G4S has offered MoJ £23.3 million over tagging contracts fiasco

Will Green is news editor of Supply Management
19 November 2013

G4S has offered to pay the government £23.3 million in relation to overcharging on an electronic tagging contract.

A report by the National Audit Office (NAO) into the tagging contracts with Serco and G4S said the Ministry of Justice (MoJ) was “in dispute” with both firms over the amount it was overcharged.

The report, which includes the results of a forensic audit by PWC of the contracts, said overcharging “may amount to tens of millions of pounds”.

The NAO said: “The department believes that both providers charged for work that had not taken place, in a way that was outside what was set out in the contracts for the electronic monitoring of offenders.”

The NAO said contractors were charging for electronic monitoring “for months or years” either after it had ceased or when it had never taken place, and multiple times for a single individual who was subject to a number of simultaneous tagging orders.

The NAO said: “Both contractors have said that, in their view, such charging was in line with the terms of the contract. G4S has since stated, however, that it now views that interpretation as inappropriate. The company has said that it intends to offer the ministry £23.3 million in credit notes in respect of issues it has identified to date. Serco has stated that it will refund any amounts that it agrees represents overcharging. The department has not currently agreed to any refund offers made by the providers.”

Both contractors are now subject to a criminal investigation by the Serious Fraud Office.

The report, produced as a memorandum for parliament, said since the contracts with G4S and Serco were let in 2005, a total of 741,000 cases had been monitored at a cost to the MoJ of £722 million.

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