The Observer
52 09.01.22 BusinessProfi le
Rupert Soames
Chief executive of Serco
R
upert Soames was
driving north “one
dark and stormy
night” in late 2013
when an item on the
6pm news made his
ears prick up. Serco, the outsourcing
giant that had become synonymous
with ripping off the taxpayer, had
just sacked its chief executive.
“I got on to the headhunter that
evening and said, ‘So can I do it? Can
I do it?’ I had always wanted to do
a turnaround that was very large ...
but most importantly I wanted to do
something in public service.”
Soames got the job and joined in
early 2014, when Serco was vying for
the label of Britain’s most-reviled
company. It was in the dock for
having overcharged the Ministry
of Justice (MoJ) tens of millions of
pounds for electronically tagging
offenders, some of whom were dead
or still in prison; its shares were in
freefall; and it was barred from win-
ning new government work.
“I have a horrible habit of walking
towards gunfi re,” says Soames with
a grin, sitting in the central London
offi ce of his public relations adviser,
wearing his trademark blue shirt
embroidered with the words “Serco
and proud of it”. (He ordered a batch
when he was appointed.)
The new chief executive’s approach
combined gusto with a heavy dose
of gallows humour. His initial
appeal to staff was: “Bring out your
dead.” In response, he says, “rather a
lot of bodies came fl ying out ”.
Soames puts his appetite for dan-
ger in the line of duty down to his
ancestry: his grandfather was Sir
Winston Churchill.
“It may come as an amazing sur-
prise to you, but it’s something that
comes with some family history of
public service,” he says. “And I could
never be a politician because I can’t
remember people’s names .”
Westminster might have been the
obvious choice: his eldest brother,
Sir Nicholas Soames, is a former
Conservative defence minister; his
father was Sir Christopher Soames, a
Tory minister in the 1960s and later
ambassador to France.
The public service Soames
chose was of an altogether grit-
tier kind. Serco works in some of
the most sensitive corners of gov-
ernment, dicing with scandal on a
daily basis. It runs six prisons for
the MoJ; it houses asylum seekers; it
runs London’s Santander bike hire
scheme; and it helps run the much-
criticised £37bn Covid test and trace
system for the NHS.
Soames keeps a toilet brush on his
desk – he calls it his “shit-o-meter”- to emphasise how precarious it all
is. “ Its bristles are fi nely tuned, so if
I come in in the morning and they’re
going clackety-clack, something is
going wrong somewhere.”
With some exceptions, the shit-
o-meter has not rattled as loudly in
recent years. Serco’s shares have not
quite taken off, but it has restored its
dividend, and is plotting expansion.
Yet for all Soames’s efforts , the
principle of government outsourc-
ing – where the state pays the pri-
vate sector to do its work – has
rarely looked so uncertain. Water
companies are under fi re for pump-
ing sewage into rivers and the sea ,
and a Tory government has taken
to renationalising services – from
energy suppler Bulb to railways.
Soames says some of his prede-
cessors were “deeply complacent”
that the outsourcing trend turbo-
charged by New Labour would con-
tinue unchallenged – and this led to
Serco’s near-death experience, and
the collapse of rivals from Carillion
to Interserve. Yet, he says, the prin-
ciple still stands fi rm. “It’s called
choice. It’s called competition. It’s
called calling for new ideas.”
Still, there are lines even Soames
will not cross – “actually fi ring
guns” in the defence business, or
“taking decisions or making judg-
ments about people’s lives” in pris-
ons and immigration.
While governments have leaned
heavily on the private sector during
the pandemic for everything from
vaccine development to supply-
ing PPE, accusations of profi teering ,
cronyism and poor scrutiny of con-
tracts have further frayed that pact.
Serco – and Soames – have been
well paid for their test and trace
work. At it one point, Serco had
20,000 people working on it –
many of them calling contacts of the
infected and telling them to isolate.
Last year the company earned about
£700m in Covid-related revenues
around the world – the bulk of this
in the UK – with a 5% profi t margin.
There’s a pause as Soames wres-
tles with whether contact tracing
has actually worked, or been a waste
of taxpayer money. “ Tracing worked
up to the point when the pandemic
ran completely out of control,” he
says. “I personally believe that it
worked in between the times of the
very greatest peaks.”
Now, with Omicron endemic and
an estimated one in 15 people in the
UK infected , tracing appears futile.
Soames says the issue of whether
it was a good idea, or whether it
worked, is above Serco’s pay grade.
“The government was taking advice
from scientists, who said you need
to do tracing ... What if there hadn’t
been any tracing? I think people
would have been outraged.”The outsourcing fi rm’s
boss claims to take
tricky public service
work – asylum, prisons,
Covid – in his stride,
and the returns have
certainly been sweet,
he tells John Collingridge
Age 62
Family Married with three children
Education Eton College, followed by
politics, philosophy and economics at
Oxford University.
Pay £4.9m including bonuses
Last holiday A trip to Mallaig on the
west coast of Scotland, where he
has a home.
Best advice he’s been given
Something he read, rather than being
told: J Paul Getty’s maxim, “Rise
early, work hard, strike oil.” However,
he qualifi es that by adding: “You can’t
say to people who do 12-hour shifts
in a prison that they don’t work hardenough. A lot of it is an accident of
birth. And a lot of it is luck.”
Biggest career mistake An
attempted management buyout,
when he was in his late 30s, of
Birmingham weighing scale company
Avery. “Th e timing and fi nancing
were wrong and I got fi red.”
Word he overuses “Yes”, and
another word “that’s not for a family
newspaper”.
How he relaxes “Walking the hills in
Scotland and mucking around with
boats. If I wasn’t doing this job, I
would like to be coxswain of the RNLI
lifeboat at Mallaig.”Executive summary
London’s Santander bike
scheme is one of the less
controversial contracts handled
by Rupert Soames’s Serco.
Antonio Olmos/the ObserverSoames took a meandering jour-
ney to Serco. The old Etonian went
to Oxford University, where he was
president of the union, a member of
the notorious Bullingdon Club and
a DJ. He w as offered a job at GEC
Marconi by its boss, Lord Weinstock,
then moved to software busi-
ness Misys , before turning round
Aggreko, a Glasgow-based emer-
gency power generator company,
taking it into the FTSE 100.
There has been anger at his pay
at Serco : last year’s £4.9m package
took his total earnings since join-
ing to £23.5m. “I’m very well paid ,”
he says. “Of course I think about the
pay differential (with the company’s
lowest-paid staff), but I am made of
fl esh and blood.”
We are almost out of time, but
there is still enough for one fi nal
party piece from Soames the DJ. He
triumphantly sets his iPhone on
the table and the soaring chords of
Samuel Barber’s Adagio for Strings
fi ll the room , before Puff Daddy’s
lament for Biggie Smalls, I’ll Be
Missing You , kicks in.
The chief executive of Serco leaps
to his feet and does an impression of
a dancing pallbearer: “This is what I
want to have at my funeral.”