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G4S probed for overcharging

Tuesday, July 16, 2013

The recent scandal surrounding the overcharging of electronic tagging services has seen both public and private sectors coming under heavy criticism for the mishandling of procurement and mismanagement within contract governance.

Private security giant G4S has been accused of overcharging and may now face a criminal investigation by the Serious Fraud Office, for the tracking of individuals who have moved abroad, returned to prison, or even died.

G4S have pointed the finger at the government for failing to provide adequate data to be able to effectively identify those who should no longer be tagged, saying: “We will always stop charging when a curfew order formally ends. However, when no end date is given, as in bail cases, we have no legal authority to suspend or close a curfew order. We must receive specific instructions from the courts or a prison in these cases.”
The criticism levelled at the mishandling of the contract by the government echoes past failures by the civil services to cope with large procurement and outsourcing contracts.

Chris Halward, Director at NOA Pathway and Professional Development discussing the G4S overcharging scandal on BBC radio 4 Today programme http://www.bbc.co.uk/programmes/p01cms9x …, described how skills need to be developed “to improve the skills that people have, in order to ensure that these services that are outsourced are outsourced effectively- it does work but you have to do it well and you have to ensure relationships are managed correctly.”

The Today programme also addressed the issue of private firms being used as scapegoats by public sector departments, with failure in the public eye exaggerating failed contracts while successful projects often remain unnoticed.

Both commenters agreed that the government has room for improvement in its handling of outsourced contracts. Tom Gash, Director of Research at the Institute for Government, said: “there really has to be a question about the government’s ability to manage these contracts, the Institute for Government’s research last year, showed that civil servants themselves weren’t very confident that they had the requisite skills.”

G4S which already has a poor reputation for outsourcing within the public sector due to past scandals, including the provision of staff for the Olympic Games, saw shares fall, resulting in a loss of £240 million over the last few days.

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