The justice secretary, Chris Grayling, has called in the City of London police to investigate alleged fraud by Serco staff working on a £285m contract to transport prisoners to and from courts across London and East Anglia.
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The Ministry of Justice (MoJ) said detailed audit work initiated as a result of the investigation into the tagging contract in July had shown that some Serco staff were recording prisoners as having been ready for court when in fact they were not. This data is a key performance measure for the contract that could determine whether or not it is terminated.
It is thought the "potentially fraudulent behaviour" has been going on since last summer, when persistent delays in transporting prisoners between jails and courts led to an official improvement notice being issued.
It is alleged that instead of ending the delays, Serco staff simply fiddled the paperwork, for example by recording the time that the van arrived at court as if that meant prisoners were ready to appear in the dock.
As a result, Serco has agreed to repay all past profits on the contract, and forgo any future ones. But I doubt that will change the culture of fraud which seems to be becoming pervasive in UK PPP contracts. When its easier to juke the stats than perform the service, these companies will do the former every time.
Meanwhile, the NZ government still thinks Serco is fit to run a prison in New Zealand. How long till similar scams emerge here? And would Corrections even notice if they did?
The lesson from the UK is clear: private companies cannot be trusted to perform these services. They will cheat and lie to get their profits, rather than actually doing the work. We should heed that lesson, and stop contracting out immediately.