Can Winston Churchill’s grandson save Serco? And is it worth saving? | Sam Knight | Business | The Guardian

Can Winston Churchill’s grandson save Serco? And is it worth saving? | Sam Knight | Business | The Guardian:



"Serco used to be the biggest company you had never heard of. For three decades it grew in the borderlands between the state and society, the government and us. Its name stands for “service company” and Serco, which combined great ambition with a desire to be unseen, wanted to be everywhere and nowhere at the same time. It was as much a formula as a company: a way to implement outsourced public services on behalf of governments, but with the elan of a restless entrepreneur. It didn’t matter what the service was, where it had to happen, or to whom it was delivered. Serco started out operating radars in Yorkshire and traffic lights in London, but it came to work with schoolchildren and doctors, commuters and prisoners, pilots and refugees. It was designed to be limitless, and to grow for ever. At its peak, Serco had a workforce of 125,000, contracts on four continents, and revenues of £5bn. But in 2013, the formula faltered. Everybody heard about Serco, and the roof fell in.



The trouble started in the spring. A young civil servant, a fast-streamer in the Ministry of Justice, noticed strange numbers in the documents submitted by Serco and G4S (another large outsourcing company) as the firms prepared to renew two electronic tagging contracts that they held with the British government. Since 2005, the two companies had earned around £700m from monitoring thousands of criminals, suspects and recently released convicts via tracking devices attached to their ankles – a practice introduced by the Home Office to reduce prison costs in 1999. But according to the junior civil servant, whose findings were initially dismissed, they were overcharging the state.



The paperwork that embodies government outsourcing, the physical contracts themselves, tells you a lot about how vexatious the whole business is. Capturing exactly what the state wants done on its behalf – the running of a railway system, the rehabilitation of prisoners – can produce dizzying piles of paper for even mundane tasks. The government chivvies its contractors to do a thousand things correctly. Private companies seek to minimise their risks, and ensure a quiet profit at the end of the day. Everyone covers their arse furiously. The documents that emerge are hundreds of pages long, dense with KPIs (key performance indicators) and SLAs (service level agreements) and kept secret from the customers – us, the public – whom they are supposed to benefit. Once they are signed, they are rarely looked at again."



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