LONDON (Reuters) - Security services firm G4S and outsourcing group Serco were on Friday named preferred bidders for contracts under the government’s welfare-to-work programme.
G4S won three contracts worth nearly 250 million pounds, while Serco got two, as the Department for Work and Pensions (DWP) handed out deals worth 3 to 5 billion pounds to private and voluntary sector organisations.
The government’s work programme aims to move unemployed people from claiming benefits and into jobs. The contracts will run over seven years, and the programme will begin in June.
“We expect volume (from the new contracts) to be about half compared to that derived under Serco’s 3 previous Flexible New Deal contracts,” analysts at Execution Noble said.
Serco shares were down 1.79 percent at 551 pence, while those in FTSE 100-listed G4S were up 1.33 percent.
Serco will run schemes in south Yorkshire and the west Midlands, and G4S will run programmes in Greater Manchester and Cheshire in the northwest of England, in Kent, Surrey and Sussex in the southeast, and in northeast Yorkshire and the Humber.
The news comes a day after G4S, which provides services ranging from cash transportation and facilities management to security and protection, was named manager of two UK prisons, a decision that sparked anger among unions.
Friday’s decision sparked similar protests.
The Public and Commercial Services union said Friday’s contracts would add “hundreds more” to unemployment figures.
“At least one provider has already issued redundancy notices ... The union fears similar redundancies from other providers as they prepare for running the work programme from June 2011.”
Reporting by Neil Maidment and Adveith Nair; editing by Myles Neligan and Will Waterman