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Serco’s chair resigns, takes blame for crisis

The chair of Serco has fallen on his sword, taking “ultimate responsibility” for the string of “operational mis-steps” that have hit the business, announcing he will step down.

Alastair Lyons, who has been in the role since 2010, insisted he was not sacked but said he will leave the company – which is among the UK’s largest public sector outsourcing companies – as soon as a replacement is found, possibly in early 2015.

“The initial findings of the strategy and balance sheet review point to strategic and operational missteps at Serco for which, as chairman of the board since 2010, I take ultimate responsibility,” he said.

He added: "Whilst colleagues have asked me not to resign, it has been my intention to step down once a new strategy and direction for the business were in place.

"I am, therefore, taking the necessary steps to ensure an orderly process for my own succession during the first half of 2015."

Rupert Soames, Serco’s chief executive, who arrived in May, said of Lyons: “I want to put on record the fact that he has done an outstanding job stewarding the company through the travails of the last 12 months.”

The company provides facilities to many local governments and operating UK prisons, military bases, immigration detention centres, hospitals and GP out-of-hours services. It also runs rail operations, including the Docklands Light Railway, Northern Rail (with Abellio) and the Caledonian sleeper service.

It has suffered heavy losses in recent months, reporting in August that it had made a pre-tax loss of £7.3m for the year, due to reorganising costs and loss-making contracts.

Last week it was forced to bring forward the results of an internal inquiry into its 700 contracts and warn that it expected to write down the value of the business by as much as £1.5bn after discovering a series of lossmaking government contracts.

In 2013, Serco was given a six-month ban on securing new UK government contracts after it was referred to Britain’s Serious Fraud Office for overcharging on electronic monitoring contracts.

(Image: c. Ian Nicholson/PA)

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