Solid State reaches agreement with MoJ for contract cancellation

Last updated on: June 6, 2016, Author: R Sahota

Redditch electronics maker Solid State is set to benefit from a one-off profit payment after reaching a settlement with the Ministry of Justice (MoJ) over the termination of a £34m contract.

While the settlement is subject to a confidentiality clause, Solid State said it expects pre-tax profit to climb to £4.1m for the year to 31 March as a result of the one-off payment.

Gary Marsh, chief executive of Solid State, said: “We are delighted that a resolution to the MoJ contract has been reached so swiftly and that management can now focus fully on the continued development of the core group and its businesses.

The £23m bespoke electronic tagging contract was cancelled earlier this year. The government concluded that the proposed development of bespoke technology would have “significant problems”.

In a statement to the House of Commons yesterday, justice minister Dominic Raab said that the contract with technology firm Steatite had faced considerable delays.

The deal was entered into after it was revealed that the Ministry of Justice had been billed for millions of pounds worth of electronic tagging by G4S and Serco for services that had not been carried out.

The tags being developed for the government by Steatite were to improve offender tracking through more advanced use of GPS. Current tags work on a specific radio frequency, but moving to a system based on satellites is thought to be more flexible.

When the deal was signed in July 2014, the MoJ said it had a net present cost of £23.2m, while the department said yesterday around £21m had been spent on the programme to date.

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