UK charity calls for government ban for G4S and Serco

LONDON, May 13 (Reuters) - British outsourcing firms G4S (Copenhagen: G4S.CO - news) and Serco should be barred from bidding for government work until a fraud investigation into their failed criminal-tagging contracts is complete, a penal reform charity said on Tuesday.

The two firms were found in July to have charged for monitoring criminals who were dead, in prison or had not been tagged at all. The scandal led to a ban on new work, managerial departures, business overhauls and big hits to shares and profits at both companies.

While the issue remains the subject of an investigation by Britain's Serious Fraud Office (SFO), the government said in January Serco could resume bidding for new work, and gave G4S the all-clear in April after both made hefty repayments and overhauled their UK businesses and ethics and risk procedures.

The Howard League for Penal Reform, a British charity, criticised that move and said on Tuesday it would hand a dossier outlining failures in recent years by both firms in delivering justice contracts to police in order to assist the SFO inquiry.

The Howard League said it would also send a more comprehensive report considering failures by other private firms such as Sodexo (Frankfurt: SJ7.F - news) and GEOAmey to Britain's Public Accounts Committee, which has been critical of the role of outsourcing companies in delivering public services.

"We are confident we have in place robust and accountable contract management systems which ensure failings do not happen again," a Ministry of Justice spokesperson said.

"The private sector has an important role to play in helping deliver much needed reforms."

In a statement Serco pointed to the comprehensive changes it was making within its business in light of the tagging scandal and said: "Our programme of renewal was positively assessed by the Cabinet Office at the end of January."

G4S (LSE: GFS.L - news) declined to comment. (Reporting by Neil Maidment; Editing by Mark Heinrich)