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G4S and Serco (Contracts Update)

Volume 577: debated on Wednesday 12 March 2014

Further to my previous statements to Parliament on contracts my Department holds with G4S and Serco, I want to provide the House with an update on the situation concerning G4S’s repayment of money owed to the Government.

On 19 December 2013, Official Report, column 128WS, I announced that Serco had agreed to repay £70.5 million plus VAT to reimburse the Government for money owed on the electronic monitoring and prisoner escort contracts, and for other costs incurred.

Discussions with G4S on repayment have continued and I am now in a position to inform the House of the financial settlement we have reached. G4S has agreed to repay £108.9 million plus VAT to reimburse the Government for overpayments made by my Department under the electronic monitoring contract and to cover direct costs to Government arising from these issues. This sum also includes £4.5 million to cover the cost of overpayments made on two contracts held by G4S for facilities management in the courts, both of which were referred to the Serious Fraud Office in December.

I am satisfied on the basis of PwC’s forensic audit, and having taken appropriate advice, that this represents a good deal for the taxpayer. In the event of criminal charges being brought we would consider whether further sums are due from G4S.

This is a welcome step, which recovers in full the money owed to the taxpayer. Discussions between the Cabinet Office and G4S on corporate renewal continue. This process is not complete and the Minister for the Cabinet Office will make a further statement on corporate renewal in due course.