Serco to pay Department of Corrections $8 million

By Harata Brown

Serco is set to pay the Department of Corrections $8 million for stepping in last year to manage Mt Eden Prison.

Labour's Corrections spokesman Kelvin Davis has hit back calling Serco a mere "labour hire outfit."

Davis says Serco's contract to manage prisons in New Zealand should end immediately.  

“I think their contract needs to end. They need to be thrown out of New Zealand and that door needs to be shut outright.”

Serco has agreed to pay Corrections $8 million for the costs incurred by Corrections after they stepped in and took over management at Mt Eden Prison last July.

Today, Mark Irn, Serco's CEO apologised for their management at the prison.

He says, “There were certain aspects of our service delivery which did not meet the standards of the contract, and certainly the standards that we meet for ourselves, and for that I am truly sorry.

Corrections took over management at Mt Eden after allegations of assaults and fight clubs in the prison surfaced last year. 

The Chief Executive of the Department of Corrections, Ray Smith says, “So practically and pragmatically we have been running it for the last nine months. The idea that we would hand that back for 12 (months to Serco doesn't really make any sense.”

Serco's contract has been watered down to a labour supply agreement which ends in March 2017.

Smith says, "We'll pay for the labour that we receive to help us run the Prison through, while corrections continues to run the Prison on through the contract and beyond.”

According Kelvin Davis, “its labour hire. I think it's a waste of money because Corrections can go on Trade Me and find their own workers.”

Neither Corrections nor Serco were willing to make comment on the Chief Inspector of Corrections' report into Serco's management at Mt Eden as the case is currently before the courts.