Outsourcing giants G4S and Serco have revealed huge falls in profits following the ending of their contracts with the Ministry of Justice to supply electronic tagging.

Last year the companies were stripped of their contracts with the MoJ after it emerged that they had overcharged the government ‘tens of millions of pounds’ by tagging people who were dead, in prison or who had left the country.

Justice minister Chris Grayling said yesterday that G4S and Serco could still face criminal proceedings by the Serious Fraud Office over the electronic tagging contract.

Monitoring responsibilities will be handed to outsourcing company Capita by the end of the financial year.

In its preliminary results for 2013, G4S said it had written off £136m in a global review of contract restructuring ‘including a provision for the UK Electronic Monitoring contract’.

G4S reported a £170m pre-tax loss for 2013, compared with profits of £158m for 2012. In a statement the company said: ‘This has been an extremely challenging year for G4S.’

It said: ‘The company continues to engage in constructive discussions with the UK government and we remain committed to resolving all matters relating to the electronic monitoring contracts.’

Earlier this month Serco announced ‘reduced profit and cash generation’ with a net charge of £90.5m ‘reflecting principally the Electronic Monitoring settlement and one-off costs, together with an estimated £21m of other indirect costs in relation to the UK government reviews’.