Firms fined most by regulators still on UK government’s list of top suppliers

theguardian.com:

Companies that have paid hundreds of millions in fines and penalties, have defrauded Whitehall or have faced corruption investigations are among those making the most money from UK government outsourcing, the Observer can reveal.

Observer analysis of data from UK regulators has found the Strategic Suppliers, the 40 private companies that play the biggest role in running outsourced government services, have received well over £500m in financial penalties from regulators since 2010.

Only six of the 40 had not been reprimanded by regulators, with many receiving tens of millions in fines without losing their place as a Strategic Supplier.

Around £300bn, or roughly a third of all public sector spending, is spent on contracts with private firms in any given year.

According to one report by data firm Tussell, the Strategic Suppliers not only receive 11% of that spending, but their income from government contracts rose by 24% between 2019-2020 and 2021-2022 alone.

The Strategic Suppliers is composed of a wide array of companies, from G4S and Serco to the “big four” accounting firms – KPMG, Deloitte, PwC and EY – and weapons manufacturers such as BAE Systems, who handle the biggest and most vital government contracts.

Telecoms giant BT had the highest amount in penalties since 2010 at £184m. Most of that consisted of one £117m penalty imposed by Ofcom, the regulator, in 2012 for artificially overcharging. Almost two thirds of its financial penalties consisted of similar Ofcom rulings where they were ordered to pay back wholesale customers in consumer disputes.

In fact, just seven of the firms – BT, KPMG, Deloitte, PwC, Serco, G4S and BAE – made up nearly 90% of the £520m in fines received by Strategic Suppliers since 2010.

G4S, which