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Implications of Serco being a supplier of services to governments

Governments are expected by their citizens, and funded by their taxpayers, to do hard-edged things: to defend their nation, they keep weapons which, if ever used, would wreak unimaginable damage to people and property; to keep communities safe, they hold people in prison; to secure their borders, they deport people who don’t meet their entry and immigration criteria; and in managing their budgets, they make spending trade-offs which impact some people unfairly.

But they are also subject to scrutiny by opposition parties, by the press and by campaigning organisations. Every newspaper, every day, has stories of government incompetence and maladministration, and of the allegedly cruel and inhumane consequences of their decisions. Some of this criticism will be fair, objective and balanced; an awful lot will be partial, biased, subjective and unfair. That is a fact of life of being a government in most free countries. 

As a supplier of government services, we are expected by our customers to help them do some of these hard-edged things. So Serco helps governments maintain weapons; we help governments keep people in custody; we help governments deport people; and we help them manage the consequences of difficult spending decisions. 

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We use our governance processes to pick and choose which governments we will deal with, and which services we offer; by way of example, we might be happy to provide air traffic control services to a particular government, but not custodial services if we do not think that their justice system aligns with our Values. However, the vast majority of our customers are democratically elected governments, pursuing policies which are publicly acknowledged and which are legal; we therefore have to be suitably cautious when thinking that we might super-impose our own morals on theirs. Although there are occasions when we have refused to do certain types of work for governments, that is by exception and, on the whole, where they lead within the law and in accordance with our Values, we follow.

As a consequence, and entirely properly, we too are subject to scrutiny by opposition parties, by the press and by campaigning organisations. And in many cases, this scrutiny is all the fiercer because to some people the idea that private companies deliver sensitive government services is in and of itself anathema. In the normal course, therefore, we face a level of scrutiny and public discussion around our services which is greater than would be the case for companies doing business with each other. The failure of a construction company to deliver a multi-million pound new office building on time to another company is unlikely to be a matter of public consequence or commentary. If Serco fails to pay the correct overtime to a teacher employed by a local council, however, it can be the lead story on local press, radio and TV for a month, and our failure will be accessible via online search engines in perpetuity. Almost every service we run is subject to public scrutiny, and quite rightly so. However, in the same way that much of the scrutiny and comment aimed at governments is often far from impartial or fair or based on facts, so we must have broad shoulders and accept that we will often be unfairly criticised in public.

It is therefore important for those who analyse our ESG performance to understand that public criticism and scrutiny is an important and inevitable part of our business. Some of it will be fair, objective and balanced; but some will be partial, biased, subjective and unfair. The year in which a review of online search engines or social media does not reveal criticisms of our business in the press or in Parliament will be the year that we are not doing our job, which is to serve governments even when they do hard-edged and difficult things. Some ESG analysts take a binary view: for them, any public criticism of a company involving detention, weapons or immigration enforcement is an automatic black mark. It’s in the press, it must be right, no? Well, no, actually.

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A worked example: Yarl’s Wood Immigration Removal Centre

On behalf of the UK Home Office, we manage the Yarl’s Wood Immigration Removal Centre, which historically has been used to house women in the final stages of their deportation. The process of removing women from the country tends to be very much more controversial than that of removing men, and Yarl’s Wood has been subject to numerous campaigns from groups who have sought to delay removal of individuals or to press for the closure of Yarl’s Wood in its entirety. This attracts a great deal of press attention and commentary. Some is fair, balanced and objective; most is unfair, unbalanced and subjective. All of it is available to anyone searching on the internet.

On the other hand, Yarl’s Wood performs an essential service in the eyes of the UK Government: assisting with the delivery of its immigration policies. Partly as a response to all the campaigning groups, Yarl’s Wood is also subject to significant volumes of supervision and inspection.

There is an Independent Monitoring Board (IMB), who have access to Yarl’s Wood 24/7, and who report annually to the Home Secretary; the Home Office are co-located on site; in addition to the IMB reports, in the last five years there have been no fewer than six independent reports, two from Her Majesty's Inspector of Prisons, one from the Home Office – ‘The Shaw Review’, one from the National Audit Office, one from the Care Quality Commission, and one independently commissioned by Serco – ‘The Lampard Review’. Whilst not uncritical, and urging improvement in some areas, these paint a generally humane picture of life at Yarl’s Wood and are at variance to the claims of some of the campaign groups as reported in the press.

Whilst there is no avoiding the fact that the women held at Yarl’s Wood are not happy to be there – deportation is a hard-edged and difficult part of government policy – but we know of no government which does not do it as part of the implementation of their immigration policy. The important thing is that it should be done humanely and well, and the people managing it should be constantly held to high standards. We invite anyone wishing to judge Serco’s track record in this area to read the various reports: