By Richard Johnstone | 20 December 2013
Outsourcing firm Secro has agreed to repay £68.5m to government as a result of overcharging the Ministry of Justice for electronic tagging services that had not been carried out.
Following the conclusion of a cross-government review of contracts held by the firm and G4S following the overcharging allegations in July, Justice Secretary Chris Grayling said yesterday a settlement had been reached following a contract audit.
The total repayment covers both reimbursement of money owed on the electronic monitoring contract and for other costs incurred, including the cost of the review. It also includes £4.2m to pay the costs incurred after the MoJ announced that the contracts would be taken over by Capita by the end of the financial year.
Cabinet office minister Francis Maude said it was ‘good news for taxpayers’ that Serco have agreed to make the payment.
‘We are confident that the company is taking steps to address the issues which our review has identified, he added.
‘Since day one this government has been working to reform contract management and improve commercial expertise in Whitehall. Everything we have seen has highlighted the importance of these reforms and we will be redoubling our efforts over the coming months, including through the establishment of the new Crown Commercial Service. Last year our procurement reforms saved the taxpayer £3.8bn, but there is more to do as part of our long-term plan to drive greater value for hard-working families.’
The MoJ’s audit of G4S contracts has uncovered ‘serious issues’ with invoicing in 2 further contracts held by G4S for facilities management in the courts.
While the department said that it does not have evidence to confirm dishonesty has taken place at this stage, it has referred both matters to the Serious Fraud Office in order to establish whether this was the case. G4S and Serco are already subject to a criminal investigation by the SFO over the tagging deals.
The government said it had also asked G4S to implement a corporate renewal plan. The firm has already said it would provide the MoJ with a £23.3m credit note after admitting that overcharging had occurred, but the department has not yet said whether it will accept this offer.
