Outsourcing: it's the government's turn for a mauling

The electronic tagging scandal is finally muddying the mandarins, giving G4S and Serco some respite.

by Rachel Savage
Last Updated: 27 Mar 2014

Outsourcers will be breathing a sigh of relief, as the government takes its turn to be dragged through the mud over the scandals that have beset the industry in the last few years. Margaret Hodge, chair of the Public Accounts Committee, has lambasted the coalition over the negotiation, management and transparency of contracts (MT recommends the mandarins and ministers mug up with our advice guide if they have to go through a public grilling).

Hodge said Whitehall has to ‘urgently get its house in order’ after G4S and Serco overcharged for electronic tagging of criminals, some of whom were actually dead, abroad or in prison.

She called for Freedom of Information Requests to cover private contracts and contractors to be required to open their accounts to officials and the National Audit Office. G4S, Serco, Atos and Capita have already agreed to the measures, Hodge said – unsurprising, given that they are next to banks and energy companies at the bottom of the heap of public esteem.

‘It therefore appears that the main barriers to greater transparency lie within government itself,’ Hodge observed.

The government has also been criticised for not awarding contracts to small businesses or making the whole process so byzantine as to not be worth it. Electronic tagging company Buddi pulled out of a contract recently after spending £2m over two years bidding for it.

‘Civil servants are just not used to dealing with small companies,’ founder Sarah Murray told the Today programme this morning.

Some small relief then for G4S, which announced on Wednesday that it had taken a £136m provision for the tagging scandal, and its equally embattled rival Serco, which has nabbed Churchill’s grandson Rupert Soames from Aggreko to inject some Blitz spirit.

- Look out for MT’s feature on the crisis in outsourcing in April’s magazine.

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