12 July 2013

The surprising thing coming to light about the management contracts that SERCO and G4S have with the UK Justice sector is not that the Serious Fraud Office is investigating suspected corruption on a substantial scale – that is a reflection of private sector innovation at play – but that tiers of civil servants appear to have condoned deceitful practices.  Opportunism is a component of capitalism. Balance should be achieved with an integrity-rich administration committed to regulating in the public interest.

Officials responsible for protecting that public interest appear to have been captured by the UK Government’s wish to privatise services, and have become unconcerned about operational abuses. Tens of millions of pounds can only have been fraudulently extracted from service contracts if those responsible for oversight chose not to look too closely at what was going on.

And Ministers, having championed the fiscal advantages of introducing competition to public services, are now castigating officials for possible collusion with private sector ways. The Justice Minister expressed astonishment in the Commons that  “… some Ministry staff would have known about the practice for five years; they were aware of the problem but did nothing effective to address it.”

Will we find out that in due course that Ministers were advised but didn’t want to hear, or that officials decided not to tell Ministers about matters which they knew Ministers did not want to know? Where were the protected disclosures?  Perhaps this fits with the Transparency International Corruption Barometer report this week that in Britain 90% of those surveyed said that “…the UK Government is run by a few big entities acting in their own interest.”

The extent of the G4S and Serco fraud is uncertain, but special audits began in mid May.  A reluctance by G4S to cooperate with further audits suggests problems may have become entrenched from the start of contracting in 1999.