Serco

Serco Group plc
Public limited company
Traded as LSE: SRP
Industry Government Services
Founded 1929
Headquarters Hook, Hampshire, England, United Kingdom
Key people
 Sir Roy Gardner (Chairman)
Rupert Soames (CEO)
Revenue £3,177.0 million (2015)[1]
£(3.7) million (2015)[1]
£(153.1) million (2015)[1]
Number of employees
 100,000 (2015)[2]
Website www.serco.com

Serco Group plc is a British outsourcing company based in Hook, Hampshire.[3] It operates public and private transport and traffic control, aviation, military weapons, detention centres, call centres, prisons and schools on behalf of its customers. Serco has been involved in a variety of controversies having a history of problems, failures, fatal errors and overcharging.

It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index. Serco operates in Continental Europe, the Middle East, the Asia Pacific region and North America, but the majority of its turnover comes from the UK.

History

Serco was founded in 1929 as RCA Services Limited, a United Kingdom division of the Radio Corporation of America and initially provided services to the cinema industry.[4] It changed its name to Serco in 1987 and has been a London Stock Exchange listed company since 1988.[4]

On 29 December 2008, Serco acquired SI International.[5]

In November 2014 its share price, which stood at 674p before the taxpayer scandal broke in 2013 collapsed to 218.7p, after four profit warnings. The new chief executive Rupert Soames sold off "scores of divisions". He said the company was suffering from ministers’ improved ability at driving a bargain, and claimed that “the Government has got much more adept at writing contracts and transferring risk to the private sector”.[6] On 17 November 2014, it was announced that Alastair Lyons would resign from his position as chairman of Serco.[7] Lyons referred to “operational mis-steps” for which he took “ultimate responsibility”, but said he had not been forced out.[8] Serco made a loss of £991 million in 2014, reducing to a loss of £69.4 million in 2015.[9]

Sir Roy Gardner was appointed as Non-Executive Chairman on 28 May 2015: he is also a senior adviser to Credit Suisse Group AG.[10]

UK operations

State security

Serco, as well as its rival G4S, was accused of overcharging the Ministry of Justice on its contract to tag offenders. The firm issued a profit warning for 2014 as a result of the costs of becoming embroiled in an electronic tagging scandal. Serco repaid £68.5 million to the government for its overcharging on the contract.[11] In May 2014 a Survation poll for campaign group We Own It, found that 63% of respondents thought Serco should be banned from bidding for any new public contracts after the firm was investigated for overcharging on government contracts.[12] We Own It held a protest outside the company's annual general meeting on 8 May called "Sick of Serco". The group brought sick bags and proposed a Public Service Users Bill that would provide better, more transparently run services.

Serco operates the National Border Targeting Centre for UK Visas and Immigration and provides the carrier gateway—the interface between carriers and the agency.[13]

Transport

Serco Speed Camera

Serco operates the Santander Cycles scheme[14] (for Transport for London) and the NorthLink Ferries Northern Isles lifeline ferry service in Scotland.[15] Serco also has a joint venture with Abellio, the international arm of Dutch national rail operator Nederlandse Spoorwegen, to operate passenger trains in the UK. Serco-Abellio has a 25-year concession for Merseyrail in Liverpool until 2028 and operated the Northern Rail franchise from December 2004 until March 2016.[16] Serco's Home Affairs division, run by Tom Riall, also operates speed camera systems throughout the UK and designs, writes and tests the software that controls the matrix message signs, signals, emergency roadside telephones (SOS) and traffic monitoring on England's motorway network including the National Traffic Control Centre.[17] It previously operated the Docklands Light Railway.[18]

On 31 March 2015, Serco commenced a 15-year contract to operate the Caledonian Sleeper between London and Scotland.[19]

Science

Serco managed the UK's National Physical Laboratory until 2015[20] and also provides IT Services, Industrial Support and Cryogenic Operations Support and Maintenance at CERN.[21] Serco also was part of a consortium running the National Nuclear Laboratory under contract, until October 2013.[22]

Prisons and justice

A Serco van

In Britain Serco supplies electronic tagging devices for offenders and asylum seekers.[23] It runs four prisons, a Young Offenders Institution and a Secure Training Centre.[24] It has also operated two Immigration Removal Centres since 2007.[25][26] Serco is also responsible for the contracted-out court escort services in the south-east area (formerly a role undertaken by HM Prison Service).[27]

