Serco: Police To Probe Prison Firm Over 'Fraud'
Security firm Serco faces a police fraud investigation over its £285m prison escorting contract.
Serco staff allegedly recorded prisoners as having been delivered ready for court - a key performance measure - when in fact they were not, the Ministry of Justice (MoJ) said.
The contract, which covers prison transfer services in London and East Anglia, has been put under administrative supervision with immediate effect.
Justice Secretary Chris Grayling said: "It's become very clear there has been a culture within parts of Serco that has been totally unacceptable, and actions which need to be investigated by the police.
"We have not seen evidence of systemic malpractice up to board level, but we have been clear with the company - unless it undertakes a rapid process of major change, and becomes completely open with Government about the work it is doing for us, then it will not win public contracts in future.
"The taxpayer must know that their money is being properly used."
Both the MoJ and Serco's directors have asked City of London police to investigate the actions of the staff working on the prison escorting contract.
Evidence of potentially fraudulent behaviour emerged as part of the audit work announced by Mr Grayling in July.
The audit work came in the wake of an electronic tagging scandal, in which G4S and Serco were both accused of overcharging the Government for monitoring offenders.
In light of the new findings, Serco have agreed to repay all past profits made on the prison escorting contract and to forgo any future profits.
The FTSE 100 giant has told the MoJ that no member of the board had knowledge of the allegedly fraudulent practice.
Chris Hyman, chief executive of Serco Group, said: "The Justice Secretary is right to expect the highest standards of performance from Serco.
"I am deeply saddened and appalled at the misreporting of data by a small number of employees on the contract.
"This is a very serious matter for the customer and for us. We will not tolerate any wrongdoing and that is why we have referred this matter to the police."