Serco loses £3m for poor performance and errors in council contract

A company that runs services for Lincolnshire County Council has been effectively fined almost £3 million due to poor performance and various errors.

Serco struck a £70 million deal in 2014 to run things like payroll and handle calls.

Via a Freedom of Information request, we discovered that between then and July this year £2,725,294.66 was deducted from their fee in 'service credits' because of things like failing to pay council staff and staff at some schools properly.

Service credits are a method the council uses to get money back off contractors if their services aren't up to scratch.

Any cash they get back is spent putting things right, according to terms set out in their contract with the company.

In September last year around 30 staff at Lincoln's Bishop King Primary School were paid the wrong amount, or not at all. 

This February year a staff member at Monks Abbey Primary School in Lincoln almost inadvertently became a millionaire, after a blunder in Serco's payroll system almost led to £1.5 million being paid out.

The mistake was spotted by the school's own business manager.

Several schools have since exited the contract with Serco after facing consistent problems.

Lincolnshire County Council insist the contract is still delivering good value for money and the service is improving. They continue to hold the company to account against a set of strict targets.

A Serco spokesperson told us: "“We continue to work tirelessly, alongside the Council, to resolve any outstanding issues and improve our performance against contracted targets."

"We have invested additional resources in service delivery and have made significant progress, but we know there is more still to do. We remain committed to ensuring that this contract is a success for Lincolnshire County Council, its workforce and citizens across the county”.

Serco claim they don't make a profit from the £70m contract.

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