27. Following the discovery of overcharging on electronic monitoring, the government asked G4S and Serco to undertake a process of 'corporate renewal'.[44] The two firms told us this has involved senior management changes, strengthening of internal controls, ethical training and changes to incentive and reward structures. While we accept that there are new senior managers in place at the firms, the contractors were less clear how corporate renewal has changed day-to-day operations.[45] The Cabinet Office described how government was engaged in overseeing corporate renewal at a very senior level.[46] While corporate renewal is ongoing, the firms have continued to deliver government services and win contracts for additional works.[47]
28. Recommendation: The 'corporate renewal' process is a new concept for many. The Cabinet Office and HM Treasury should publish a review of this process and its outcome, and, when disseminating findings, make clear to all departments what it expects them to do differently and what different behaviours departments should expect from the contractors.
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44 C&AG's report, Transforming government's contract management, Paragraph 6
45 AQ 22, 24 54 61
46 BQ 47
47 Written submissions from Serco, G4S and Cabinet Office