In recent months it has emerged that two private security companies, G4S and Serco, who provide electronic tagging schemes, have been overcharging the government for their services. Both companies were awarded government contracts in 2005 and since that date are thought to have overcharged the government by tens of millions of pounds. In so doing they charged for tagging offenders who had died, were back in prison, had had their tags removed, or had left the country. A National Audit Office report outlines individual cases of overcharging by both companies.
Approximately 20,000 people are put on electronic tags each year in England and Wales, with the total cost since 2005 reaching £722 million. It has also emerged that on average 15,000 people are subject to electronic tagging at any one time, whilst G4S and Serco were charging for 18,000 meaning that one in six was a false charge.
The controversy has led to Serco being referred to the Serious Fraud Office to investigate whether criminal charges should be brought against them, while G4S are also being investigated by criminal lawyers.
G4S have subsequently apologised at a Public Accounts Committee hearing, and offered the government a £24.1 million credit note to cover sums wrongly billed which has been rejected by the Ministry of Justice, whist Serco have also offered an apology.
The debate as to whether the operation of criminal justice should be contracted out to private companies is a complex one. An argument in favour, the increased efficiency of the market is rather made a mockery of given these events; although an individual case of mismanagement is insufficient to warrant the dismissal of the argument across the board.
There is also a theoretical argument that if the state hands out the punishment therefore the state should carry out the punishment, which is a prelude to wider concerns regarding legitimacy and accountability. A question which I do not propose to address within the confines of this piece is whether one holds these companies’ right to inflict punishment as legitimate jurisprudentially. However in practice it is arguable that they are legitimised by the granting of a contract by government to conduct the work. Likewise they are accountable to the government and to the law as we are seeing through their referral to the Serious Fraud Office and the Public Accounts Committee.
The most compelling argument I have come across in the debate as to whether private actors should participate in the delivery of punishment, is that to do so enables the commercialisation of punishment. A private company’s raison d’être is to make a profit from its endeavours. In whatever way this is achieved it gives these companies a vested interest in increasing the numbers of those punished to thus expand its client base and increase profits.
The tagging scandal provides a clear example of the desire for profit interfering with the proper administration of justice. Whether the actions of G4S and Serco were the result of legitimate management mistakes or whether the actions were indeed fraudulent, both companies were profiting from the work. Arguably they were not carrying out the contracts with rehabilitation, public protection, or any other justification for punishment at the forefront of their work, instead it was conducted for profit.
Herein lies the difference between state and privately run schemes, it should be in the interests of the state to reduce offending, whereas the vested interest of G4S and Serco is to increase the number of those subjected to the criminal justice system and subsequently punished. I appreciate that their roles in the tagging process were restricted to monitoring, but I am making a wider point about the participation of private companies in the administration of justice, that therein exists an irreconcilable conflict of interests between those of the state and the private company.
The reliance that government now has on major security firms to deliver the process of justice is becoming more apparent. Serco are also being investigated over their prison van contracts, with allegations that they manipulated figures to show that more prisoners were arriving at court on time than there actually were. An example of how the threat of losing a contract or not being awarded the next has led, not to efficiency, but to corners being cut, and allegedly fraudulent behaviour.
There were plans in place for three prisons in South Yorkshire to be transferred to the private sector, however with G4S and Serco effectively barred from competing for further government contracts until the inquiries into their behaviour have ended, and with Serco placed as the preferred bidder, it has been decided that these prisons will now continue to be operated by the state.
The decision to end the tendering process arguably indicates that G4S and Serco were the only companies who had a realistic chance of winning the contract, and as such demonstrates that the market is currently ineffective in providing the competition that often underlines the privatisation argument. Rather we are seeing an over-reliance on two major companies whose influence can only grow if their respective expansion is allowed to continue through all aspects of the criminal justice system.