In September 2013, Serco was accused of extensive sexual abuse coverups of immigrants at Yarl's Wood Immigration Removal Centre prison in Bedfordshire, England [28] In August 2014, Serco was criticised for using immigrant detainees as cheap labour, with some being paid as little as £1 per hour.[29] The decision to give the firm a new £70 million eight-year contract to run Yarl's Wood has been criticised. Natasha Walter, of Women for Refugee Women, said "Serco is clearly unfit to manage a centre where vulnerable women are held and it is unacceptable the government continues to entrust Serco with the safety of women who are survivors of sexual violence."[30]

Defence

Serco held defence contracts in 2004, including the UK Government's contract for the maintenance of the Ballistic Missile Early Warning System at RAF Fylingdales;[31] contracts are also held for the operation and maintenance of RAF Brize Norton,[32] RAF Halton[33] and RAF Northolt[33] in the UK and RAF Ascension Island in the mid-Atlantic.[33] Serco also provides support services to garrisons in Australia.[34] Serco also manages many aspects of operations at the Defence College of Management and Technology in Shrivenham.[35] Serco is one of three partners in the consortium which manages the Atomic Weapons Establishment.[36] Serco also has a 15-year contract worth £400 million to provide facilities management services to the Defence Science and Technology Laboratory (Dstl).[37]

Serco Marine Services is responsible for fleet support at the three main UK naval bases, HMNB Portsmouth, HMNB Devonport and HMNB Clyde.[38]

Aviation

Serco provides air traffic control services at international airports in the United Arab Emirates[39] and at some smaller airports in the United States and Canada.[40][41] Starting in 2004 Serco had a £5m a year contract from the US government to manage airports in Iraq for 18 months.[42] Serco also operate Scatsta Airport on Shetland.[43] In June 2010 Serco signed a £4 million contract to operate all air traffic control services for Coventry Airport.[44]

Health

Serco provide facilities management services at the Norfolk and Norwich University Hospital,[45] Leicester Royal Infirmary,[46] Wishaw General Hospital[47] and at Plymouth's Derriford Hospital.[48]

The company had the contract for out-of-hours GP services in Cornwall from which it withdrew in December 2013 after the company left the county short of doctors. The company also said it would stop running Braintree hospital in Essex as it pulled out of managing GP services and large hospitals.[49]

In health services, Serco's difficulties include the poor handling of pathology labs and fatal errors in patient records. At St Thomas' Hospital, the increase in the number of clinical incidents arising from Serco non-clinical management has resulted in patients receiving incorrect and infected blood, as well as patients suffering kidney damage due to Serco providing incorrect data used for medical calculations.[50] A Serco employee later revealed that the company had falsified 252 reports to the National Health Service regarding Serco health services in Cornwall.[51]

It emerged in November 2013, Serco, which won a contract for Suffolk Community Healthcare in 2012, had 72 vacancies after earlier cutting 137 posts. Problems identified by Ipswich and East Suffolk Clinical Commissioning Group include “staff capacity, skill mix, workload, succession planning and morale, training, communication, mobile working, care co-ordination centre processes, incidents and near miss incidents”.[52]

In April 2014 Serco revealed that it would lose almost £18 million on three of its NHS contracts. The firm has made provisions for losses in its Braintree and Cornwall contracts, which were cancelled early. It has also made provisions for losses in its contract for services in Suffolk. The company claims it will take longer to deliver the operational efficiencies it hoped for, despite saying in May 2013 that it expected to make a profit on the three-year, £140 million contract for community services.[53] It said that staff had not recorded activity accurately on the Electronic health record and that activity had increased significantly during the course of the contract.[54]

In August 2014 it was reported that the company had decided to withdraw from the clinical health services market in the UK after a review of the cost of delivering “improved service levels” and meeting the performance requirements of several existing contracts.[55]

Education

Serco held a ten-year contract with Bradford City Council between 2001 and 2011 to manage and operate the local education authority,[56] providing education support services to the City's schools. This period was marked with "real problems" according to senior council officials and was taken back in house by the local authority after this period.[57] Serco similarly manages and operates Walsall[58] and Stoke-on-Trent local education authorities.[59] Serco is one of Ofsted's three Regional Inspection Service Providers, responsible for school inspections in the English Midlands.[60]

Leisure

Serco operates a number of leisure centres across the UK including Wet N Wild and the Manchester Aquatics Centre, the aquatic venue for the 2002 Commonwealth Games in Manchester.[61]

Information technology

Serco also administers a number of publicly funded websites in the UK, including the Business Link website.[62] It presently runs the IT Infrastructure for the London Borough of Southwark winning the five-year tender in 2007.[63]

Waste

Serco operates waste collection services for local councils.[64]

Outside the UK

Drivers' licensing

Serco, through a purpose-made division Serco DES, holds a ten-year, $114 million contract with the Province of Ontario to operate the province's DriveTest driver examination centres. These tests include vision, road, and knowledge tests for all persons seeking to become a licensed automobile driver in the province.[40]

