G4S Admits Stealing £24m from Taxpayers, Govt Gives Them £1bn of Public Money

David Simonds G4S 14.07.13

Private security firms G4S and Serco have over charged tens of millions of pounds for electronic tagging services provided to the Ministry of Justice, a report by the National Audit Office (NAO) confirms. G4S has offered the government £24.1m in credit notes ahead of their appearance before the Public Accounts Committee this afternoon – an offer the government rejected, while an audit reveals the true figure of the fiasco.  But G4S need not be too concerned, they still have £1bn of business in public services to cushion the blow.

The Theft of Public Money


MoJ spending on electronic tagging has soared from the original £107m contract offered to G4S to £700m (including Serco) in 2012. Both firms pulled out of bidding for new electronic tagging services contracts earlier this year, when the Serious Fraud Office revealed it was opening a criminal investigation into potential mass over charging on the existing contract.

The NAO report, issued yesterday, reveals over charging on an industrial scale.  The private security firms have been charging for services never rendered, for the same work several times over, and for long periods (years) after electronic tagging had ceased. Highlights include:

  • G4S billed the taxpayer £4,700 for monitoring an offender even though the equipment had been removed 935 days earlier.
  • Serco had been unable to install equipment at a criminal’s address but carried on charging for almost five years, at a cost of £15,500.
  • A criminal was handed four separate court orders for four offences, leading Serco to bill the taxpayer four times “rather than one charge for the subject”.
  • G4S charged for 612 days’ tagging – at a cost of £3,000 – even though it had been informed the offender had been sent to prison and the company had removed the monitoring equipment from his home.

Unfortunately, this is far from the first issue regarding G4S and the other firms providing public law and justice services for profit.

The Cost of Failure


The case for outsourcing these services to G4S always follows the same logic – efficiency, modernisation, higher quality services at a lower cost.  Yet this is rarely, if ever, what the tax payer actually gets once the ink has dried on the contracts.

The Olympics

G4S won the £284m contract to secure the Games in March 2011.  Later, the government was forced to call in the armed forces to secure the London 2012 games after G4S announced a huge shortfall in their required staff numbers just weeks before the event.

The Death of Jimmy Mubenga

46 year old Jimmy Mubenga was deported by G4S guards in October 2011, yet before the plane even left the tarmac at Heathrow – Mubenga was dead.

Twenty one passengers and crew on the plane report hearing Mubenga repeatedly cry for help and that he could not breathe while several G4S guards applied aggressive methods of restraint – including pressing his head down below the level of tray on the back of the seat opposite for 10 minutes; known to carry a risk of asphyxia.  Paramedics were called after Mubenga stopped breathing, and he was pronounced dead at the scene.

Stuart Tribelnig, the Senior Detainee Custody Officer in charge of Mubenga’s deportation is a former heavy goods driver. He became a deportation custody officer for G4S after a four-week training course in 2007. He was in charge of the other G4S security guards during Mubenga’s deportation. Whilst on trial this week he was made to read out a string of racist jokes that he had texted to fellow G4S deportation guards.

This is just the tip of the iceberg – the independent report into G4S border security guards makes shocking reading.  The Home Office response to these issues was to castigate the doctors and lawyers who had brought the allegations to light, accusing them of “seeking to damage the reputation of our contractors”.

Slum Asylum Housing

In 2011, G4S were awarded a £620m contract by government to provide housing for asylum seekers.  G4S subcontracted this out to a network of smaller firms, and the results were disastrous. A recent Parliamentary Inquiry found that the firm has repeatedly failed to provide housing fit for human habitation.

Activist researcher John Grayson, who has supported tenants suffering these dreadful conditions to hold their slum landlords to account said:

“G4S is one of the companies responsible for what shadow minister of Immigration Chris Bryant described as ‘hideous conditions’ in asylum housing. G4S subcontractors have been exposed meting out punishment by harassing women who speak out against these conditions…. (including) Landlords abusing and punishing their tenants”

In fact, almost every service that G4S has been given to run has ended up costing us more, measured in pounds sterling or human suffering.

