Serco shares fall on bungled accommodation for asylum seekers

Scandal-enveloped Serco and G4S - the security companies that over-charged the government for the electronic tagging of released, in jail or dead prisoners - have been criticised by the National Audit Office for failing to deliver on a £620m deal to provide accommodation for asylum seekers.

Along with fellow contractor Clearel, G4S and Serco won six government contracts back in 2012 to house 23,000 asylum seekers. The deals were intended to help save the Home Office £140m on the service over a seven year period.

But the report by the watchdog implies that bad performance on the part of the companies actually resulted in delays and extra costs for the government.

It found that the two firms took on housing stock without inspecting it first, and then failed to meet required standards, adding to worries over their competency.

However, shadow immigration minister David Hanson placed blame on Home Office for having "botched" management of the contracts, adding that it must come clean on how much is being spent.

Shares in Serco dropped over 2.5 per cent this morning. Credit Suisse had predicted a fall of 1.2 per cent on the back of the news. G4S shares ticked up slightly.

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