Serco

Serco is a giant outsourcing FTSE 100 company operating in the UK, described as ""probably the biggest company you've never heard of."

Areas it operates in include health, defence, nuclear power, transport, prisons, education, aviation and leisure.

Healthcare

Serco health employs over 300 doctors and nurses in primary care and community health services, including out of hours care. Serco also provides facilities management in three NHS hospitals and prison health care.

It was beaten by Circle in a 2010 bid to be the first private healthcare company to run an NHS hospital.

In May 2012 a Guardian investigation revealed that Serco, which is poised to win much of the new wave of NHS outsourcing contracts, was under investigation by the health regulator, the Care Quality Commission. It had allegedly provided an "unsafe" out-of-hours GP service, and there were claims that it had manipulated results where it failed to meet targets.

Nuclear

This article is part of the Nuclear Spin project of Spinwatch.

Serco describes itself as 'one of the world's most experienced companies in nuclear safety, technology and management'. Its nuclear Technical Consulting Services (TCS) division supports the operation of over 20 nuclear reactors, and 'serves as the lead nuclear safety advisor to Westinghouse, designer of the AP1000 nuclear reactor currently under assessment for the UK's new civil nuclear programme'.

It also gives 'independent advice to the Royal Navy on the safety of their nuclear submarines for over 45 years, providing safety documentation, independent peer review, risk management, human factors and occupational safety support'.

In May 2012 Serco announced it was in talks with AMEC, a UK consultancy, engineering and project management services company about selling TCS.

AMEC completed the acquisition in July for GBP 137 million and integrated TCS into its own business during 2012.

Atomic Weapons Establishment

Serco manages the UK Atomic Weapons Establishment (AWE) as part of a consortium with Lockheed Martin and Jacobs. According to Serco, 'AWE is one of the most advanced research, design and production facilities in the world, developing the sophisticated materials, quantum physics and computer modelling vital to the safe and effective maintenance of the UK's nuclear deterrent. AWE experts also play a leading role in nuclear non-proliferation and international nuclear security'.

National Nuclear Laboratory

Serco partners with University of Manchester and Battelle to manage the National Nuclear Laboratory (NNL), 'the leading nuclear technology services provider in the UK. NNL has expertise across the full range of nuclear technology, including waste management, nuclear safety and non-proliferation, materials and corrosion and plant inspection.

External lobbyists

• Bellenden - lists 'Serco Defence, Science and Nuclear' as a client on the UK Public Affairs Council and APPC registers from 2010-2012.

Controversy

Government's cost-savings

PR Week reported in November 2010:

"Outsourcing giant Serco is on the hunt for fresh public affairs support as it seeks to restore its reputation in Westminster following a barrage of negative headlines. Serco... has been attacked for the manner in which it conducts negotiations with suppliers. Last week, the company was forced to apologise for demanding cash rebates from its biggest suppliers in an attempt to help it deliver the Government's cost savings. According to reports, Serco's stance angered Cabinet Office minister Francis Maude because the Government had agreed with Serco that the cuts would come from its own profit margins, rather than those of suppliers and sub-contractors.

Electronic tagging contract

In June 2015 it was announced both G4S and Serco are under investigation by the Serious Fraud Office (SFO) for a charge of overcharging 'the government on contracts to deliver electronic tagging of convicted offenders'. The original contracts were won in 2005 and worth £700 million, but in 2013, when the contracts were due for renewal, the Ministry of Justice (MoJ) asked for supporting documentation from bidders. Anomalies were found in the data and the government called in PricewaterhouseCoopers for a forensic audit, leading to both firms pulling out and the SFO being brought in.

Both firms agreed to repay the taxpayer, with Serco paying £68.5 million and G4S paying £109 million, whilst, the then justice secretary, Chris Grayling announced that the contracts would be taken over by another outsourcing firm, Capita, on an interim basis using the G4S and Serco equipment. Technology firm Buddi were supposed to take over the contract, but were dropped in March 2014, with the view of Steatite Limited taking over in December 2014.

Data from the Centre for Crime and Justice Studies shows that, between March 2014 and February 2015, the mishandling of the contracts has lead to the MoJ continuing to pay G4S and Serco for the electronic tags, to the tune of £8.7 million and £4.5 million respectively. When the contracts were cancelled Grayling, 'promised "a fresh start for electronic monitoring"', Matt Ford, who undertook the work, said 'The amount of public money that has continued to be paid to these two companies for services that they have found to be managing at best incompetently, and at worst fraudulently, raises yet more serious questions about the nature of markets in public services and what happens when they go wrong.'

On the topic, the MoJ have said:

'G4S and Serco no longer deliver electronic monitoring services. We have always been clear Capita would continue to use the G4S and Serco equipment until new tags were developed.'

Lobbying

• Serco employs Weber Shandwick for lobbying services. The account is led by Joe Phelan at Weber. Serco previously employed lobbying firm Fleishman-Hillard for a 'specific lobbying issue' until 2010.

• Serco employed Fishburn Hedges until February 2014

• Four Communications also list Serco as a client as of November 2011 on the UK Public Affairs Council register.

• Serco previously enlisted Weber Shandwick Square Mile for its financial communications work from 2000-2005, though its relationship was on an ad hoc basis according to PR Week until the arrival of Serco director of corporate communications Dominic Cheetham from British Gas in 2004.

People

• Christopher Hyman, chief executive
• Stephanie Elsy, UK director of government relations.
• Lisa Lipshaw, government relations manager
• Charles Carr, communications director, Defence, Science and Nuclear, since 2011, based in Bath. Previously was director of communications, Mortgages at Lloyds Banking Group and has worked at Celerant Consulting and BAE Systems

Revolving Door

• Lord Filkin, former minister at the Home Office, the Department for Education & Skills and the Department for Constitutional Affairs, and a government whip in the House of Lords, was appointed non-executive director in 2006.

Legal firms used

• Linklaters (principal legal adviser) (corporate); Ashurst; DLA Piper LLP; Hogan Lovells; Kemp Little LLP; Nabarro LLP; Pinsent Masons; White & Case LLP

Contacts

Website:http://www.serco.com