Serco

Serco began life in 1929 when Radio Corporation of America formed a UK subsidiary, RCA Services Limited, to support the country's growing cinema industry. Following a management buyout in 1987, RCA Services Limited was renamed Serco Limited. In 1988, the company achieved a full listing on the London Stock Exchange as Serco Group plc. (1)

Serco is one of the world’s largest outsourcing companies, operating in numerous sectors, including defence, education, local government, facilities management, health, leisure and transportation. In fact there are very few areas of business in which Serco does not operate. The business is global. In health in the UK Serco operates in the areas of out-of-hours, custodial health services, community care, facilities management, pathology services, occupational health, and forensic medical services. (1)

Serco’s major business is with public sector organisations worldwide; in 2012 this represented 90% of its business. The company has followed a policy of expansion into every area of the public sector worldwide.The UK provides around 60% of its business.  The company’s business in continental Europe began with IT support contracts in Italy, Belgium and the Netherlands, and in the Middle East contracts revolve around the company’s aeronautical, transport and airport technical services expertise. In the Asia pacific region, Serco has operations in Australia and New Zealand, a presence in Hong Kong and in India. Serco entered the North American market in 1993, and is now a leading provider of services to federal government. (1)

In October 2013, following a scandal concerning Serco's UK government contracts for tagging and escortng prisoners, Serco split its UK government contract business into a seperate operating business. Chris Hyman, Serco's CEO, resigned and the company is seeking a replacement. In the interim, Ed Casey will be acting CEO. (25,26)

In 2011 Serco reported revenue of £4.6 billion and net profit of £175.2 million. Serco paid UK tax of £63.1 million in 2011. Health revenue is included in the sector Civil Government, which represented 26% of Serco’s total revenue in 2011 at £1,199 million in 2011, up 6% on 2010. (1)

 
In 2012 Serco reported a revenue of £4.9 billion and pre-tax profits of £302 million, a 26.7% increase on the previous year. (22)

Serco is a public company with shares traded on the London Stock Exchange. 

April 2006: Five year contract to provide Out Of Hours service in Cornwall and Scilly Isles valued at £6.1 million. In 2011 the contract was renewed for a further five years valued at £6.4 million.

2009: Formed GSTS Pathology a joint venture with Guy's and St Thomas' NHS Foundation Trust providing pathology services. The 50:50 joint venture was under a ten-year contract valued at around £250 million to Serco. This Joint Venture was agreed on 22 December 2008 with a start date of 1 February 2009. GSTS won the contract to provide pathology services for King's College Hospital Foundation Trust in 2010. As a result of the inclusion of King’s into the joint venture, Serco’s share of the joint venture is expected to reduce over time but Serco will retain a minimum one-third share of the joint venture. In December 2009 GSTS won a contract to provide pathology services to Bedford Hospitals NHS Trust (2)

2011: Serco acquired the company that manages Braintree Community Hospital, Essex,which delivers NHS care on behalf of Mid-Essex Primary Care Trust. The hospital provides a range of clinical services, including day surgery, outpatients, imaging, physiotherapy, endoscopy, a rapid assessment unit and a 24-bed inpatient ward.

March 2012: Serco was awarded £130 to £180 million contract at East Kent Hospital University Foundation Trust for services including cleaning, catering, portering, security, waste management, switchboard, pest control, staff accommodation, helpdesk and ward housekeeping (3).

March 2012: Serco was awarded a three-year £140 million contract to provide community health services for NHS Suffolk. Serco will provide community and specialist nursing, the management and operation of community hospitals, speech and language therapy, specialist children’s services and equipment services. (4)

September 2012: A partnership agreement with South Warwickshire Hospital Trust was signed. The nature of this partnership is unclear. It is referred to as an “innovation partnership” that “will seek to use the expertise and skills that both organisations have to improve the care delivered to our patients, whilst delivering best value.” (5)

September 2013: Serco is one of ten organisations to pass the pre-qualification stage in a bid to win a contract from Cambridgeshire and Peterborough CCG to run services for older people. The contract is worth £750 million to £1.1 billion. The company or consortium that is awarded lead provider status will both provide services for older people, including end-of-life care, and be responsible for coordinating care for older people (23).

In addition, Serco currently provide Hospital Facilities Management services at the following hospitals:

Lord Glendonbrook (Conservative): owns shares in Serco. 

Lord Filkin (Labour): paid adviser to Serco.

Lord Gavron: owns shares in Serco.  

Baroness James (Conservative): owns shares in Serco.

