Government rejects £24.1m from G4S

The government has rejected an offer of £24.1m, the private security group G4S has claimed it owes after over-charging for the tagging of offenders.

It is thought that the Ministry of Justice (MoJ) has turned down the payment whilst working with G4S to establish how much the company owes the Government.

An internal review by G4S concluded that the overcharging was not due to “dishonesty or criminal conduct.

Also released today is a National Audit Office report into private security groups responsible for electronic tagging which included a forensic audit by PricewaterhouseCoopers (PwC).

The forensic audit was launched after the Government raised concerns over anomalies in the charges from G4S and allegations against the company made by a whistleblower formerly employed by G4S. 

The audit was extended to include Serco, another private security group which provides electronic tagging.

The NAO has disputed several of the charging practices from both of the companies. They found that both companies had been charging on the basis of the number of orders, rather than the number of those tagged and charging from the first instillation even if the instillation had been unsuccessful.

The report also said that the companies had been charging even when the electronic monitoring had ceased suggesting that the companies had been charging for monitoring for those who had escaped from the electronic monitoring.

The NAO report stated: “The providers’ view of the contracts was that they could not close an order until informed by an appropriate authority to do so. Until they received such a formal notification they continued to charge monitoring fees.” 
The NAO reported that G4S felt that the ministry should have been aware of how the company was billing as it had previously explained to the Ministry how it had interpreted the billing procedure in 2009.

G4S also stated, however, that “irrespective of the contractual position, the current management of G4S believes that the interpretation applied to historical billing practices was not appropriate in respect of periods when no electronic monitoring was taking place.”

Serco also told the NAO that it considers it charged in line with its genuine interpretation of the contract and that it was open about this to the Ministry throughout. Serco has stated publicly that it will refund any agreed overcharges.

The audit by accountancy firm PwC alleged the charging discrepancies had started at least as far back as the start of the current contracts - in 2005 - but could have dated back to the previous contracts in 1999.

The Serious Fraud Office has launched an investigation into G4S and Serco, and both firms have said they are "co-operating fully".

G4S is the largest security services provider in the world, with operations in more than 120 countries across six continents