Belfast Telegraph

Wednesday 3 September 2014

Firm given Nama deal accused of defrauding Government of millions

Angry: Chris Grayling

NAMA has refused to comment after a company it awarded a multi-billion-euro contract was accused of fraud in the UK.

Barely a week after the National Asset Management Agency (Nama) awarded Serco a deal to help manage loans with a face value of nearly €2bn, the UK government has accused the company of overcharging by millions of pounds.

In the UK, Serco, along with the security giant G4S, are accused of billing the Government for electronically tagging prisoners that did not exist. Between them, they are accused of overcharging by as much as £50m.

As part of the privatisation of the UK's prison service, Serco has a contract to run tagging schemes where offenders have to wear an electronic tag when they are released from prison. The tags allow authorities to track the wearer, and it is an offence to tamper with the tag.

Now, however, it has been alleged that Serco was charging the Government for tagging prisoners who were dead, had left the country, or did not have to be wear one.

Ministry of Justice sources said although they typically had 15,000 offenders on a tag at any one time G4S and Serco had been charging them for 18,000 – meaning one in six of the charges was spurious.

Justice Secretary Chris Grayling described the allegations as a "wholly indefensible and unacceptable state of affairs".

The allegations come barely eight days after Nama awarded a contract to Serco and Australian firm Pepper to "service" or manage a loan book with a nominal value of €1.8bn. The true value of those loans is likely to be significantly lower.

After the alleged fraud at the prisoner-tagging operation was uncovered, Serco said the investigation had highlighted "matters of potential concern in relation to billing practices".

The company said it was cooperating with the investigation and will repay any amount agreed to be due.

"Given this investigation, Serco has decided to withdraw from the re-tendering process for the electronic monitoring service," Serco said.

The company is the sole bidder for another prison contract in the UK, but its success or otherwise will depend on the results of a government investigation into these allegations.

Company chief executive Christopher Hyman said he was "deeply concerned" at the allegations and was taking them "extremely seriously".

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