UK gov dials 999 over Serco prison escort fraud claims

Outsourcing giant Serco is being probed by the cops over allegations of fraud relating to its Prisoner Escort and Custody Services (PECS) contract with the Ministry of Justice. Under the terms of the contract, Serco is supposed to ferry defendants from prison to court on time and is measured against this. The suspected fraud …

[Anonymous Coward]

Rule 1

Rule 1 of contracting - you need a strong, well-resourced client-side team to properly administer the contract.

Anyone who trusts the contractor to self-certify their KPIs is, deluded, insane and deserves everything they get. So in this case I hope the MoJ are held to account for shitty contract management too.

I'm not holding my breath.

[The BigYin]

Re: Rule 1

Civil servants are immune to any censure. But "lessons will be learned" and "core competencies will be reinforced". Then a few consultants brought in at extortionate expense to rubber stamp everything and nothing will actually change.

But our MPs' friends will be much richer, so that's all right then.

[Yet Another Anonymous coward]

Re: Rule 1

Rule 1 of contracting - you need the suppliers children held at a secret location by a man with facial tattoos and a knife.

[Ralph B]

They'll Get Away With It

After all, if Serco are found guilty, who will drive them from court to prison?

[theblackhand]

Re: They'll Get Away With It

Serco of course.

At least the KPI's will show they were delivered to prison....

[Omgwtfbbqtime]

Re: They'll Get Away With It

Geo Amey or Group4 - at least until they get caught too.

[Anonymous Coward]

SERCO

I left when I realised they couldn't get laid in a brothel, plenty of people managers, no skilled employees, they draft in expertise at great expense to set up a project, then get the lowest paid lowest skilled people to run it, then just before renewal will "refresh" all the kit at cost price if the renewal is signed

[Anonymous Coward]

Re: SERCO

There are some exceptions. Serco handle our facilities management. The local manager is very good. Also damned sexy, if I weren't married....

[Yet Another Anonymous coward]

Re: SERCO

Presumably he/she/it is also damn sexy if you were married?

[Anonymous Coward 101]

Unintended Consequences

The peons whose job it was to sign the documents stating when prisoners were ready for court were most likely on a bonus, or knew they would get their arses kicked if they didn't get prisoners to court on time. People aren't stupid, and will tell lies to save their jobs, particularly when they are made to do the impossible.

Of course, given Serco created these conditions, they should have checked up on this. They appear not to have done so, and are being deservedly humiliated.

[mike2R]

Re: Unintended Consequences

relevant Dilbert

[Number6]

Re: Unintended Consequences

It's always worrying when a Dilbert cartoon from the 1990s (early, at that) is scarily accurate for something happening now.

[Anonymous Coward]

Re: Unintended Consequences

And it happens very often. Scott Adams is an economist by training, and good economists can usually foresee what will happens when monkeys are handed keys to a banana plantation. Which is why so many of them get bought when hedge funds and banks give them the keys, and put them to work for the monkeys.

[Martin 47]

Re: Unintended Consequences

I agree with all the above except he/she would not be on a bonus, you have to be much higher up the Servo food chain than someone who actually does work for a customer to get any bonus.

Of course this just means that those who do get bonuses exert tremendous pressure 'downwards' to make sure the numbers show the KPI's are met.

[nsld]

Why are they being given chances?

I dont get this, they have now been caught twice on two seperate contracts committing fraud.

Surely thats a material breach of the contract and it can be terminated without compensation?

[Tom Wood]

Re: Why are they being given chances?

Yeah but who else is going to do it? G4S?

[Anonymous Coward]

Re: Why are they being given chances?

Here's a wild idea. Totally blue sky thinking. But hear me out, before you call me crazy.

What if... the government... recruited and paid employees directly to ferry prisoners to and from court? That way, they'd only be paying their employee's wages, rather than their wages plus a fat profit element to an incompetent and evidently corrupt private sector leech?

Wait. No. That'd never work. Apologies for even suggesting it. Continue privatising and outsourcing everything under the sun to your Bullingdon club chums.

[jonathanb]

Re: Why are they being given chances?

Because the directly paid employees would spend all their time filling in forms, doing health and safety risk assessments, attending union meetings and co-ordinating their diversity targets rather than actually driving people between the prison and the court.

[sabroni]

@jonathanb

So just the same as Serco then, but cheaper?

[JohnMurray]

Re: Why are they being given chances?

