[ 2013-07-11 ]

Security firms overcharged by tens of millions over electronic tagging
Chris Grayling, the Justice Secretary, has asked
the Serious Fraud Office to investigate security
firm G4S after a review found the Government had
been overcharged by tens of millions in its
electronic tagging contract.
A review has found G4S and rival security company
Serco both over-billed the taxpayer for running
the tagging schemes by tens of millions of pounds,
in what the minister said was a "wholly
indefensible and unacceptable state of affairs".
It included charging the government for tagging
offenders who had died, been returned to prison,
left the country or who had never been put on the
tagging scheme in the first place, Mr Grayling
told the House of Commons.
It also emerged Ministry of Justice officials
first became aware of some of the problems in 2008
but failed to take appropriate action - and Mr
Grayling said some civil servants may now face
disciplinary action.
“I am angry at what has happened and am
determined to put it right,” said Mr Grayling.
"This has included instances where our suppliers
were not in fact providing electronic monitoring.
"It included charges for people who were back in
prison and had had their tags removed, people who
had left the country, and those who had never been
tagged in the first place but who had instead been
returned to court.
"There are a small number of cases where charging
continued for a period when the subject was known
to have died.
"In some instances, charging continued for a
period of many months and indeed years after
active monitoring had ceased.
"The House will share my view that this is a
wholly indefensible and unacceptable state of
affairs.
Mr Grayling said he expected MPs would share his
"astonishment" that two of the government's two
biggest contractors would behave in such a way.
He added: "The audit team is at present confirming
its calculations but the current estimate is that
the sums involved are significant, and run into
the low tens of millions in total, for both
companies, since the contracts commenced in 2005.
"It may date back as far as the previous contracts
let in 1999."
Serco has agreed with a Ministry of Justice
proposal for a further investigation, and allow
inspection of its internal emails.
But G4S, which was widely criticised for its
failure to fulfil security requirements at last
year’s Olympics, has rejected that proposal,
said Mr Grayling.
"I should state that I have no information to
confirm that dishonesty has taken place on the
part of either supplier," he told MPs.
"But given the nature of the findings of the audit
work that has taken place so far, and the very
clear legal advice that I have received, I am
today asking the Serious Fraud Office to consider
whether an investigation is appropriate into what
happened in G4S, and to confirm to me whether any
of the actions of anyone in that company represent
more than a contractual breach."
Mr Grayling first launched an investigation into
G4S and Serco in May after an internal audit
uncovered a "significant anomaly" in the billing
process.
The Ministry of Justice brought in external
auditors to find out how much the two companies
have incorrectly claimed from the taxpayer, which
uncovered the remarkable details announced by Mr
Grayling to the Commons.
He said: “I am making changes in my department
because it is quite clear that the management of
these contracts has been wholly inadequate.
“Enough knowledge came into the department to
find out about these issues some years ago but it
was not acted upon.
“Proceedings are likely to include, or may well
include, disciplinary proceedings to establish
precisely what did go wrong.”
Spending on electronic tagging has run to £700
million since G4S and Serco were handed the
contracts.
About 20,000 people - included convicted criminals
released early from prison, and suspects on bail -
are put on electronic tags each year in England
and Wales.
Mr Grayling said no-one had been put in danger and
the problem was purely to do with the billing
arrangements. The contracts were awarded by the
Labour government in 2004 and are ministers are
currently going through a process to re-allocate
the work.
Serco has pulled out of the bidding process but Mr
Grayling said he was "disappointed that G4S still
feel it appropriate to participate".

Source - The Telegraph

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