Contractors overcharging government for tagging

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Private contractors G4S and Serco have overcharged the government for delivering tagging services by tens of millions of pounds, Justice Secretary Chris Grayling told the Commons.

He said some charges were made for tagging people who were in jail or abroad, and a few who had died.

The situation was "a wholly indefensible and unacceptable state of affairs", Mr Grayling said in a statement on 11 July 2013.

The irregularities were revealed in a government-commissioned audit by financial services firm PricewaterhouseCoopers.

Mr Grayling said: "This audit has now confirmed the circumstances in which the department was billed for services. This has included instances where our suppliers were not in fact providing electronic monitoring."

Serco has agreed to take part in a "forensic audit" of what happened. G4S declined to do so, and Mr Grayling asked the Serious Fraud Office (SFO) to consider investigating them.

Shadow justice secretary Sadiq Khan said "to the public this appears a straightforward fraud - obtaining property by deception" but he added: "At the same time as serious failings have been exposed in the way the MoJ buys in hundreds of millions of pounds of services, you are proposing a massive expansion in the amount of work to be handed over to private companies."

Labour's Keith Vaz, chairman of the Commons Home Affairs Committee, said the Cabinet Office needed to introduce a "high risk" register to ensure companies which had not offered value for money or been caught up in scandals did not win future government contracts.

In reply, Mr Grayling said he had no evidence of dishonesty and that he found it "disappointing" that G4S had not withdrawn from the tendering process for the next generation of tags, although Serco had.

He also said: "The House should be under no illusion that I am dealing with this issue with the utmost seriousness. We will take all appropriate action. We cannot allow things like this to continue unchecked."

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