G4S to pay back £108.9m for overcharging on tagging contract

In 2013 an analysis of the government’s contracts with both Serco and their rivals G4S revealed that they had been overcharging for tagging offenders, some of whom were in prison, abroad or even dead. Following this a criminal investigation into G4S by the Serious Fraud Office (SFO) was launched.

Welcoming the agreement as a “good deal for the taxpayer”, Justice Secretary Chris Grayling warned that “in the event of criminal charges being brought we would consider whether further sums are due from G4S.”

The settlement will consist of a cash payment of £75.9m and credits for services already provided worth £33m.

G4S announced a total loss of £136m when it published its annual results on Wednesday, causing its shares to fall 7 per cent.

Strategic supplier

Ashley Almanza, G4S group chief executive, said in a statement: “The way in which the EM contract was billed was not consistent with the contract or the Group’s values and we have apologised to the MoJ and the government.

“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 that 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.”

Olympic problems

The company made a profit of £158m in 2012, but profits fell following the fiasco over its promise to provide security services for the London Olympics, which saw the army called in at the last minute to do the job.

Discussions on “corporate renewal” between the company and the government are still ongoing.

Rival company Serco agreed last December to pay back £70.5m for the tagging scandal.