Focus on Serco

Oct. 19, 2017, 6 a.m. by HelenMcNally

Spend Network

Between 2014-2016 the UK public sector published a total spend of £953.9m with Serco, the outsourcing giant. However, there was a year on year spend increase of only 0.9%, below the rate of inflation, echoing the problems Serco has had in the public sector.

In 2013, Serco was in trouble, hit by multiple scandals involving public sector contracts in electronic tagging,¹ prisoner transport,² and out-of hours healthcare support.³ Serco was investigated for fraud and banned from bidding on government contracts for six months.⁴ With a quarter of its global revenues coming from the UK government, this hit Serco hard. Its chief executive quit and share price plummeted by £500m.⁵

Since then, Serco has made structural changes and has begun to win new contracts, including an IT-enabled services deal with St Bart’s NHS Trust worth £600m over 10 years, a renewal of a shared healthcare services contract for Anglia Support Partnership, and a digital support services contract for Public Health England.⁶

From 2014-2016, Serco’s top ten public sector buyers were:

Serco contracts fall into three main categories:

In the first half of 2017, its order intake reached £2.4bn,⁷ although overall revenues remain flat. UK local government revenues fell by 25% and central government revenues, which accounted for 86.2% of overall spend from 2014 to 2016, fell by 9% in FY 2016.⁸