MoJ calls for investigation of Serco contract

The Ministry of Justice (MoJ) and Serco have asked City of London Police to investigate alleged fraudulent behaviour relating to the management of outsourced prisoner escort contracts.

The MoJ said it had been investigating the Prisoner Escorting and Custodial Services (PECS) contracts run by Serco “for some months” and has uncovered evidence that indicated potential fraudulent behaviour, including some prisoners being taken to court described as ready when they were not, an issue that affects key performance measures outlined in the agreement.

An audit of contracts involving Serco was launched in July after the company, along with G4S, was accused of overcharging the Government for electronic tagging services.

The MoJ has put the contract, which covers parts of London and East Anglia, under administrative supervision with immediate effect. Serco has also been told by the Government it must undergo a corporate renewal process.

Justice Secretary Chris Grayling said: “It’s become very clear there has been a culture within parts of Serco that has been totally unacceptable and actions which need to be investigated by the police.

“We have not seen evidence of systemic malpractice up to board level, but we have been clear with the company – unless it undertakes a rapid process of major change and becomes completely open with government about the work it is doing for us, then it will not win public contracts in future.”

Serco, which has agreed to repay all past profits made on the PECS contract and to forgo any future profits, has begun the corporate renewal process and told the MoJ no board member was aware of any impropriety.

Andy Hyman, Serco chief executive, said he was “deeply saddened and appalled at the misreporting of data by a small number of employees on the contract”.