Cabinet Office minister Francis Maude hopes that controversial government suppliers G4S and Serco will emerge from a review of their contracts "renewed" and "stronger".
G4S and Serco are currently being investigated by the Serious Fraud Office after they were found to have overcharged the Ministry of Justice on electronic tagging contracts for years. G4S yesterday announced that it had refunded the government £24.1 million, however a dispute remains between government and the suppliers over the exact amount of overcharging.
In a column in the Independent, Maude said: "People ask if our reviews of contracts is government 'getting tough' on suppliers who have had it too easy for too long. It's not that simple. I want the companies we are reviewing to emerge renewed and stronger.
"Our reviews into G4S and Serco's contracts are rigorous and extensive. But when they report, and we are satisfied full health has been restored, we will move on quickly."
He went on to say that the government needed a "vibrant mix" of suppliers - a "hybrid economy of diverse partners", including mutuals, joint ventures and social enterprises.
The Cabinet Office has implemented a number of reforms in recent months in an attempt to squeeze out the handful of traditional suppliers to the public sector by working with more SMEs and transforming contracts to introduce multi-million pound savings.Some £840 million has been saved with strategic suppliers between 2012-2013 thanks to the reforms.
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