Serco’s Checkered History
Red flags have gone up concerning operations of the giant company around the world.


The Care Quality Commission, which regulates British health services, soon found that Serco’s managers “routinely altered daily performance reports which showed if the service was meeting its targets for responding to calls from patients on time.” [25] And in March 2013, the National Audit Office reported that within a six-month period Serco had on 252 occasions made “unauthorized changes to performance data” that it offered to the NHS about its operations in Cornwall to hide poor performance and create a favorable impression.

Nor are the Cornwall derelictions Serco’s only health-care debacle. In 2009, the British government awarded a $1.29 billion contract outsourcing its biggest pathology lab to GSTS Pathology, a joint venture of Serco, King’s College Hospital, and Guy’s & St. Thomas’ Hospital. In 2011, the pathology lab saw a whopping 400 “clinical incidents”; these errors included blood and tissue samples’ being mislabeled or lost altogether, the Guardian reported. Records requests by Corporate Watch, a not-for-profit organization, revealed that one patient got the wrong blood-test results, and another got inaccurate results for a kidney-damage test.[26] The Care Quality Commission reported in June 2012 that GSTS had failed to comply with regulations for staff training and supervision.[27]

Recent news outside the health-care sector has also called Serco’s ethical standing into question.

Last month in Britain, a 23-year-old Romani woman claimed that at Yarl’s Wood immigration detention center — which is run on contract by Serco — officers coerced women to engage with them sexually, “offer[ing] to make life easier, saying they would have more chance of winning their case or staying in the country” if they acquiesced.[28] Since then, three more women have made similar allegations about inappropriate sexual behavior at Yarl’s Wood.[29] And last year, three staffers at Yarl’s Wood were dismissed after allegations of “sexually inappropriate behavior.”[30] Earlier this year, Serco “paid an undisclosed sum to a 29-year-old asylum seeker from Pakistan who claimed she was sexually assaulted by a nurse at Yarl’s Wood, although the company did not admit liability,” the Guardian reported.[31]

Furthermore, in 2004, a 14-year-old boy, Adam Rickwood, committed suicide at a Serco-run youth facility, becoming the youngest person to die in British custody in modern times. At the inquest, the jury found that staff had inappropriately used a violent restraint method against Rickwood, who had already been saying he would commit suicide if forced to remain in the facility.[32] Staffers had hit him in the nose, giving him a severe nosebleed that was untreated, the inquest found. Shortly afterward, Rickwood hanged himself with a pair of shoelaces.[33]

National Review spoke with Harriet Wistrich, a lawyer for several of the Yarl’s Wood women. She said that though she has direct knowledge only of the detention-center operations of Serco, she thinks the American public has reason to question the $1.249 billion contract award.

“Serco has got a lot of bad marks about it,” Wistrich says, adding that it is “far too large, and that means that they can get away with scandals without it really affecting their ability to carry on bidding for things.”

Allegations have also emerged in Australia about significant problems at Serco-run facilities. Last year, a 2010 Serco training manual was leaked online. It detailed how employees could use physical force to control those held at immigration detention centers, including punches, baton strikes, kicks, and temporarily debilitating blows to pressure points.[34] The Australian minister for immigration and citizenship said that the manual, which had since been replaced, did “not reflect very clear guidelines agreed to by Serco and the Department of Immigration on engagement with people in detention facilities.”[35]

A 2011 inspection by the Australian government found “dangerous overcrowding, inadequate and ill-trained staff, no crisis planning and no requirement that Serco add employees when population exceeded capacity” in the Serco-run facilities.[36] And in September 2013, Guardian reporters discovered that though Serco was contractually required to submit regular reports to the Australian government about several of its detention centers, it had failed to do so.[37] Furthermore, the Australian government has found that since Serco took over facilities, instances of self-harm by immigrant detainees, including children, have increased significantly.[38][39]

The Obama administration must have known about Serco’s checkered history, even as it was being lobbied to award the corporation an ACA insurance-exchange contract. Any one of these scandals would have been troubling enough, but taken together they make you wonder what the U.S. government was thinking — as with so much of the rest of Obamacare. 

Jillian Kay Melchior is a Thomas L. Rhodes Fellow for the Franklin Center for Government and Public Integrity.

EDITOR’S NOTE: This article has been amended since its initial posting.