Serco fined £19.2m over electronic tagging scandal
Outsourcing giant Serco has been fined £19.2m by the Serious Fraud Office (SFO) over the electronic tagging scandal.
The firm’s UK subsidiary Serco Geografix admitted responsibility for three offences of fraud and two of false accounting for understating its profits from government contracts.
The scandal came after a government audit found outsourcing firms had billed the taxpayer to tag and monitor prisoners who were never tagged, back in prison, or even dead.
The firm also agreed to pay £3.7m in costs as part of a “deferred prosecution agreement” and said on Wednesday it was “mortified” by the scandal over the Ministry of Justice contract.
The fine was discounted by 50% by the SFO because Serco reported the offences itself and had cooperated with the investigation.
“Serco apologised unreservedly at the time, and we do so again,” Serco’s chief executive Rupert Soames said in a statement.
“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.”
The firm has already paid compensation as part of a £70m civil settlement in 2013.
The investigation, which involves the firm’s behaviour between 2010 and 2013, has now concluded without Serco facing any criminal charges.
When then-justice minister Chris Grayling announced a review into the scandal in 2013, the UK government temporarily blocked G4S and Serco from applying for government contracts.
The controversy sparked debate over the role of private firms in providing public services, with senior figures at both firms resigning over the scandal.
But Soames said the company’s management and culture had now “changed beyond all recognition,” with no one on its board or executive management team at the time still at the firm today.