Review of electronic monitoring contracts

Serco Group plc (Serco), the international service company, notes today's announcements from the UK Ministry of Justice (MoJ) and the Cabinet Office. These reflect the initial findings of the independent audit of the electronic monitoring contract originally let in 2005. The audit was commissioned by the MoJ on 17 May 2013.

The initial findings of the audit have highlighted to the MoJ matters of potential concern in relation to billing practices. Serco has therefore agreed with the MoJ that a detailed investigation into the contract should continue with Serco's full cooperation. The MoJ has stated that the current estimate of the amounts involved are in the low tens of millions of pounds in total for both companies since 2005. We have confirmed that we will repay any amount agreed to be due.

Given this investigation, Serco has decided to withdraw from the re-tendering process for the electronic monitoring service. The MoJ has reconfirmed that Serco continues to be the single remaining bidder for the South Yorkshire group of prisons. However, the award will be delayed and is dependent on the outcome of MoJ's audit.

We will cooperate fully with the MoJ on their audit of other contracts with the Department and with the Cabinet Office on their wider review across other UK government contracts. The Justice Secretary, who said that Serco is one of the Government's biggest and most important suppliers, expressed his gratitude for Serco's cooperation.

Christopher Hyman, Chief Executive of Serco Group plc, said: "Serco is a business led by our values and built on the strength of our reputation for integrity. These values lie at the heart of the many thousands of our people who are endeavouring to deliver the highest standard of service to our customers around the world. We are deeply concerned if we fall short of the standards expected of all of us. We are therefore taking this extremely seriously and will continue to work closely with our customer to resolve their concerns in this matter.  We will not tolerate poor practice and behaviour and wherever it is found we will put it right."

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