Risk assessments = a legal requirement

Diversity targets is the police and social services, nobody else bothers, not even the gov.

Directly paid would need pensions...have you seen the liability of gov pensions ?

Trillions.

[Anonymous Coward]

Re: Why are they being given chances?

OK, we heard you out, now you are crazy

[The Axe]

Good that it was privatised.

And if the the prisoner transfer hadn't been privatised and this practise was found to be going on what is the most likely thing to have happened? Nothing. At least with a privatised system you can kick some arses. With the civil service you can't sack anyone.

That the system encouraged people to overstate the KPIs is not a fault of the privatisation per se, it's a fault of the MoJ to not oversee the activities of its outsourced contract.

[Anonymous Coward]

Not necessarily good that it was privatised.

You're right that poor contract oversight is as much the culprit as people fiddling.

The elephant in that room, though, is that the cost advantages of outsourcing are much reduced, if not eliminated, if the client-side is adequately resourced. Even were there enough adequately skilled people available to do it - and evidence suggests there aren't.

Client-side costs are often forgotten when the calculations are done, and it DOES cost more than doing it in-house - after all, in-house, the sanction available is sacking the miscreants. Outsourced, as we see here, the only real sanction available is pulling the contract. With all the serious disruption to service delivery that ensues.

As I never tire of saying - the public sector can outsource financial risk, but it can't outsource the risk of failing to deliver the service.

[Desk Jockey]

Re: Not necessarily good that it was privatised.

"As I never tire of saying - the public sector can outsource financial risk, but it can't outsource the risk of failing to deliver the service."

Not just you. The junior and middle rank civil service has been saying this for years, but no one at the top, in Parliament, the Media or even the General Public wants to bloody listen.

Even in the private sector the message is not going out very well which is why those banks suffered those massive IT failures and suddenly realised that outsourcing their tech support to India was not that good an idea after all. Only such private banks are meant to be allowed to fail, no wait...

[RichardPH]

Re: Good that it was privatised.

But at least when it's in-house there aren't teams on each side monitoring KPIS and legal teams employed to argue the transgressions. The supposed cost savings in outsourcing invariably get eroded with management and enforcement of the interface.

[Don Jefe]

Re: Good that it was privatised.

This is 100% the fault of privatization. The sole responsibility of any country's justice system is to control and manage those within the system. They outsourced their reason for existing.

Outsourcing can be really valuable for a one time project that has defined completion criteria, but when you outsource your only reason for existing it is time to reevaluate a lot of internal operations.

[Richard Jones 1]

Re: Good that it was privatised.

There is another problem in that the number of courts has been drastically reduced and the distances over which prisoners are transported are thus much greater. Unfortunately one step be-gets another.

There does appear to be a huge gap in the understanding of 'due process' especially with contract management.

There should be a simple answer, prisoner is collected from a holding point, signed over with an exchange of token for the move.

Prisoner is delivered to court and a receipt is obtained - can be electronic, paper, whatever. No receipt no pay.

Same process for the return trip.

Simply put it appears that problems are thrown over the wall for someone else to pick up, "Not me guv, its them."

Given the choice between a taxi and a company with vans I guess the company with vans won.

[James 51]

The title is too long

"an alleged disparity between Serco's PECS performance data and the "actual situation on the ground", the MoJ said."

I thought this was S.O.P. for all outsourced (public sector) contracts?

[Tom 7]

They get telly AND escorts in prison now?

I'm going to have to write to the Daily Mail about this!

[HereWeGoAgain]

Prisoner Escort - a question

Are Serco prisoner transport vehicles allowed to use bus lanes? IANAL, but I don't believe they are allowed to. Yet I see them doing this regularly.

[Nigel 11]

Re: Prisoner Escort - a question

It's a bus isn't it? One where the passengers are handcuffed to the seats (or something - never seen inside one!). But does that make it any less of a bus?

[Yet Another Commentard]

Grr

"He said there were no indications of "systemic malpractice up to board level""

It does not matter if the nice board member took you to a Good Lunch or not, the directors have responsibility for all of their employees (unless, as per Joel v Morrison they are on a frolic of their own). The odd thing you can forgive, but systematic leads to a conclusion of a fundamental failure in the control process, the responsibility of which lies with the directors. You can bet that if every prisoner was really on time and correct the Board would be responsible for it, so they are responsible for the alleged fraud too.

Don't merely hand over "profits" on some weird accounting basis, fine them significant proportions of the contract value.