Health in the United States

In July 2013 Serco was awarded a $1.25 billion contract to manage the implementation of the Patient Protection and Affordable Care Act.[65]

Prisons and justice

Serco runs partly privatised Hünfeld Prison in Hesse, Germany.[66]

In Australia, Serco runs Acacia Prison in Western Australia[67] and Borallon Correctional Facility in Queensland[68] as well as the national contract for immigration detention centres, including Christmas Island and the Villawood detention centre in Sydney.[69][70]

The Union of Christmas Island Workers highlighted the systemic failure by Serco to manage the Christmas Island Immigration Reception and Processing Centre. The centre detains a large number of refugees including 1,000 children.[71] Under Serco, there has been an increase of deaths in custody, self-harm, and of Serco staff beating prisoners. As well, there has been a deterioration of facilities leading to the decline of the physical and the mental health of detainees and of staff. Ombudsman Allan Asher said on the Australian radio show AM, "In the first week of June when I visited Christmas Island, more than 30 incidents of self-harm by detainees held there were reported".[71] Serco, in a staged memo leaked to The Australian, blamed the detainees for "creating a culture of self-harm", in order to use it as a "bargaining tool".[71] The former manager of the Serco run detention centre stated the centre was grossly understaffed whereby it was "typically 15 staff members short every day".[71]

In Auckland, New Zealand, Serco operated the Mount Eden Prison remand prison[72] and in March 2012 was awarded the contract to build and operate a 960-bed prison at Wiri.[73] Serco was heavily criticized for the existence of 'fight clubs' within Mt Eden prison that were not investigated until after they became public knowledge on July 16, 2015 when footage emerged online and was reported by TVNZ.[74] However, on 24 July 2015, Serco was revoked the right of running the prison and Mt Eden prison was given back to the New Zealand Department of Corrections to run.[75] Serco was ordered to pay $8 million to the New Zealand government as a result of problems at Mt Eden Prison while it was under Serco's management.[76]

Serco has a contract with the City of Chicago, Illinois, to enforce parking meter regulations.[77]

Transport

From 1997, Serco ran Great Southern Rail in Australia.[78][79] In March 2015, the business was sold to Allegro Funds.[80][81]

Serco operates the Dubai Metro in Dubai, the United Arab Emirates.[82] Serco formerly operated the Copenhagen Metro in Copenhagen, Denmark, with Ansaldo STS, until it sold its share with effect on 1 January 2008.[83]

In Sydney, Serco has operated the Transport Info service since 1 July 2010.[84]

It secured an eight-year contract in 2013 with its Swedish joint venture partner Strömma Tourism & Maritime to operate four Djurgården ferries on behalf of Stockholm County Council and public ferry company Waxholms Ångfartygs.[85]

