Serco to repay £68.5m for tagging contracts overcharging

The private security firm Serco has agreed to repay the Government £68.5 million, excluding VAT, for overcharging on criminal tagging contracts, the Justice Secretary Chris Grayling has announced.

G4S and Serco withdraw from rehab competition

In the light of today's developments, the Ministry of Justice said both G4S and Serco have decided to withdraw from the 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.

Men in G4S security coats.
G4S and Serco have decided to withdraw from the MoJ competition for rehabilitation services. Credit: Press Association

The Government said it has left open the possibility of either supplier playing a supporting role, working with smaller businesses or voluntary sector providers.

Unlike Serco, G4S has not yet agreed a position on repayment over the overcharging fiasco, although discussions are continuing.

Read: Serco to repay £68.5m for tagging contracts overcharging

Minister: Serco repayment 'good news for taxpayers'

Minister for the Cabinet Office Francis Maude said it was "good news for taxpayers" that Serco has agreed to repay £68.5 million for overcharging on criminal tagging contracts.

He said:

We are confident that the company is taking steps to address the issues which our review has identified.

Since day one this Government has been working to reform contract management and improve commercial expertise in Whitehall.

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Serco to repay Government amid overcharging fiasco

Serco has agreed to pay the Government £68.5 million after it emerged the private security firm and rival G4S overcharged for tagging offenders, some of whom were found to be dead, back in prison or overseas.

The Serious Fraud Office (SFO) previously opened a criminal investigation and a Government-wide review of all contracts held by Serco and G4S, worth £5.9 billion in total, was launched.

A flag with the Serco logo on.
Serco has agreed to pay the Government £68.5 million for overcharging on criminal tagging contracts Credit: REUTERS/Darren Staples

Serco has agreed to pay £68.5 million to the Government to reimburse money owed on the criminal tagging contract and for other costs incurred such as the investigation.

In addition, G4S has been referred to the SFO again after the Ministry of Justice uncovered further problems with two contracts for facilities management in the courts.

Read: Serco to repay £68.5m for tagging contracts overcharging