£2M profit sounds light - SERCO has a 5% net profit margin, so there should be about 5% of 2.5/7 (that's how much of the contract has gone) of £285 million at the very least, so more like £5M. Of course, "net profit" includes all the overhead costs that would exist whether or not SERCO did the contract. So they should be lost. More realistic therefore is the gross profit margin of 15%, so more like £15million. I could understand a number bigger than five but less than fifteen, but two? It's not worth getting out of bed for that.

Who in Whitehall sense checks this stuff?

[Anonymous Coward]

Re: Grr

"Don't merely hand over "profits" on some weird accounting basis, fine them significant proportions of the contract value."

NO.

The individuals at the top of these companies pay themselves significant sums of money when things are allegedly going well. They justify doing so on the basis that they, as individuals, are responsible for things going well.

Presumably on that basis these very same individuals at the top are also responsible, as individuals, when things don't go right, right?

Don't fine the company, fine the people who got the bonuses.

Soon sort things out. Except it'd never happen. Don't know why not though.

[Anonymous Coward]

Re: Grr

Easy to implement- give people generous bonuses but make them wait for them. So, say, a top end manager on 200k could get a 1.4m bonus... After a 7 year contract finishes. So doubling his salary, but ONLY if quality is maintained in the longer term. Or if they need something to retain staff have the 400k available for immediate performance-related bonuses over that period with the balance paid afterwards.

[DominicT]

If any of us 'normal' people defruaded the government, we'd be in prison.

If one of the government's friendly outsourcing companies do it, they simply have to promise not to 'make a profit'. Not very harhs - I'm sure that covering costs and wages for your staff until the next contract isn't such a bad deal.

Just as public sector workers can all be TUPE'd out en-masse in privatisations, simply 'nationalise' the relevant staff and facilities in Serco and send the appropriate management to prison.

If we are going to privatise everything in this country, as this governmnet seems hell-bent on doing, companies must have some sort of incentive not to actually rip us all off, and the State has to have a way of continuing to provide the service should fraud like this be discovered.

[Anonymous Coward]

Anyone genuinely believe it's limited to Serco?

Due to the lack of government oversight in general I would expect this to be common across the board. When companies employ plenty of people to massage the KPI's and run rings round the client. The civil servants supposed to be in charge appear to be outclassed and outgunned terribly.

Thats not even counting the contracts where KPI's are regualrly attained but the targets are so low any crowd of monkeys could hit them.

AC as I have more experience than I would like to admit fudging KPI data and scorecards. Very hard to totally hide terrible results but plenty of ways of mitigating the appearance.

Personally I would love to see the government end the outsourcing obsession. But if we are keeping it then we must be more ruthless and on the ball managing the contracts. That means bringing in an expert in the area rather than someome who worked their way up the civil service ladder but has no experience in what they are overseeing. We also need to introduce far harsher penalties for fraud such as this and hopeless performance. Would love to see permanent bans on any future HMG contracts as well as criminal penalties where relevant.

[Anonymous Coward]

Running rings

I worked as a contractor for a large services company EDS - examining and quantifying risk on a major UK government project. The first task set on winning the contract was to develop a plan to game the contract (switching KPIs, 'managing' downtime and estimating response rate limits). I stopped working for them. Needless to say their government customer was not interested when I approached them to explain why the contract they had signed was not going to do what they thought it would on the tin and they needed to rethink a number of strategies thought up by bean counters with little numerical or game theoretical experience. A letter to the relevant minister was met with a meeting at which a junior minister and his civil servant 'minder' stonewalled. I saw the writing on the wall and needing a salary, desisted.

The project has not been a success and the users hate it.

[Peter Galbavy]

Someone st Serco forgot to sign the donation slip to the Conservatives again? I wonder if they'll get the message the second time. Look, it took G4S a few attempts but I am sure the donations are now done on a standing order.

[Si T]

Considering Serco are a key member of one of only two consortiums left bidding for outsourcing the MoD, it will be interesting to see how seriously the Tories really are about stopping them from winning other contracts considering they really want that to go through.

[Tom 38]

"I am deeply saddened and appalled at the getting caught misreporting of data by a small number of employees on the contract. This is a very serious matter for the customer police and for us," said Serco boss Chris HymanInmate #33de4db33f17.

FTFY

[Anonymous Coward]

Inmate #33de4db33f17.

