Private security company G4S has admitted it has overcharged the ministry of justice more than £24mn on its contract for the electronic monitoring of thousands of offenders in England in a practice that was going on for years.
The company said that an external review it had commissioned by the law firm Linklaters had confirmed it had been wrong to consider it was contractually entitled to bill for monitoring offenders when tags had not been fitted or after they had been removed.
G4S said it had apologised to the ministry of justice and issued credit notes for £23.3mn that had been incorrectly billed between 2005 and May 2013. A further credit note for £800,000 is to be issued to cover continued overcharging that has happened since June.
The admission by G4S comes after the Serious Fraud Office announced earlier this month that it was launching a criminal investigation into G4S and Serco for overcharging on criminal justice contracts.
The G4S statement was timed to coincide with the publication of a National Audit Office memorandum which shows that, in some instances, both contractors were charging the justice ministry for months or years after electronic monitoring activity had stopped.
The NAO also says the firms charged the ministry over similar timescales when electronic monitoring was never undertaken and charged multiple times for the same individual if that person was subject to more than one electronic monitoring order at the same time.
Both G4S and Serco are due to appear before the Commons public accounts committee today to give evidence on public sector contracts.
Serco has also said that it will refund any amount that it agrees represents overcharging.
The justice ministry has not yet agreed to any refund offers made by either firm.
Ashley Almanza, the G4S Group chief executive, said the company’s announcement was an important step in setting the matter straight and restoring trust.
“The way in which this contract was managed was not consistent with our values or our approach to dealing with customers. Simply put, it was unacceptable and we have apologised to the ministry of justice,” Almanza said. “As part of a wider programme of corporate renewal, we have changed the leadership of our UK business and we are putting in place enhanced risk management and contract controls.
“We remain committed to working with the ministry and the UK government to resolve this matter and to provide enhanced oversight of service delivery and contract performance.”