These human and financial costs of failure continue to pile up, as taxes paid in order to fund human welfare, are increasingly used to fund corporate welfare.

The Justice Privatisation Project Continues


G4S currently enjoys more than £1bn in contracts with the UK government.  The Ministry of Justice, the Department of Work and Pensions, The Department of Health, the Department of Education, the Ministry of Defence and the Foreign Office all contract out services to G4S.

The list of G4S infrastructure is eye watering:


G4S have been expanding their control of the police service since the mid 90’s and now manage:

  • 30 custody suites
  • 500 cells
  • A national database of 30,000 former police officers & staff contracted back to cover resourcing gaps
  • Large portions of the forensic service

Prison and Detention

Since the early 90’s governments have contracted out the build and management of prisons to the private sector.  At present, there are fourteen such prisons out of 139 prisons in the UK.

G4S now run 6 of Her Majesty’s Prisons, including HMP Altcourse which was the country’s first PFI prison, yielding even greater profits for G4S.

G4S pioneered the ‘Working Prison’ where inmates work a 40 hour week for next to nothing for private corporations such as engineering firm, Norpro.

Court Services

G4S run prison transport services & manned security.

Electronic Monitoring

G4S currently monitors 40,000 people in the UK every day.  It provides electronic tagging, voice verification and satellite tracking on behalf of the Ministry of Justice and the UK Border Agency.

They also design and build monitoring services and sell them back to government.

Immigration & Borders

G4S run two Immigration Removal Centres – these are effectively prisons in which to hold migrant families and individuals ahead of deportation.

G4S also run two regions of the UKBA’s COMPASS contract to provide accommodation for immigrants/asylum seekers.

Children’s Services

3 purpose built ‘secure training centres’ managed on behalf of the Youth Justice Board

7 specially designed residential children’s homes for children with severe emotional and behavioural problems.

G4S is now focusing on gaining more lucrative PFI contracts to build new prisons, as the government announces the closure of 7 existing prisons.  The firm has also built up a new Offender Rehabilitation Team to make use of the government’s decision to almost fully privatise the Probation service.  The government has announced it will put 70% of the service out to competitive tender – while banning the existing Probation service from competing for the contracts.

Last year, the public probation service met or exceeded all its performance targets – with victim feedback positive in 98% of cases, and in 2011 the service received the British Quality Foundation’s Gold Medal.  This is a service at the top of its game.  The government want to hand it over to companies like G4S, who’s performance history suggests our government is putting its ideological commitment to privatisation above its duty of care to the public.

A recent investigation by Cantor Fitzgerald has revealed that the total value of new services contracts (the amount of new stuff outsourced each year) handed to Ministry of Justice jumped tenfold in the last five years – rising from £8m in 2008 to £79m in 2012.  This is a rapid escalation in a long standing move to outsource justice.

So, while G4S and Serco once again stand shamefaced and red handed under the light of public scrutiny – what is the incentive for them to change their behaviour?  They have admitted behaviour which can only be described as industrial scale fraud, and the theft of public money.  No plans currently exist for those responsible to lose their jobs, or answer to their crimes in a court of law.  If you or I were caught stealing £24, we would face criminal prosecution.  Yet, a corporation like G4S can steal £24m, and get off with an apology and handing back its proceeds of crime.  On what planet is this considered a just system?

More proof, if it were needed, that we are living under a government whose primary purpose is to serve its corporate benefactors, not the public which grant it power.  For such corporations, the contracts keep coming, the good times keep rolling, and the tax payer picks up the bill.

Don’t Get Angry, Get Involved!

Sign and Share the petition to call for a police investigation into the overcharging of electronic tagging contracts.

Sign the petition to end the renewal of G4S and Serco contracts

Sign & share the petition to stop the privatisation of the Probation service

Keep up to date on direct actions against G4S here __________________________________________________________________________________________________________________________________________________

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9 thoughts on “G4S Admits Stealing £24m from Taxpayers, Govt Gives Them £1bn of Public Money

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