Care Quality

Serco has provided out-of-hours GP services to the Cornwall and Scilly Isles Primary Care Trust since April 2006. In July 2012, Serco was severely criticised by the Care Quality Commission, with its report highlighting a shortage of "qualified, skilled and experienced staff to meet people's needs". Serco was also accused of falsifying records to make the service appear faster than it was; Serco admitted that it had done this and apologised. Labour MP Margaret Hodge has called for the National Audit Office (NAO) to investigate Serco’s out-of-hours doctors service.

Serco introduced a new cost-saving NHS IT system to the out-of-hours service it runs in Cornwall last summer as required by the local commissioners, enabling it to replace skilled clinicians with call-handlers without medical training who follow a computer-generated script to assess patients. The move triggered a fourfold increase in ambulance call-outs. (21)

The report by the CQC also noted that a quarter of staff had not completed mandatory training. Although Serco said all their GPs received formal clinical supervision, not all staff had received regular appraisals. Inspectors noted that "the provider did not have an effective system to assess and monitor the quality of service that people receive". (7, 8, 9, 10,11)

In a Guardian article based on an investigation by Corporate Watch, the GSTS service is reported to have been dogged by problems since it began, with computer faults, low staff morale and difficulties with finances. The joint venture has been kept afloat financially by money from the hospitals. GSTS has refuted many of the claims in the article. However, a report by the Care Quality Commission in June 2012 said GSTS was not compliant with the regulation to ensure staff were properly trained and supervised, and have the chance to develop their skills. A month before the Health and Safety Executive found the competency levels of some staff to be "deficient" after a technician received preventative treatment for possible exposure to the Neisseria meningitidis bacterium that can cause meningitis. Furthermore, GSTS reported a loss of £5.9 million in 2011 (12,13,14,15,16).

In June 2011 the Cornish out of hours service operated by Serco came under scrutiny after a six year old boy died as a result of a burst appendix which was not accurately diagnosed. The father of the boy was asked to examine his son in the hospital car park and advised to visit the GP the next day. An inquest heard that the triage nurse did not ask enough questions and was subsequently put on six months close supervision. (20)

Employee Relations

After winning a three year, £140m contact to run community services in Suffolk, Serco announced it was to cut 137 health jobs. Unison said it was "deeply worried" about the affect the staff cuts would have on the level of care. Tim Roberts, from Unison, said: "We warned at the time that the only way they would be able to deliver the contract would be by making drastic cuts and that's exactly what they are now proposing.” (18)

The BBC Radio Four programme Outsourced broadcast in January 2013 reported on Serco’s refuse and recycling centre in Sandwell (West Midlands) outsourced by the council in 2010. The feedback on the contract was largely positive, however one concern was the increase in agency temporary workers. These workers do not have the same holiday pay, sickness rights, or pension - which a company has to pay towards – with the implication that this means a significant saving for the company. (19)

Other Concerns of Note

Serco has come under fire in Australia with regard to its business in prisons and detention centres. Serco staff have been criticised for their actions over the death of refugees following the sinking of a refugee boat off Christmas Island in 2010. There have also been inquests into suicides and beatings of detainees at other detention centres in Australia run by Serco. (17)

In the UK, Serco had a major contract with the UK government for the electronic tagging of prisoners. However, following an audit of the contract, Serco was found to have charged for tagging of prisoners who did not exist, were dead or were still in jail. Serco is now the subject of a criminal investigation by the Serious Fraud Office and has been excluded from new government contracts in this area until a review of operations has been carried out. This led to the cancellation of the privatisation of three prisons in Yorkshire, for which Serco was the lead bidder. (24,25)

Serco is also to be investigated by MPs after a secret internal report into alleged sexual abuse by a member of staff against a detainee at the Serco operated Yarl's Wood detention centre came to light following a four-month legal battle for its publication between the company and The Guardian, which ended with the high court ruling for its disclosure. There is concern over the way that Serco handled the investigation into the allegations including the way it dealt with evidence from another member of staff and the assertions by management about the credibility of the alleged victim. (27)

 

 

  1. http://www.bbc.co.uk/news/uk-england-cornwall-15094116
  2. http://www.guardian.co.uk/society/2013/jan/23/private-health-contractor-999-calls
  3. http://www.serco.com/investors/index.asp
  4. http://www.cambridgeshireandpeterboroughccg.nhs.uk/News/next-stage-of-integrated-Older-Peoples-services-procurement.htm

  5. http://www.bbc.co.uk/news/uk-25052373
  6. http://www.bbc.co.uk/news/uk-22568970
  7. http://uk.reuters.com/article/2013/10/25/uk-serco-idUKBRE99O0D220131025
  8. http://www.theguardian.com/uk-news/2014/may/17/mps-serco-yarls-wood-centre-sex-assault-claim
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