Serious Fraud Office considers probe into Serco over tagging

LONDON Thu Sep 26, 2013 7:47pm BST

A Serco flag is seen flying alongside a Union flag outside Doncaster Prison in northern England in this December 13, 2011 file photograph. REUTERS/Darren Staples/Files

A Serco flag is seen flying alongside a Union flag outside Doncaster Prison in northern England in this December 13, 2011 file photograph.

Credit: Reuters/Darren Staples/Files

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LONDON (Reuters) - Global outsourcing group Serco could be investigated by Britain's Serious Fraud Office (SFO) alongside rival G4S after an audit showed they charged for tagging criminals who were either dead, in prison or never tagged at all.

In response to the audit, Britain in July placed under review all contracts held by the firms, two of the government's biggest suppliers which run services from prisons and immigration centres to transport. The Ministry of Justice said at the time it had asked the SFO to consider carrying out an investigation into G4S.

The SFO said on Thursday the Ministry had also asked it to consider whether it should investigate Serco over the contracts.

"We can confirm we are considering the information provided by the Ministry of Justice on the G4S and Serco electronic monitoring contracts. We have no further comment at this time," the agency said.

Serco said in a statement on Thursday that it continued to believe it billed in accordance with the contract, adding that it was co-operating fully with the Ministry of Justice.

G4S, the world's biggest security firm, said in July it was running its own review and would reimburse any money that is owed. "G4S believes that any evidence of dishonesty should be referred to the relevant authorities, including if appropriate, the SFO," it said.

Serco and G4S are facing possible exclusion from some future government contracts. Serco gets around 45 percent of its revenue from the British public sector and about 1.2 billion pounds, or 25 percent, from contracts with the national government.

G4S makes around 10 percent of its 7.5 billion pounds turnover from British government work.

"We are clear that new business can only be awarded where the integrity of the contracts and the conduct of suppliers can be assured," the Ministry of Justice said in a statement, adding that the audit of its contracts with the companies and another review of all government contracts with the two were continuing.

The contract woes have intensified a debate in Britain over the outsourcing of public services to profit-driven private companies.

News of the potential SFO investigation will be a further blow for Serco. In August, the Ministry of Justice asked police to investigate alleged fraudulent behaviour by some Serco staff working on a prisoner escorting contract.

Serco promised in August to fix any wrongdoing by its staff.

(Reporting by Sarah Young; Additional reporting by Christine Murray; Editing by Pravin Char)

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