Capita share price up as outsourcing firm picked for new prisoner tagging contract

 
Suzie Neuwirth
The Ministry of Justice confirmed that Capita will manage the prisoner tagging contract (Source: Getty Images)
Outsourcing firm Capita will manage a six-year prisoner tagging contract previously held by G4S and Serco, the Ministry of Justice confirmed yesterday.

The FTSE 100-listed company has been managing the service on an interim basis since April, after G4S and Serco were found to have overcharged the government. The new contract is worth £228.8m.

Three other firms will deliver other parts of the service. Steatite will develop and manufacture the equipment, in a three-year £23.3m deal. Airbus will provide satellite-mapping and Telefonica will supply the network, worth £10.4m and £3.2m respectively over the next three years.

The new contracts are expected to save £20m a year compared to the previous contracts, once fully established.

The MoJ said it would have far greater oversight over costs and charging than under the previous contract, with direct access to the supplier’s systems.

But Capita’s award was criticised due to previous gaffes including its failure to provide enough interpreters for courts. Sadiq Khan, the shadow justice secretary, said the MoJ had “a shambolic track record of incompetence when it comes to multi-million pound contracts with big private companies”.

Capita’s shares closed up 0.09 per cent at 1,129p.

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