G4S tagging investigation – many unanswered questions

Yesterday’s  announcement that Chris Grayling, the UK’s Justice Minister, has asked the Serious Fraud Office to investigate the firm G4S for alleged overcharging for tagging offenders has raised a whole range of questions.

For instance, why has the Ministry not released the results of the previous review (carried out by PWC) to G4S? “G4S has requested full details of the PwC audit findings and looks forward to receiving these in order to address any findings” they say.  They say they wanted to see that before agreeing to the “forensic audit” that the other firm involved, Serco, have signed up to.  G4S also point out that they “have not received a claim for a refund” .

It’s also important to note that these contracts were let way back in 2004. But that in itself raises more questions. Given this is clearly a supply market where technology was and is developing quickly, why on earth let a ten year contract, that appears to have locked in two suppliers with pricing which now looks very expensive compared to other countries?

Then we have the whole question of contract management. Checking that the supplier is charging you for services that they have actually provided is a relatively basic element of contract management, we might argue.

 I worked with the National Audit Office back in 2008 on a review of contract management in  Government service contracts and we found that generally it wasn’t great – including the one Ministry of Justice contract we looked at then (not this one, I should emphasise). We scored their performance as one of the two weakest of our eight sample contracts that were looked at, with weaknesses under headings including people, risk, planning and payment.

Chris Grayling has apparently suggested there may be disciplinary proceedings against civil servants who didn’t take action after uncovering evidence that officials knew in 2008 of problems.  There is also some talk that G4S may themselves have notified the Department that there were some issues. “The ministry has not commented on suggestions that G4S warned the MOJ in 2009 about anomalies in the charging arrangements” says the BBC.  So it’ll be interesting to see if he can pin the blame on anyone who isn’t long gone, retired or deceased.. another West Coast Rail “no-one is guilty” perhaps?

As we said yesterday, this could also have major fall-out for Serco and G4S. I have to say I will be surprised if they are found to have done anything malicious rather than perhaps incompetent. They just have so much to lose because of their volume of public sector business. Yet both firms are building up a bit of an unfortunate track record. G4S had the Olympic security issue, whilst Serco admitted altering data about their performance on an out of hours GP contract in Cornwall.

Anyway, all will no doubt become clearer on the tagging issue, although how long the SFO might take to investigate, I have no idea. Watch this space.

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Voices (4)

  1. Dave Orr:

    Will a bonus culture will lie behind this? – Did increased billing for tagging resulted in extra dosh for the people involved?

    Another shocking lapse of contract management, no doubt predicated on a “thin client” approach to contract management.

    “Thin client” is totally dis-credited here in Somerset with IBM and Southwest One, yet Barnet Council have gone into a massive, long-term contract with Capita, using the “thin client” model!

    BARNET – WATCH THIS SPACE…..Should be showing distress signs by 2014/15.

    1. Dan:

      Never fear Dave – Barnet haven’t appointed a contractor, they’ve appointed a PARTNER. This, I’m sure you’ll agree, will solve all known problems at a stroke without any of these namby-pamby ‘contract management’ skills needed (because they cost money and just rub people up the wrong way).

  2. Trevor Black:

    I expect in the next few weeks for a government spokesperson to make a statement along the lines that they didn’t know that this new procurement thing included contract management but that they are passing the investigation to their commissioning team to identify if any lessons have been learnt. The spokesperson may add that on advice from their leader Francis Maude contract management could hold the key and they will therefore seek advice from financial or legal professional bodies who know about these things.

  3. Bill Atthetill:

    I have an idea. It could kill a number of birds with a single stone, being:

    – under-performance from major cross-government suppliers (getting value-add)

    – under-performance from procurement teams across government in managing these cross-government suppliers (getting them to add value)

    – visibility and control over all the procurement folk across Central Government, including the Crown Reps (Bill Crothers “what are they actually up to”)

    When Bill gets infront of G4S with his Crown Rep to shame them into providing a refund, he should also negotiate a deal whereby the tagging technology is used to provide every procurement person (across Central Government) with an ankle tag to track and trace their activities. (If successful, it could be rolled-out across wider government.) He could start with his colleagues in Cabinet Office to ensure they’re acting as a team and adding value and that individuals aren’t just swanning around Government Departments looking for flaws and faults to build business cases for themselves. Or some of them aren’t sneaking down the Westminster Arms ‘before curfew’ having a few jars with their ex-colleagues and moaning about centralisation and integration and ‘holding out to the next election’. Imagine: he could look at a ‘live’ map of London and the UK and see where everyone is at any time and he wouldn’t need to leave his desk!

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