Written 15th July 2013 by Olliers Solicitors

Justice Secretary Chris Grayling has asked the Serious Fraud Office to investigate contractor G4S after telling Parliament that it and rival Serco had overcharged the Government by ‘tens of millions of pounds’ for tagging criminals.

Grayling said that both firms had charged the Government for tagging people who were in prison, had left the country or died, though he said that at this stage there was no evidence of dishonesty. He said he had referred G4S following ‘clear legal advice’ after the company refused to take part in a forensic audit of the contract. An investigation into the way the Ministry of Justice managed the contracts would also be carried out, Grayling said, as officials had been aware of the potential problem since 2008 and failed to take adequate steps to address it.

Tagging Offenders

Of the most shocking allegation – that G4S had continued to charge for tagging offenders after their death – the security firm said it could find almost no evidence to support such claims, suggesting they had been “taken out of all proportion”. The company said it had found one case where the Ministry of Justice had been charged £60 for two days beyond the death of the offender. The sum had been repaid, the company said.

G4S last week claimed its hands were tied on how it billed for tagging offenders. It said it had no legal authority to close or suspend a curfew order, something it said could only be done at the behest of a prison or the courts.

Grayling told MPS that all Government contracts with both G4S and Serco would be reviewed, but said that the plans to outsource probation would not be put on hold, despite the fact that the companies are likely to be the main bidders.

He said:

“I am angry at what’s happened and determined to put it right.”

In a statement on its website, G4S said it was conducting its own review, assisted by external advisers. It said it has not received a claim for a refund, but if its review identifies any over billing, it will reimburse the ministry.

Group chief executive Ashley Almanza said:

“We place the highest premium on customer service and integrity and therefore take very seriously the concerns expressed by the Ministry of Justice. We are determined to deal with these issues in a prompt and appropriate manner.”

A statement from Serco said it would repay the amount agreed and ‘cooperate fully’ with the ministry on its audit of government contracts.

Ministry of Justice Audit

In light of the investigation it said it has decided to withdraw from the re-tendering process for the electronic monitoring service, but said the ministry has reconfirmed that it is the single remaining bidder for the South Yorkshire group of prisons, although the award will be delayed and is dependent on the outcome of MoJ’s audit.

Shadow Justice Secretary Sadiq Khan called for an immediate police and SFO investigation as ‘fraud has potentially taken place’. He said:

“There can be no cosy relationships with either company if we are to truly get to the bottom of these very serious allegations. Both these companies are recipients of hundreds of millions of pounds of contracts from across Government and local authorities and it is important that an immediate and independent audit takes place to make sure there are no wider irregularities involving taxpayers’ money by them or the other big players.”

Andrew Neilson, director of campaigns at the Howard League for Penal Reform, said:

“…we have seen what happens when justice is for sale. Given the scale and nature of the over-charging revealed today, the secretary of state should re-think his plans to introduce yet more private sector involvement in the criminal justice system. In the face of such mounting evidence of failure, to do anything else would be blinkered in the extreme.”

Ruth Peters

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