Serco chief rejects outsourcing criticism as profits and pipeline grow
The outsourcing giant's boss says political attacks miss the reality of local jobs and apprenticeships, while analysts argue fiscal pressure will keep government pragmatic.
Serco chief executive Anthony Kirby has pushed back against a wave of political and media criticism, arguing that the company's record on local employment and apprenticeships contradicts claims that outsourcing has hollowed out British public services. The defence came as the FTSE 250 group posted half-year revenue of £2.5bn, ahead of expectations, and lifted its contract pipeline to £12.8bn.
The New Statesman ran a cover story in June accusing firms such as Serco of presiding over a state of "national failure" and arguing that Britain had "lost control" of its infrastructure and immigration systems. Days later, Reform UK home affairs spokesman Zia Yusuf alleged the contractor would refuse to support deportation plans under a Reform government, calling it an "alternative power base to the duly-elected government of the UK". Serco responded that it does not take political positions and would continue to offer immigration services.
Results underline operational scale
Kirby said the company had "pushed back on all of the accusations" and pointed to 600 apprenticeships in the UK and a model in which 90 per cent of staff on local contracts are recruited from surrounding communities. "I'm very proud of what our people do in the UK to deliver complex, mission-critical services," he said. The chief executive, who grew up in a council house in what he described as the most deprived area of the country, added that giving people opportunities to succeed was the "linchpin" of Serco's local delivery.
We judge everything independently. We are an organisation that is built on doing the right thing because it's the right thing to do.
On procurement reform, Kirby welcomed changes led by Louise Haigh, chief secretary to the treasury, that prioritise local job creation over compliance with net-zero rules, modern-slavery checks and equality requirements. He said the issue was personal to him.
Analysts see pragmatic path ahead
Panmure Liberum managing director Joe Brent said negative headlines were an "occupational hazard" for Serco. "The reality is that they save the government money. At times of fiscal strain, the government will have to be pragmatic rather than ideological," he said. The company is also targeting further wins in the US across health-centre management and defence facilities.
With the pipeline expanding and the share price rising more than five per cent on the results, the immediate pressure is commercial rather than reputational. The political noise, however, is unlikely to fade before the next election cycle.
