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'Cheats' Serco and G4S forced to face a grilling from powerful group of MPs
Outsourcing industry dogged by embarrassing exposure of failings is braced for public scrutiny
Executives from scandal-hit corporate giants Serco and G4S face a public grilling from a powerful group of MPs, who are determined to "lance the boils" of failing government contractors.
A source on the Public Accounts Committee said the two companies, which have seen their shares battered this year, will be questioned on Wednesday about "suspicions that they cheated on contracts".
The Serious Fraud Office (SFO) has launched a criminal investigation into G4S and Serco, following allegations they had billed the Ministry of Justice for monitoring 3,000 non-existent offenders on a lucrative electronic tagging contract. The companies could potentially have made tens of millions of pounds for claiming that they had tagged offenders who were already in custody, had left the country, or had died.
Serco, which runs the Docklands Light Railway in London, schools inspections, and the Atomic Weapons Establishment in Reading, has struggled since the scandal, issuing profit warnings for both 2013 and 2014 last week. Staff have also been referred to the City of London police over irregularities in a prisoner escort contract.
G4S, which is one of the world's biggest employers with 620,000 staff, has found itself under public scrutiny for the past two years after it failed to provide enough security guards for the London 2012 Olympics. Both companies have said that they will co-operate fully with the SFO investigation.
