The fall

In July 2013 Chris Grayling announced in the Commons that his department had found evidence of serious and sustained overcharging by G4S and SERCO on contracts for electronic monitoring offenders – charges for people who were not being monitored, or who were in some cases back in prison, abroad or dead. This had come to light in preparation for re-tendering of the contract which dated back to 2005 (HC Deb 11 July 2013, col. 573). The overcharging went back many years, and involved tens of millions of pounds. Forensic audits had been started with which SERCO offered, but G4S initially refused, cooperation. It was G4S's most unwise refusal which triggered Grayling's reference of the matter to the Serious Fraud Office (SFO), even though he conceded he had no evidence of criminal behaviour. Officials had known “some of the issues around billing” as early as 2008, but “nothing substantive” was done. But – distinction! – while Grayling was “disappointed” that his staff may have known about this for years and done nothing, he was “angry” with the contractor.

Grayling's statement neatly disabled Labour. Not only had he already taken the most dramatic and comprehensive action possible but, as he quickly pointed out, the contracts had been left, and the malpractice started, under the Labour government, as Straw immediately recognised. Moreover referral to the SFO – not known for its speed of action – erected a shield against awkward questions about his department's precise role until after the 2015 election. (The NAO did indeed later decide that because of the SFO inquiry, they could not investigate the contractors’ assertion that they had told the civil servants what they were doing: NAO, 2013c.) The SFO investigation was still ongoing as this book went to press.

What did the contractors do wrong?

Extraordinarily, we do not yet have an account of what was done by whom and when – and may never have. We do not have the terms of the contract, the MoJ having refused disclosure on the puzzling grounds that it could prejudice investigations (puzzling, because of course all the parties know the terms – only the public is being kept in ignorance). Nor figures for how frequent the malpractices were and what proportion of the companies’ income was wrongly charged.