References

  1. 1 2 3 "Annual Report 2015" (PDF). Retrieved 15 April 2016.
  2. ↑ Serco Group plc. "Serco: At a glance". Retrieved 15 March 2015.
  3. ↑ "Where We Operate". Retrieved 10 May 2013.
  4. 1 2 "History". Serco. 14 May 2010. Retrieved 18 July 2010.
  5. ↑ Hubler, David (30 December 2008). "Serco wraps up SI International buy". Washingtontechnology.com. Retrieved 18 July 2010.
  6. ↑ "Serco shares dive after another profit alert". Evening Standard. 10 November 2014. Retrieved 10 November 2014.
  7. ↑ "BBC News - Serco chairman to leave troubled government contractor". BBC News. Retrieved 17 November 2014.
  8. ↑ "Serco chairman Alastair Lyons steps down from scandal-hit outsourcer". The Independent. Retrieved 17 November 2014.
  9. ↑ Kat Hall (25 February 2016). "Serco stems its gigantic losses, shrinks 2015's to a mere £70m". The Register. Retrieved 26 February 2016.
  10. ↑ "Serco appoints City veteran Sir Roy Gardner as chairman". FT. 27 May 2015. Retrieved 17 April 2016.
  11. ↑ "Sick of Serco: Meet the Protesters Outside the Outsourcing Giant's London AGM". International Business Times. 8 May 2014. Retrieved 8 May 2014.
  12. ↑ "Bucking the trend: Poll shows huge opposition to privately run public services". Politics.co.uk. 8 May 2014. Retrieved 8 May 2014.
  13. ↑ Antony Savvas. "Government snared in fight over scrapped £742m e-Borders contract". Computerworld UK. Retrieved 17 November 2014.
  14. ↑ Hill, Dave (12 August 2009). "Boris Johnson bike hire scheme: and the winner is". The Guardian. UK. Retrieved 18 July 2010.
  15. ↑ "Serco confirmed as Northern Isles ferry operator". UK: BBC News. 29 May 2012. Retrieved 24 July 2012.
  16. ↑ "Department for Transport: Serco NedRailways announced as Preferred Bidder". Retrieved 18 July 2010.
  17. ↑ Shah, Saeed (21 February 2001). "Serco to run Britain's first traffic control unit". The Independent. UK. Retrieved 18 July 2010.
  18. ↑ "Transport for London: Franchise". Tfl.gov.uk. Retrieved 18 July 2010.
  19. ↑ Serco wins franchise for Caledonian sleeper train service BBC News 28 May 2014
  20. ↑ "What is NPL?". NPL.
  21. ↑ Serco Group plc. "Contract News Update". serco.com. Retrieved 15 March 2015.
  22. ↑ "New management team takes over at National Nuclear Lab". Retrieved 17 November 2014.
  23. ↑ Home Office: Electronic tagging
  24. ↑ Paterson, Craig. "Virtual Private Prisons". Corporate Watch. Retrieved 18 July 2010.
  25. ↑ "Home Office: Yarls Wood". Ukba.homeoffice.gov.uk. Retrieved 18 July 2010.
  26. ↑ "Home Office: Colnbrook". Ukba.homeoffice.gov.uk. Retrieved 18 July 2010.
  27. ↑ "Wackenhut Corrections wins prisoner escort contract". Prnewswire.co.uk. Retrieved 18 July 2010.
  28. ↑ Detainees at Yarls Wood Immigration Centre facing sexual abuse, The Observer, Mark Townsend, 14 September 2013, Retrieved 15 September 2013.
  29. ↑ Rawlinson, Kevin (22 August 2014). "Private firms 'are using detained immigrants as cheap labour'". theguardian.com. Retrieved 22 August 2014.
  30. ↑ "Yarl's Wood £70m Serco contract renewal 'unacceptable'". BBC News. 24 November 2014. Retrieved 25 November 2014.
  31. ↑ Terry Macalister (2 September 2004). "PFI deals help Serco to record order book of £10bn". The Guardian. UK. Retrieved 18 July 2010.
  32. ↑ "Airport of Embarkation". Raf.mod.uk. 18 March 2010. Retrieved 18 July 2010.
  33. 1 2 3 "Serco Business Review Page 20" (PDF). Retrieved 18 July 2010.
  34. ↑ "Serco Sodexho and the real story about work choices". Retrieved 17 November 2014.
  35. ↑ "Defence Academy". Da.mod.uk. Retrieved 18 July 2010.
  36. ↑ Harrison, Michael (21 June 2001). "BNFL consortium seeks 15-year extension to Aldermaston contract". The Independent. UK. Retrieved 18 July 2010.
  37. ↑ "Dstl Inspire Contract release". Serco. Retrieved 2 November 2010.
  38. ↑ "Marine Services". Serco. Retrieved 20 February 2009.
  39. ↑ Serco Group plc. "Serco – Middle East". Retrieved 17 November 2014.
  40. 1 2 Serco Group plc. "Serco – North America". Retrieved 17 November 2014.
  41. ↑ Goose Bay Airport – Control Tower services
  42. ↑ Terry Macalister (3 March 2004). "Serco wins Iraqi Air Traffic Deal". The Guardian. UK. Retrieved 18 July 2010.
  43. ↑ "Scatsta Airport control tower not fit for purpose". Shetland Times. 10 June 2011. Retrieved 1 July 2011.
  44. ↑ Coventry Airport Gears Up For Business Coventry Airport, 15 June 2010
  45. ↑ "Private Finance Initiative – Norfolk and Norwich University Hospital" (PDF). Retrieved 18 July 2010.
  46. ↑ "Leicester Royal Infirmary: Hospital Cleaning". Uhl-tr.nhs.uk. Retrieved 18 July 2010.
