LONDON Dec 12 British outsourcing group Capita
will take over contracts to tag criminals from rivals
G4S and Serco on an interim basis by April next
year, the British government said on Thursday.
Both G4S and Serco are being investigated by the Serious
Fraud Office after an audit showed they had charged for tagging
criminals who were either dead, in prison or had never been
tagged in the first place.
As a result, Britain is reviewing its biggest contracts with
the two firms and has barred them from winning new central
government work pending the outcome, expected in December.
G4S and Serco hold some of Britain's largest outsourcing
contracts, and generate 10 percent and 25 percent of their
revenue, respectively, from the central government.
Justice Secretary Christopher Grayling said Capita, which
has already been named a preferred bidder to take on the
contract permanently, will now deliver the electronic monitoring
service on an interim basis before any new deal begins.
G4S and Serco's tagging deals expire on March 31, 2014, with
a new contract to begin later in 2014. During the interim period
Capita will use Serco and G4S's systems and equipment.
Last month G4S offered to repay 24 million pounds ($40
million) to the government for overcharging on the tagging
contract, while Serco has said it will repay any amount due.
Since Britain first raised concerns over the tagging
contracts in May, both G4S and Serco have lost their chief
executives, launched their own internal inquiries and begun
top-down reorganisations to help persuade Britain to continue
working with them.
Shares in G4S were down 1.5 percent to 256.4 pence at 1119
GMT, while Serco was down 2.2 percent to 434.8 pence.
Shares in Capita, which runs services such as evaluating
whether disability claimants deserve benefits, the pension
scheme for the Ministry of Defence, and radios for police
forces, were down 1.4 percent to 981 pence.