4S and Serco as prime contractors from the Transforming Rehabilitation programme is welcome news for the taxpayer, given these firms’ exceptionally concerning record running justice services.
‘Given the abject failure of the Ministry of Justice to look after taxpayers’ money when managing contracts, this must surely be the death-knell for the government’s dangerous gamble with justice privatisation.
‘The Coalition’s plan to sell off probation has succeeded only in destabilising the public probation service, which has served the public well for more than 100 years. We hope that at the eleventh hour, this excellent service can now be saved.’
