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The CEO of Serco Group, Christopher Hyman, has resigned in the wake of scandals over offender tagging and prisoner transfer contracts with the UK government. Meanwhile, G4S, also implicated in the tagging row, has similarly lost its CEO, Richard Morris.
The move by Hyman to step down comes after Whitehall ordered the firm to undertake “corporate renewal” or face exclusion from all government contracts after alleged fraudulent behaviour was uncovered on a contact to deliver prisoners to court.
The police were called in to investigate and a committee of government non-executive directors, including Whitehall CPO Bill Crothers, is due to assess the company’s progress at the end of November.
Hyman said: "I have always put the interests of Serco first. At this time, nothing is more important to me than rebuilding the relationship with our UK government customer. In recent weeks it has become clear to me that the best way for the company to move forward is for me to step back.”
Serco has also announced the recruitment of three additional non-executive directors and a group general counsel, a board committee for corporate responsibility and a number of ethics committees.
Alastair Lyons, Serco non-executive chairman, said: "The decisive and comprehensive actions we have set out, alongside the programme already underway, should leave no one in any doubt about how seriously Serco takes these issues and our commitment to rebuild the confidence of our UK government customer.”
A Cabinet Office spokesman said: "The government will take full account of all the changes Serco have made. While it is early days in their programme of renewal, this is a positive move by Serco and a step forward.
"In July, the justice secretary announced that the Cabinet Office would lead a review of government contracts held by G4S and Serco. That review is ongoing and will ensure government's contractual arrangements are robust and taxpayers' money is spent responsibly in a vibrant, competitive market for public services."
Although G4S would not comment on the reasons for the departure of its CEO, the firm said in a statement: “We can confirm that Eddie Aston has been appointed CEO of G4S in the UK and Ireland following the resignation of Richard Morris.”
The government announced a review of all Serco and G4S contracts after overcharging worth tens of millions of pounds was discovered on offender electronic tagging contracts.