These two companies were making headlines several times before with scandals and wrong claims.
Auditors discovered that G4S charged for false tagging claims. They were either for dead people, in prison or for people never been tagged before.
G4S really excels itself with making headlines before. At first they let prisoner escape when in transit from prisons to the courts. Then they signed a contract with the government to provide security during the 2012 London Olympics but 10 days before they admitted that they could not provide the full security required because they couldn’t recruit enough staff. This was an incredible statement with high unemployment existing. Furthermore, a whistleblower revealed that their checking out details of people for security employment was appalling.
Serco also was in the News before for adding non-existing appointments in the medical section to meet the government’s target which entitles full payment.
David Cameron set up a tidal wave of outscoring work to companies. He believes it is cheaper than civil servants and tries to convince the public. Of course, we do not have the full exact details of finance to compare but thinking logically these companies are all with shareholders expecting at the end of the financial year a very dividend which has to be paid by the taxpayers. Also their chief executives receives around £1million a year plus bonuses. Also including a number of non-executives which hardly produce results but being paid substantially. It is doubtful that the cost with civil servants would be that high. Is it not more likely that the Government receives chares in these companies and therefore another lump sum?
G4S and Serco are the countries biggest suppliers and the G4S contract is estimated over £50million for tagging alone. Serco’s contract is worth 4.9billion
Even Justice Secretary Chris Grayling was astounded about the wrongly charged fees. He assumed that the estimated sums would run into low tens of millions. However, he straightaway soften the embarrassing blow in stating that he had no knowledge of the two companies “knowingly” have dishonourable practices. Here we have to remark that auditors suppose go through the accounts every year. And then approve it or disapprove it. Therefore it sheds some doubts on Mr Grayling’s statements. Besides both companies were already caught with providing very unsatisfactorily work.
It also speaks for a number of contracts received from the Government and proves more than inefficient results. After all these constant scandals the Coalition, which is mainly Tories, decided to increase their outscoring contracts. Is there no let up of irresponsibility?
According to this report from Reuters the tagging scandal exists since 2008 in the Ministry of Justice. This gives a record of five years and nothing was done. Yet Mr Grayling had the audacity to state he did not know anything about it. Well as a Justice Secretary he better gets himself familiar with what is going on in his department. After all it is the Government responsible for the work being done correctly when they outscore it.
Mr Grayling demanded an independent forensic auditor and Serco agreed but G4S insisted on their own investigations. Since the previous scandals the long service chief executive Nick Buckley eventually resigned after great pressure put on his resignation. Again David Cameron was backing him up for a long time. Eventually Mr Buckley had to resign and was given a golden handshake. As always when they are found out about their shoddy work they resign only under pressure but receive a tremendous sum of money.
Serco CEO Christopher Hyman promised to repay any amount they received unjustified. Due to all these investigations the bidding for the new contract for prisons in Yorkshire were being delayed and Serco withdraw from bidding for a new tagging contracts which is worth £150million a year. G4S is still bidding for it but the MoJ is having doubts whether to reward it to G4S. However, would it be surprising if they still get it?