Shares in Serco (LSE: SRP) fell by more than 2.5% in early trade this morning, in anticipation of the investigation outcome relating to claims it overcharged the government for tagging criminals.
Following the government review, Justice Secretary Chris Grayling today ordered Serco to repay £68.5m of taxpayers’ money, with the security services company raising the estimated costs from the scandal to £36m from £27m, not counting the aforementioned payment of nearly £70m.
Alongside G4S (LSE: GFS), it is claimed that both firms charged the taxpayer to electronically tag people who were not being monitored, whether in prison or out of the country — or, worryingly, a small number who were deceased.
The share of both companies’ government contracts for monitoring criminals has been passed to Capita. During the review, the government found “serious issues” in two G4S contracts, which have been passed on to the Serious Fraud Office. Shares in G4S also slipped by around 2.5% this morning.
