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UK minister sees 'stronger' G4S after review

A G4S security van is parked outside a bank in Loughborough, central England, August 28, 2013. REUTERS/Darren Staples

(Reuters) - The British minister who launched a review into G4S (GFS.L) and Serco's (SRP.L) government contracts scandal said he expects the companies to emerge "renewed and stronger" from the process.

The political spotlight is firmly on Britain's use of private outsourcing groups to run public services like prisons and hospitals after a series of high-profile contract failures.

Both G4S and Serco are being investigated by the UK's Serious Fraud Office after an audit showed they had charged for electronically tagging criminals who were either dead, in prison or had never been tagged in the first place.

In a column in The Independent, Cabinet Office Minister Francis Maude said, "I want the companies we are reviewing to emerge renewed and stronger.

"Our reviews into G4S and Serco's contracts are rigorous and extensive," he added. "But when they report, and we are satisfied full health has been restored, we will move on quickly."

G4S and Serco hold some of Britain's largest outsourcing contracts; they get 10 percent and 25 percent of their revenue, respectively, from the central government.

For now, neither company is able to win new central government work until receiving the all clear from a Cabinet Office inquiry into the biggest contracts with the companies.

Representatives of G4S, Serco, Capita (CPI.L) and Atos (ATOS.PA) will be publicly questioned by a parliamentary select committee on Wednesday over transparency and lack of competition among outsourcing firms.

(Reporting by Karen Rebelo in Bangalore; Editing by Jan Paschal)