Labour is already committed to unpicking the justice ministry contracts to outsource probation services but will not now be able to do so without incurring the multimillion pound bill because of "poison pill" clauses written in by Chris Grayling's department.
The Ministry of Justice say they are only following Treasury guidance by including the clause, which raises the prospect that similar clauses are being included in other politically controversial contracts across Whitehall that are to be signed before next May's general election.
Margaret Hodge, the chairman of the Commons public accounts committee, who has secured a confirmation from Ministry of Justice officials about the clauses, said that the clause is written into the contracts to run 21 new "community rehabilitation companies". She said was appalled by the discovery.
She has asked the Whitehall spending watchdog, the National Audit Office, to challenge any politically contentious contracts that are signed in the dying months before the general election: "It is not value for money. It is unacceptable and must be challenged before the event."
The disclosure comes as the two outsourcing firms at the centre of serious fraud inquiries,, G4S and Serco, confirmed they had been granted new government work during a period when the justice secretary, Chris Grayling, had told MPs that contracts would not be awarded. The confirmation has led to claims that Grayling misled parliament.
The contracts will see 70% of the work of the public probation service handed over to private and voluntary sector providers as part of Grayling's "transforming rehabilitation programme".
The announcement of the "preferred bidders" among the 80 companies and organisations bidding to run the 21 community rehabilitation companies had been expected this week but has been delayed until December. Transfer from the public sector is now expected in the new year.
Vincent Godfrey, the MoJ's director of procurement, has confirmed to Hodge that the probation contracts include a clause under which companies are paid recompense for costs and profit if it is terminated through no fault of theirs. He said there was a "staged profit repayment clause", which would cover the loss of profits for the entire life of the contract if it was terminated at its very outset.
Hodge said that this was unprecedented and contrasted them with traditional "no fault" clauses, which see 12-18 months of compensation for loss profits. She said it could amount to £300m-£400m in the case of the probation contracts.
A justice ministry spokesman said that they did not recognise the figure.
The disclosure led the shadow justice secretary, Sadiq Khan, to write to Grayling reminding him of Labour's opposition to probation privatisation: "What's more, I do not believe, in the dying months of this government, contracts should be signed for a decade that will bind in two future parliaments. If you insist on proceeding, there should be a sensible option for a change of government to walk away from the contracts without lumbering taxpayers with a penalty running into hundreds of millions of pounds."
The separate accusation that Grayling misled MPs over the ban on G4S and Serco winning new government contracts followed emails to the public accounts committee from both companies detailing their negotiations with the Ministry of Justice. These showed that they signed new contracts and extended existing ones between July 2013 and January 2014.
Grayling told the House of Commons last year that the government would not award or negotiate with G4S or Serco until they had been given a clean bill of health by auditors.
It first emerged in July 2013 that both firms were involved in overbilling for the tagging of prisoners. Since then the Serious Fraud Office and City of London police have launched inquiries into five separate government contracts with the two firms worth more than £200m. The government's auditors cleared both firms to work on government contracts in January this year as the police inquiries continued.
At a committee meeting on Wednesday to discuss outsourcing contracts, Hodge told MPs that she had received a letter from Serco showing that between July 2013 and January 2014, it had extended its existing contract of work in HMP Thameside and been given seven new MoD contracts.
G4S was given more business in an MoJ prison contract extension in August 2013, Hodge said, and three days after the suspension was lifted, a G4S contract to work with HMRC was announced. "It does appear that Chris Grayling has misled the house," she said.
Hodge told the committee: "There was one [Serco contract] in Justice which gave them more money and more business. It was the expansion of an existing contract for HMP Thameside. But it was growing their business at a time when ... they shouldn't have done so.
"You then look at the MoD, there were seven contracts awarded to Serco during that period when Chris Grayling had clearly told the house that we would not be awarding them any new contracts.
"At G4S, there was an increase in business to work HMP Parc phase II operations. Three days after the suspension was lifted, there was a major contract for HMRC facilities management.
"Now either people were doing things they shouldn't have been doing in the civil service or members of parliament were misled by what Chris Grayling said to the house."
In October, Grayling was asked by Labour's Nick Smith to explain the MoJ's position. "We will not be awarding the companies any new contracts unless or until those audits are completed to our satisfaction," Grayling replied.
Civil servants appearing before the committee reassured Hodge that parliament had not been misled and said they would provide the committee with a chronology of events that would explain Grayling's statement.
Original Article
Source: theguardian.com/
Author: Alan Travis and Rajeev Syal
No comments:
Post a Comment