Police have been called in after a government audit uncovered potentially fraudulent behaviour by Serco staff working on a £285m contract to deliver prisoners to and from court.
City of London police were asked to investigate by both the Ministry of Justice (MoJ) and Serco directors.
The MoJ had been investigating an apparent discrepancy between Serco’s written records and the actual situation on the ground for some months.
In July Justice Secretary Chris Grayling announced a detailed audit which, according to the MoJ, has shown some staff recording prisoners as having been delivered ready for court when in fact they were not. This was a key performance measure of the contract, which covered the London and East Anglia region and was worth £40m a year.
In light of the new evidence, the MoJ has put the Serco Prisoner Escorting and Custodial Services contract under administrative supervision with immediate effect. Serco has agreed to repay all past profits made on the contract, and to forgo any future profits.
Justice Secretary Chris Grayling said: “It’s become very clear there has been a culture within parts of Serco that has been totally unacceptable, and actions which need to be investigated by the police.”
However he said there was no evidence of systemic malpractice up to board level.
Serco has been given notice that it must undergo a total overhaul of its management practices, to be reviewed by the government in three month’s time.
Mr Grayling added: “the taxpayer must know that their money is being properly used.”
In July the government revealed serious mis-charging by Serco and G4S for the electronic monitoring of offenders. Serco agreed to a full independent audit of its handling of this contract, and Mr Grayling thanked the company for its co-operation. It also agreed to withdraw from tendering for new electronic tagging contracts, a process that was ongoing at the time.