Global security firm G4S has today announced that it is to pay £108.9 million to the Ministry of Justice (MoJ) as final settlement in respect of claims arising in relation to billing ‘anomolies’ on its Electronic Monitoring (EM) services contract, which was provided by G4S Care & Justice Services (UK) Ltd in England and Wales between 2005 and 2013.
This agreement, which also concludes outstanding matters relating to two facilities management contracts, provides for a refund to the MoJ of £96.4 million (excluding VAT) and a reimbursement of costs totalling £12.5 million. In addition to the settlement amount, G4S incurred external investigation and advisory costs of £5 million.
The total settlement amount is £108.9 million (excluding VAT) and is expected to comprise a cash payment of £75.9 million and credits for services previously provided of £33 million.
On the government’s request, G4S has been working though a programme of corporate renewal, which the firm says forms part of the group-wide restructuring and transformation plans, and is not anticipated to give rise to significant additional costs.
Ashley Almanza, the G4S group’s new Chief Executive, said:
“The conclusion of the Cabinet Office and MoJ reviews and the agreement of a settlement with the MoJ are important milestones for the Group.
“The way in which the EM contract was billed was not consistent with the contract or the group’s values and we have apologised to the MoJ and the Government. We have repaid all amounts over-billed and have implemented significant changes to strengthen contract management and controls and to ensure our business is always conducted in a manner which is consistent with our group values.
“We believe that the conclusion of this matter, together with the actions we are developing on corporate renewal, will enable us to maintain our position as a strategic supplier to Government.”
In December last year, the Justice Secretary Chris Grayling also agreed a £68.3 million settlement with international facilities and support services firm Serco to repay for the overcharging found in the same audit of Ministry of Justice prisoner tagging contracts.