Companies that have paid hundreds of millions in fines and penalties, have defrauded Whitehall or have faced corruption investigations are among those making the most money from UK government outsourcing, the Observer can reveal.
Observer analysis of data from UK regulators has found the Strategic Suppliers, the 40 private companies that play the biggest role in running outsourced government services, have received well over £500m in financial penalties from regulators since 2010.
Only six of the 40 had not been reprimanded by regulators, with many receiving tens of millions in fines without losing their place as a Strategic Supplier.
One of the biggest fines came in 2020 after the company was found to have defrauded the Ministry of Justice by charging for the electronic monitoring of thousands of offenders who were then found to have returned to prison or even died.
Serco has been handed more than £56m in fines since 2010, including for defrauding the government, but has since won billions of pounds in government contracts as one of its top five biggest outsourcing partners, including to run the government’s much-criticised track and trace programme during the pandemic and to manage asylum seeker accommodation
KPMG has had £65m in penalties since 2010 in relation to 36 cases almost all relating to accounting fraud or other financial offences. Infamously, tt was found to have forged documents and misled regulators over audits for companies including the now-collapsed Carillion, also once one of the Strategic Supplier