The Serious Fraud Squad is to investigate claims security firm G4S overcharged the government by ‘tens of millions of pounds’ for tagging criminals in England and Wales.

Justice secretary Chris Grayling called in detectives after an initial audit exposed significant billing discrepancies from the security giant and its rival Serco.

G4S has refused to take part in an additional audit to rule out the possibility of dishonesty, while Serco has agreed.

Auditors found the bills included tags for people who were not being monitored and people living abroad and a small number of case where the offender was known to have died.

Mr Grayling said it was ‘a wholly indefensible and unacceptable state of affairs’.

‘The House will share my astonishment that two of the government’s biggest suppliers would seek to charge in this way,’ he said.

‘They will also be surprised and disappointed to learn that staff in the Ministry of Justice were aware of a potential problem and yet did not take adequate steps to address it.’

He added: ‘The billing practices in question were clearly unacceptable and the government will take all necessary steps to secure a refund for the taxpayer.’

The audit revealed that the alleged overcharging began at least as far back as the start of the current electronic monitoring contracts in 2005.

G4S group chief executive, Ashley Almanza, said: ‘We are determined to deal with these issues in a prompt and appropriate manner.’

A Serco executive added: ‘We are taking this extremely seriously and will continue to work closely with our customer to resolve their concerns in this matter.’

Labour’s shadow justice secretary Sadiq Khan MP said the revelations are ‘truly shocking’.

He said: ‘There can be no cosy relationships with either company if we are to truly get to the bottom of these very serious allegations.’

Electronic tagging is used as a method of monitoring offenders in the community and can be used to make sure criminals stick to court-imposed curfews.

source: Metro Uk