Minister for the Cabinet Office Francis Maude has released a Written Ministerial Statement regarding Serco’s corporate renewal plans, noting that the company has “engaged constructively with the Government following the emergence of material concerns relating to their contracts with the Ministry of Justice”. He also confirmed that the company would be able to bid for public sector work, stating that Serco had “accepted this plan represents the right direction of travel to meet our expectations as a customer”.
Maude goes further to state his belief that Serco has now developed a “thorough plan” for corporate renewal, following scrutiny by Government officials and a review from Grant Thornton, and the Government are “reassured that Serco is committed to act expeditiously on any new information emerging from ongoing investigations”. This does not, however, affect any ongoing investigations by the Serious Fraud Office.
Meanwhile, The Financial Times (£) has reported that hundreds of millions of pounds was wiped off Serco’s market value following the decisions. Serco cited factors such as the cost of the corporate renewal plan (up to £35 million), withdrawal of the electronic monitoring contract and the scaling back of its largest held contract, to managed onshore detention centres in Australia as more centres are moved offshore, as reasons for this.