Outsourcing firm Serco hit with £22.9m fine over electronic tagging scandal

Serco had been responsible for fitting electronic tag on former prisoners (stock image). Credit: Ian Nicholson/PA

Outsourcing firm Serco has been given a £19.2million fine and hit with £3.7million in costs by the Serious Fraud Office as part of a settlement over an electronic tagging scandal.

The UK branch of the company, Serco Geografix, admitted responsibility for three offences between 2010 and 2013 relating to under-reporting profits from its electronic monitoring contracts with the Ministry of Justice.

The prosecution agreement with the Serious Fraud Office (SFO) - which has to be approved by the courts - brings an end to a lengthy investigation into Serco, with no criminal charges brought against the firm.

The matter has been ongoing since the Serco was reported to the SFO in 2013.

The company paid £70million as part of a settlement to the Ministry of Justice in December 2013 after they and fellow outsourcing group G4S faced allegations of charging the Government for electronically monitoring people who were either dead, in jail, or had left the country.

Serco Group chief executive, Rupert Soames, said: “Those of us who now run the business are mortified, embarrassed and angry that, in a period between six and nine years ago, Serco understated the level of profitability of its Electronic Monitoring contract in its reports to the Ministry of Justice.

“Serco apologised unreservedly at the time, and we do so again.”

He added: “The management and culture of Serco, and the transparency with which we conduct our affairs, have changed beyond all recognition, and we are pleased that this has been acknowledged by both the SFO and by the Government.”

Serco has been hit with a £22.9m fine in relation to electronic tagging offences. Credit: PA

By late 2013, Serco was stripped of its responsibility for tagging criminals.

The company said it had taken steps to reform itself.

No board members or senior executives from the time of the alleged incidents work for the group today, Serco added.

The group now reports annually to the SFO and the Cabinet Office on its assurance programme following the saga.

The Financial Reporting Council also launched an investigation in June 2016 into Serco’s group auditor, Deloitte, at the time of the offences.