The Government has taken the electronic monitoring (EM) of offenders work off G4S and Serco, after those two firms were reported for alleged malpractice in the contract billing, and given it on an interim basis to Capita, using systems and equipment supplied by G4S and Serco. Meanwhile Serco has seen more changes at the top; Jeremy Stafford, Chief Executive of UK and Europe, left in November and Andrew White, Chief Operating Officer became interim CEO.
Preferred bidders in a competition for the electronic monitoring contracts are Capita, Buddi, Astrium and Telefonica. The preferred bidder status of the companies listed above means that these are now the only suppliers with whom MoJ is in talks to arrange the contracts. Once the preferred bidder stage has concluded, the Government says that it will receive best and final offers and then award contracts.
We expect the contracts to be awarded in the new year and there will then follow a period of transition and mobilisation before the new service goes live.
The Government says that it’s at preferred bidder stage in the competition to introduce satellite tagging, allowing the authorities to track dangerous and prolific criminals and offering greater protection to the public. Discussions with preferred bidders are continuing with contracts expected to be awarded in the new year and GPS tagging introduced later in 2014.
While the competition progresses the interim agreement with Capita will see them take on responsibility for delivery of the current electronic monitoring service.
Justice Secretary Chris Grayling, pictured, said: “This signals a fresh start for electronic monitoring that brings us a step closer to introducing the most advanced tagging system in the world. Monitoring the movements of dangerous and repeat offenders will be vital in cutting crime, creating a safer society with fewer victims and offering greater protection and reassurance to the public.”
Under the interim contracts the Ministry of Justice says that it will have far greater oversight over costs and charging than previously, with direct access to the supplier’s systems to increase transparency. Once in place the new GPS tags will mean that anyone suspected of committing an offence can be identified as having been at the scene of a crime or eliminated from enquiries. This will the Government says deliver swifter justice and save valuable police time and money.
What G4S says
In June G4S says, it engaged the law firm Linklaters LLP, to do a review into the conduct of G4S employees in relation to billing under the EM contract and to assess whether there was any evidence of dishonesty or criminal conduct.
The security contractor reports that Linklaters has searched and reviewed emails and done interviews with relevant employees and has not identified any evidence of dishonesty or criminal conduct by any employee of G4S in relation to the billing arrangements under the EM contracts.
The company says that the review has confirmed that, in certain circumstances, the firm wrongly considered itself to be contractually entitled to bill for monitoring services when equipment had not been fitted or after it had been removed.
This billing practice, which the company believes was confined to the EM contract for England and Wales, was not consistent with the contract or G4S’ values and the company has apologised to the Ministry of Justice (the Ministry) and issued credit notes totalling £23.3m for amounts incorrectly billed between 2005 and May 2013.
A further credit note of £0.8m will be issued for billings for the period from June 2013 to date. These credit notes are issued against outstanding sums on these contracts and are covered by an impairment provision made in the Group’s half year results. G4S adds that it has external investigation costs of around £2 million.
The security company says that the Ministry of Justice is conducting an audit in relation to EM billings and the company’s assessment of these matters and the credit notes may not agree with the Ministry’s audit findings.
G4S says that it continues to provide support for the reviews by the Cabinet Office and the Ministry into other G4S contracts with the UK Government and whilst these reviews are not yet complete, no evidence has been identified by the company or brought to the company’s attention which indicates that the billing procedures on the EM contract have been applied to any other G4S contracts.
G4S points to changes to its senior management team, including a new Chief Executive Officer, a new Chief Financial Officer, a new Regional Chief Executive for its UK businesses and a Deloitte partner in the newly-created position of Group Head of Risk and Programme Assurance. The executive previously responsible for the UK businesses (including EM) is no longer working at G4S.
Ashley Almanza, G4S Group Chief Executive said: “The way in which this contract was managed was not consistent with our values or our approach to dealing with customers. Simply put, it was unacceptable and we have apologised to the Ministry of Justice. As part of a wider programme of corporate renewal, we have changed the leadership of our UK business and we are putting in place enhanced risk management and contract controls. We remain committed to working with the Ministry and the UK Government to resolve this matter and to provide enhanced oversight of service delivery and contract performance.”
