Serco chairman Alaistair Lyons resigns

Exit Sign

The chairman of scandal-hit outsourcing group Serco is stepping down, saying that he takes “ultimate responsibility” for the string of “operational mis-steps” that have hit the business.

Alastair Lyons, who has led the Serco board since 2010, insisted that he had not been sacked, however. “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.”

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

Serco, which runs trains, GP out-of-hours services, immigration detention centres, prisons and also provides street-cleaning services, last week issued its fourth profits warning in a year, prompting investors to ditch the stock, wiping one third of its share price. The firm said its 2014 profits would be £20m lower than forecast because of worse-than-expected losses on some problem contracts. Serco admitted it had made “strategic mis-steps” in the past, by diversifying into areas of business where it had little expertise.

The group, which employs 120,000 people in 30 countries, has hardly been out of the public eye since it emerged that it had overcharged the taxpayer for tagging prisoners. The firm has also faced criticism for failure to provide decent accommodation for vulnerable asylum seekers and for running inadequate GP out-of-hours services that led to the premature end of a contract in Cornwall.

The company revealed last week that it would not have made any profit in 2009-13, were it not for a controversial contract running Australia’s migrant detention centres, including a facility on Christmas Island, which was condemned by Australia’s top human rights official for its unhealthy conditions.

Powered by Guardian.co.ukThis article was written by Jennifer Rankin, for The Guardian on Monday 17th November 2014 10.43 Europe/London

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