G4S review of tagging contracts finds ‘no dishonesty or criminal conduct’

Will Green is news editor of Supply Management
20 November 2013

G4S has announced that an independent review of its electronic monitoring contract with the UK government has “not identified any evidence of dishonesty or criminal conduct” by its employees.

The Ministry of Justice (MoJ) claims it was overbilled by “tens of millions of pounds” on tagging contracts with G4S and Serco and the Serious Fraud Office is investigating both firms.

G4S engaged Linklaters LLP to review the situation and while the law firm has found no dishonesty or criminal conduct, it has “confirmed that, in certain circumstances, G4S Care & Justice Services wrongly considered itself to be contractually entitled to bill for monitoring services when equipment had not been fitted or after it had been removed”.

In a statement G4S said: “This billing practice, which the company believes was confined to the electronic monitoring contract for England and Wales, was not consistent with the contract or G4S’ values and the company has apologised to the Ministry of Justice and issued credit notes totalling £23.3 million for amounts billed incorrectly between 2005 and May 2013. A further credit note of £0.8 million will be issued for billings for the period from June 2013 to date.”

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.”

A MoJ spokesman said: “This matter is now the subject of a criminal investigation. We are not able to comment further at the current time. We will make a further statement when it is appropriate to do so.”

A report by the National Audit Office (NAO) into the tagging contracts said the government was ‘in dispute’ with G4S and Serco over the level of overcharging and it had not agreed any refund offers from the firms.

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 individuals who were the subject of numerous simultaneous tagging orders.

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