G4S agrees to pay back £109m over electronic tagging scandal
Government upholds ban on G4S winning new contracts despite tagging deal
G4S has agreed to pay nearly £110m back to the taxpayer following a scandal in which it charged for the monitoring of non-existent electronic tags, including some which had been assigned to dead offenders.
The private security giant, which reported a pre-tax loss of £170m in 2013, had had an earlier offer of £24.1m plus VAT rejected by the Ministry of Justice (MoJ).
Chris Grayling, the Justice Secretary, announced the department and the company had agreed a settlement of £108.9m plus VAT to cover overpayments for tagging and prisoner escort services.
It includes £4.5m which relates to G4S contracts to operate court buildings. Both this and the tagging contracts have been referred to the Serious Fraud Office.
Mr Grayling said the payment represented a “good deal” for the taxpayer as it recovered all the money owed to the MoJ.
The repayment will comprise £75.9m in cash and credits of £33m. An exact figure after VAT has been added has not been disclosed.
The world’s biggest security company will hope the payment draws a line under the episode, in which it charged the state over many years for tagging offenders who were actually dead, back in prison or did not even exist.
However, Mr Grayling said the department would consider whether it was owed further cash if police decided to bring criminal charges against G4S.
The other firm caught up in the tagging scandal, Serco, has agreed to pay back £70.5m plus VAT.
The Cabinet Office is reviewing 28 contracts worth around £9bn held by G4S and Serco, including work operating private prisons and running welfare-to-work schemes. The episode raised questions over the Coalition’s drive to outsource work to private contractors.
A ban on G4S bidding for new Whitehall contracts will not be lifted by ministers until they see evidence of “corporate renewal”.
The cost of overhauling the business since the tagging scam was exposed contributed to G4S reporting an £170m annual loss, compared with a £158m pre-tax profit in 2012.
Its chief executive, Ashley Almanza, who last year replaced Nick Buckles as chief executive officer, admitted that the company had achieved “barely any growth” in Britain during 2013. He added: “The reasons for this are well-known.”
G4S also suffered severe damage to its reputation after its failure to fulfil its contract to provide enough security staff for the 2012 London Olympics, forcing the Government to draft in members of the armed forces at short notice.
Mr Almanza said: “We have repaid all amounts overbilled and have implemented significant changes to strengthen contract management and controls and to ensure our business is always conducted in a manner which is consistent with our group values.
“We believe the conclusion of this matter, together with the actions we are developing on corporate renewal, will enable us to maintain our position as a strategic supplier to Government.”
Sadiq Khan, the shadow Justice Secretary, said: “This large sum of money G4S are repaying taxpayers shows the true scale of the wrongdoing that went on. This, in addition to its poor performance on a number of other contracts, has led to huge damage to the public’s confidence in our criminal justice system.”
- 1 I've been called an abusive and dangerous parent, when all I did was listen to my transgender child
- 2 Migrant crisis: Greek soldier saved 20 people singlehandedly off Rhodes beach
- 3 Sofyen Belamouadden murder: The inside story of a crime that horrified Britain
- 4 Company breaks open Apple Watch to discover what it says is 'planned obsolescence'
- 5 UK weather: Britain braced for snow to replace sun as arctic air mass moves in
Migrant crisis: Greek soldier saved 20 people singlehandedly off Rhodes beach
Russian hack of President Obama's emails worse than previously admitted
Aaron and Melissa Klein: Oregon anti-gay bakers ordered to pay $135,000 after refusing to make cake for same-sex wedding
UK weather: Britain braced for snow to replace sun as arctic air mass moves in
Nepal earthquake: US Pastor Tony Miano sparks outcry by suggesting Nepalis should convert and not rebuild their 'pagan shrines'
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband
The sickening truth about food banks that the Tories don't want you to know
Migrant boat disaster: Ukip candidate mocks victims in sickening Twitter post
Nigel Farage wants the BBC to stop making programmes like Doctor Who, Strictly Come Dancing, and Top Gear
Global warming: Scientists say temperatures could rise by 6C by 2100 and call for action ahead of UN meeting in Paris
General Election 2015: Britain would become a 'communist dictatorship' under Ed Miliband and Nicola Sturgeon, claims wife of Michael Gove
iJobs Money & Business
£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...
£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...
£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...
£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...