  47. ↑ Krissy Storrar (25 February 2006). "So you thought it was Tony and Gordon in charge?". Daily Mirror. Retrieved 18 July 2010.
  48. ↑ "New company vows to clean up Derriford Hospital". 3 June 2009. Retrieved 11 November 2011.
  49. ↑ "Serco to lose out-of-hours GP services and hospital management contracts". The Guardian. 13 December 2013. Retrieved 22 December 2013.
  50. ↑ Ramesh, Randeep (30 September 2012). "NHS lab failings followed Serco-led takeover". The Guardian. London. Retrieved 2 January 2013.
  51. ↑ Lawrence, Felicity (20 September 2012). "Serco gave NHS false data about its GP service 252 times". The Guardian. London. Retrieved 2 January 2013.
  52. ↑ Serco seeks NHS help to fill vacancies, Health Service Journal, 20 November 2013 , Retrieved 22 November 2013.
  53. ↑ "Serco to make £17.6m losses on NHS contracts". Health Investor. 10 April 2014. Retrieved 19 April 2014.
  54. ↑ "Serco: Suffolk contract was 'not long enough' for change". Health Service Journal. 28 September 2015. Retrieved 8 November 2015.
  55. ↑ "Serco to withdraw from UK clinical services market". Local Government Chronicle. 18 August 2014. Retrieved 20 August 2014.
  56. ↑ Catcheside, Kim (10 November 2003). "Bradford: Concerns about education privatisation". BBC News. Retrieved 18 July 2010.
  57. ↑ "Bradford Council's £100,000 tribunal pay-outs". Bradford Telegraph and Argus. Retrieved 17 November 2014.
  58. ↑ "Chris Hyman: Can Serco take over the World?". The Independent. UK. 2 September 2007. Retrieved 18 July 2010.
  59. ↑ Best school in town and still they want to close it Ed Caesar The Sunday Times 11 November 2007
  60. ↑ "New inspection contracts signed" (Press release). Ofsted. 25 March 2009.
  61. ↑ "Serco picks agency to help it beef up marketing". Marketing Week. 9 October 2008. Retrieved 18 July 2010.
  62. ↑ "Enlightenlive". Enlightenlive. Retrieved 18 July 2010.
  63. ↑ "Southwark voluntary and community groups to receive PCs from serco". Findarticles.com. 2007. Retrieved 18 July 2010.
  64. ↑ "Breckland contractors" (PDF). Breckland District Council. 7 September 2012.
  65. ↑ "Obama Administration Defends Serco, Firm With $1.2 Billion Obamacare Contract, Amid U.K. Probe". Huffington Post. 16 July 2013. Retrieved 12 December 2013.
  66. ↑ "Prison Privatisation". Strafvollzugsarchiv.de. Retrieved 18 July 2010.
  67. ↑ "Department of Corrective Services: Acacia Prison Contract". Correctiveservices.wa.gov.au. Retrieved 22 September 2010.
  68. ↑ "Government of Australia: Criminal Justice System". Aic.gov.au. 30 June 2009. Retrieved 18 July 2010.
  69. ↑ Private contractor Serco to run detention centres Crikey, 1 July 2009
  70. ↑ Companies Use Immigration Crackdown to Turn a Profit The New York Times, 28 September 2011
  71. 1 2 3 4 O'Keeffe, Patrick. "Nightmare on Christmas Island: Serco's Australian Detention Center". CorpWatch. Retrieved 2 January 2013.
  72. ↑ "Serco says Mt Eden prison contract worth $300M". NZ News UK. 1 February 2011. Retrieved 26 December 2011.
  73. ↑ New private prison at Wiri given green light, The New Zealand Herald, 8 March 2012
  74. ↑ "Exclusive: Secret gag fight club at Mt Eden Prison revealed". Luke Appleby/ONE News. 16 July 2015. Retrieved 29 August 2015.
  75. ↑ Serco admits 'fight club' reports came months ago, The New Zealand Herald, 20 July 2015
  76. ↑ "Serco to pay $8m to Corrections". Radio New Zealand. 4 April 2016. Retrieved 29 April 2016.
  77. ↑ "Serco Inc. Secures Two Contract Renewals from the City of Chicago". Retrieved 23 February 2012.
  78. ↑ "Australia's Great Train Journeys". Archived from the original on 11 September 2009. Retrieved 17 November 2014.
  79. ↑ Serco. "The Ghan – Australia on line". Retrieved 17 November 2014.
  80. ↑ Allegro Funds buys Great Southern Rail from Serco Sydney Morning Herald 30 March 2015
  81. ↑ Great Southern Rail to be bought by Allegro in high-end tourism push ABC News 30 March 2015
  82. ↑ Serco preferred bidder for Dubai metro operations contract, Railway Gazette International 2007-06-19. Retrieved 15 March 2008. Archived 9 August 2011 at the Wayback Machine.
  83. ↑ Milanese run København Metro, Railway Gazette International 2008-01-08. Retrieved 15 March 2008. Archived 16 June 2011 at the Wayback Machine.
  84. ↑ Integrated Transport and Information Services Serco Asia Pacific
  85. ↑ "Serco:Strömma manage ferries". Cruise and Ferry. 17 April 2014. Retrieved 19 April 2014.
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