Serco agrees to repay £68.5m after tagging scandal

Electronic monitoring of offenders gives authorities the ability to track their whereabouts

Private security firm Serco has agreed to repay £68.5m to the government for overcharging to tag criminals, says the Ministry of Justice (MoJ).

Serco and another company, G4S, allegedly charged the government for electronically monitoring people who were either dead or in jail.

The government also uncovered problems with G4S's contract to provide facilities management in courts.

The matter has been referred to the Serious Fraud Office (SFO).

Both companies have withdrawn from the bidding process to win contracts to supervise offenders on their release from prison.

They were stripped of their responsibility for tagging criminals in the UK earlier this month.

'Significant weaknesses'

Secretary of State for Justice Chris Grayling said his department had been "found wanting" in its management of the contracts.

He said a review into its practice had found "evidence of good practice but also significant and long-standing weaknesses in MoJ's management of contracts".

The Justice Secretary said he would implement the report's findings "in full" by the end of March 2014.

Mr Grayling said G4S had not yet agreed a position on repayment and discussions with the company were continuing.

"I remain determined to pursue all legal options to recover the taxpayer's money," he said.

Mr Grayling said he had identified "significant anomalies" in the two companies' billing practices, denouncing their conduct as "wholly unacceptable".

The money paid by Serco would reimburse the government for the electronic monitoring contract and the investigation, he said.

It also included £4.2m for the cost of the transfer to new monitoring arrangements.

Mr Grayling added: "As with all full and final settlements, in the event of criminality being established with material impact, we would look again at our contractual position."

He said the case had been referred to the SFO to see if dishonesty had taken place.

An SFO spokesperson said: "We are aware of the MoJ's referral and will urgently consider the information they pass to us."