Absent UK boss adds to Serco's woes

Jeremy Stafford's role in government contract unit in doubt after several weeks out of the office

The head of the Serco's scandal-scarred division responsible for UK government contracts, is currently absent from work, adding to the group's leadership crisis.

On Friday, group chief executive Chris Hyman shocked the market as he announced his resignation after a series of headline-grabbing failures, including charging the taxpayer for electronic tags used on dead criminals. However, The IoS can reveal that UK and Europe chief Jeremy Stafford has also not been working since the start of the month and there is no indication of when he will be able to return.

Mr Stafford's absence is significant because it has been widely speculated that he will be forced out of Serco, which runs great swathes of the public sector from Ofsted inspections to the National Physical Laboratory.

It is also likely that government investigations and a potential Serious Fraud Office probe into Serco's problems – which also included rogue staff allegedly falsifying records on a £285m contract to transport prisoners – would want to talk to Mr Stafford. "The bloke who's supposed to be in charge isn't even there," said a source, though it is thought that Mr Stafford has reasonable grounds for his prolonged absence.

As part of an organisational revamp designed to placate furious ministers, announced late last week, Serco has split Mr Stafford's division into distinct European and UK businesses. It is unclear what this means for Mr Stafford, but Serco insiders said that managerial details had yet to be finalised.

Mr Hyman had been in charge of Serco for more than a decade, but industry sources said that his position had become untenable in recent months. Serco's Americas boss, Ed Casey, will take over on a temporary basis, but the board wants a permanent successor to come from outside the company.

This would help with what Serco has described as "corporate renewal", which includes an overhaul of its governance in an attempt to persuade public-sector clients that it is fit to work on taxpayer-funded contracts. Serco wants to complete this process quickly, having already fallen out of the FTSE 100 after its summer travails.

The group also wants to prove that it has learnt from its errors before decisions are made on the awarding of several lucrative contracts. These include a Ministry of Defence deal to run the department's estate, which include naval bases.

Serco declined to comment.