Serco=Service Corporation=Outsourcing=Friends In High Places?

You all remember Serco Leisure Operating Ltd

contracted to West Lancashire Borough Council to provide leisure services, and what happened to the Beacon Park Golf Course as Serco breached planning consent for the amount of landfill dumped on the driving range and another large part of the course?

The Serious Fraud Office has belatedly fined Serco £22.9million over its electronic tagging scandal. It follows the £70million settlement over allegations it charged for monitoring phantom crimes. But remarkably the fine reflects a discount of 50% as a result of Serco’s self-reporting, as well as its significant and substantial cooperation with the investigation!

Under the “deferred prosecution agreement”, the firm’s UK subsidiary Serco Geografix Ltd (SGL) has taken responsibility for three offences of fraud and two of false accounting related to its contract with the Ministry of Justice between 2010 and 2013. Yes, it’s taken six years for Serco to be dragged kicking and screaming to pay up for its criminal action, robbing taxpayers!

Serco itself writes “The SFO has recognised the significant steps Serco has taken to reform itself, including the thorough implementation under independent supervision of a comprehensive Corporate Renewal Programme approved by the UK Government. This programme included over 80 actions and initiatives, and included rewriting our system of management control, as well as strengthening our bidding, contract management, internal audit and management assurance processes.

Rupert Soames, Serco group chief executive, said the company was “mortified, embarrassed and angry” that it had been caught understated the level of profitability of its Electronic Monitoring contract in its reports to the Ministry of Justice six to nine years ago.

“Serco apologised unreservedly at the time, and we do so again. Nobody who sat on the Board of Serco Group, or who was part of the Executive Management Team at the time these offences were committed, works for the Group today”. So that’s alright then?

In 2013 Serco referred itself to the SFO, and along with outsourcing company G4S faced allegations it had been charging the MoJ for monitoring offenders in the community that were already in jail, had left the country or were, um, dead.

Under the agreement, which is subject to court approval, Serco will not face formal criminal charges. SGL will pay a fine of £19.2m together with £3.7m related to the SFO’s investigation cost.

No damages will be payable to the MoJ because the SFO has agreed that Serco has already fully compensated the department in respect of the offences as part of a £70m settlement paid by the firm to the department in December 2013. Friends in high places? You bet! And especially in West Lancashire Borough Council, where its planning breach at the Beacon Park Golf Course has led to another year of misery for senior golfers but no penalty for Serco.

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