Do prisoners have MAC addresses now? It might make them a bit easier to track. Or is that the MAC of the phone hidden where the sun doesn't shine?

[arrbee]

The financial justification for all of these outsourcing contracts has been very shaky - to the extent that they have had to include various fiddle factors to make them look even marginally cheaper than keeping the work in-house. This started with Major, ramped up with Blair, and, despite initial promises, has continued with Cameron; as I can see no real political advantage to the party involved I guess it comes down to money.

[AceRimmer]

The advantage is quite simple.

In keeping the current system going they don't have to admit they were wrong in the first place

[Anonymous Coward]

The Tories have accelerated. The biggest outsourcing deal possibly ever will be for DE&S (the entire purchasing arm of the MoD to you and me) which is currently going through. And as soon as you start to look at the people involved in it, you really start to question their motives.

[Yet Another Anonymous coward]

You don't think the private sector can do just as good a job of handing over govt money to BAe for systems that aren't delivered and don't work - as a civil servant ?

[DJV]

Criminals squared.

So, a bunch of criminals have the job of (supposedly) moving another bunch of criminals around. Good job we don't have a bunch of criminals for a government who could get up to no good.

Oh wait...

[Stuart Castle]

My own, minor, experience..

A few years ago, I worked for a local hospital trust. Part of my job was doing the accounts for the catering department (assuring involces got cleared etc).

The hospital got a daily delivery of fruit and veg (the quality of which drew a lot of complaints from the head chef in the kitchen), and paid the grocer around about £500 a day. One day, I compiled a list of what we bought from the grocer and went over to the local sainsburys (which was actually at the end of the hospital's main visitor's car park) to compare prices.

Even factoring in the expense of sending two or three people over there to do the shopping, we'd still have saved £100 a day, and got better quality fruit and veg as well.

Unfortunately, even assuming they could, the people that could have got the trust out of that rather restrictive contract, where not bothered enough to try and get the trust released. After all, it was only £100 a day. They were the sort of people who could spend that at lunch.

[Nigel 11]

Re: My own, minor, experience..

Outsourcing to the wrong organisation? Who chose this grocer? Sainsbury, Tesco, Asda all do free delivery on orders much smaller than £500!

I wonder who is paying for "those people"'s lunches?

[Colin Millar]

Grayling has determined the outcome of the investigation already

He says there are "... no indications of "systemic malpractice up to board level" " despite the investigation having only just started and the whole business model of self-certifying performance stats being a giant nod from Ministers to G4 and plainly designed to be abused. The systematic malpractice goes up to Board level alright - and then some way further.

The whole privatisation agenda these days is no longer based on value for money but capture of tax volumes - grab the tax-based income stream and then see how to little you can do in return. Ministers know this and collude with businesses by such mechanisms as self-certifying performance stats.

And now some poor minimum wage monkeys are going to get thrown to the wolves. I expect some credible insider was about to blow the whistle and they decided it was time to start the arse covering phase of the contract.

[Anonymous Coward]

Surely not

Whoops, they're at it again!

(warning: Grauniad link) http://www.theguardian.com/society/2013/jul/11/serco-gp-out-of-hours-substandard

[Anonymous Coward]

Serco not popular in the Nortern Isles

Since they took over the ferries no-one has a good word to say about them.

http://www.shetlandtimes.co.uk/2013/08/02/wishart-far-from-impressed-b-sercos-first-year-in-charge-of-north-boats

[Anonymous Coward]

Competence

From the article and comments above, one gets the impression that Serco has fingers in a very large number of government pies, and isn't doing too well in many of them.

Makes you wonder what the company's core competences are.

[Red Bren]

Re: Competence

There's no "m" in "any"

[Yet Another Anonymous coward]

Re: Competence

>Makes you wonder what the company's core competences are.

Presumably - getting it's fingers in a large number of government pies despite not doing too well in any of them?

[Anonymous Coward]

Surely the system should have been setup in that Serco would transport the prisoner to court and someone at the court should have taken the paperwork and had it time stamped of when the custody of the prisoner was transfered over to the court? You can't fake the paperwork when there is a time stamp. They could even do this electronically which makes running reports as simple as automating the delivery of it every month. It seems the entire system was bound for corruption from the start.

[JaitcH]

Memories of G4S?

High government officials said G4S wouldn't be allowed to bid on government contracts following the IOC security fiasco.

Nothings changed - G4S are still landing new contracts.