Public Services > Central Government

SFO launches investigation into G4S and Serco

Charlotte Jee Published 04 November 2013

News follows the resignation of both firms' chief executives amid a radical overhaul of corporate structure

 

The Serious Fraud Office (SFO) has opened a criminal investigation into G4S and Serco over the government's electronic tagging contract.

The announcement follows a decision in August this year to conduct a government-wide review of contracts held by G4S and Serco, after an independent audit within the Ministry of Justice uncovered 'systemic malpractice' such as overcharging .

Both firms withdrew from a Ministry of Justice electronic tagging contract in August, with Justice Secretary Chris Grayling criticising them for not doing so earlier.

Both G4S and Serco have confirmed that they will 'cooperate fully' with the SFO investigation.

The cross-government review's terms of reference indicate that a final report was due to be released to government departments and Cabinet Office officials in October.

The SFO announcement follows the resignation of both Christopher Hyman as Serco's chief executive and Richard Morris as G4S's chief executive for the UK and Ireland last month. Both companies are taking steps to restructure in an attempt to respond to the government's demands for 'corporate renewal'.

In a recent interview with the Financial Times, Cabinet Office minister Francis Maude said, "We will wait to see that their corporate renewal plans go far enough and address the real issues that have emerged. They have to show that they've genuinely...turned over a new leaf."

Serco gained roughly £750m worth of government business in 2012/13, while G4S received £250m from the public sector in the same period.

 

Related articles:

Serco restructuring focuses on central government as a customer

G4S's electronic tagging withdrawal will offer chance to alternative providers








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