Government cancels £21m bespoke tagging deal with Steatite
The government has cancelled a contract to develop a GPS tracking system for offenders after spending £21m on the project.
Ministers ordered the bespoke system with Worcestershire-based Steatite in 2014 after security firms G4S and Serco were investigated for overcharging.
However, "significant problems" with the programme were identified last year the Ministry of Justice (MoJ) said.
Steatite, in Redditch, is yet to comment.
The money was spent to enable the firm to develop a new generation of satellite tags for offenders.
Tagging is used to monitor criminals when they are released and to make sure they stick to any curfews.
Announcing the contract in July 2014, the then Secretary of State for Justice, Chris Grayling, claimed the multimillion pound deal offered better value for money to the taxpayer, saving about £20m a year compared with previous G4S and Serco contracts which were terminated.
But in a written ministerial statement, justice minister Dominic Raab said developing bespoke tags has been "challenging" and it would be "more appropriate" to buy off-the-shelf technology which is already available.
A new procurement process for proven tags already on the market will begin shortly the MoJ said, although the programme will be kept under review.
"We have spent approximately £21m on the mobilisation of the programme to date," an MoJ spokesperson said.
"While the delay in the programme will lead to an increase in resource costs, we would expect the benefits of these costs to be realised.
"These costs include development and build of technology which is necessary to deliver the new service, and which is well-advanced."
Shadow prisons minister Jo Stevens was critical of the news.
"It beggars belief that the Ministry of Justice has had to abandon yet another procurement process," she said.
"From the overcharging scandal to G4S and Serco still being paid to deliver tagging equipment after they had been barred from running the contract, this whole saga has been a shambles from start to finish."