Cabinet Office investigates Serco government contracts

Serco Group, one of the companies in the management consortium which operates the Atomic Weapons Establishment, is under investigation by a team from the Cabinet office following accusations that it has overcharged the Ministry of Justice by millions of pounds on contracts for tagging offenders.

The Sunday Times newspaper has reported that a team of investigators led by Bill Crothers, the Cabinet Office's chief procurement officer, is looking at Serco's largest contracts with the British government, including the contract to manage the Atomic Weapons Establishment.

In August Serco and G4S were accused by Chris Grayling, the Justice Secretary, of overcharging the government by tens of millions of pounds for the electronic tagging of offenders after it was revealed that they had been charging for tagging offenders who were in prison, had left the country or had even died.  Serco has also been accused of altering records on the transport of prisoners to and from London courts.

In addition to the Cabinet Office investigation, the Ministry of Justice has passed a file on Serco to the Serious Fraud Office with a request to investigate whether criminal charges should be brought against the company.  The Ministry has said that no new contracts will be awarded to Serco until investigations have been completed.

Serco, together with Lockheed Martin and Jacobs Engineering, is one of the companies in the AWE Management Ltd consortium which currently manages the Atomic Weapons Establishment, where the UK's nuclear weapons are manufactured and maintained.  The consortium has a 25 year contract, currently worth around £1 billion per year, which runs until 2025.

About 25 percent of Serco's annual revenue comes from work for UK government departments, and the company also has contracts with a range of overseas governments.

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