NewsStocksSerco Chief Executive Anthony Kirby Rejects Outsourcing Criticism Amid Strong Financial Results

Serco Chief Executive Anthony Kirby Rejects Outsourcing Criticism Amid Strong Financial Results

Author: City AM Markets·

Key Takeaways

  • Serco reported first-half revenue of £2.5 billion, exceeding expectations, and its share price rose by more than five per cent.
  • The company's pipeline of potential new contracts increased to £12.8 billion across defence and local services.
  • CEO Anthony Kirby rejected accusations from the New Statesman and Reform's Zia Yusuf, arguing the firm's track record refutes criticism.
  • Kirby highlighted that Serco provides 600 apprenticeships in the UK and draws 90 per cent of local contract employment from surrounding communities.
  • Serco is targeting further contract wins in the United States, including management of health centres and defence facilities.
Serco Chief Executive Anthony Kirby Rejects Outsourcing Criticism Amid Strong Financial Results

Serco's chief executive Anthony Kirby has firmly rejected media criticism of the outsourcing giant after the company reported stronger-than-expected first-half results and signalled further contract growth ahead.

The London-listed firm, one of Britain's largest outsourcing companies with operations spanning everything from bin collections to asylum accommodation, said it remained committed to bidding for complex public service contracts in the UK despite contentious media coverage of its operations. Serco, which has delivered public services for UK governments for decades, sits at the centre of a long-running debate over whether private contractors should run sensitive state functions — a discussion that has intensified as successive governments seek to cut costs while maintaining service quality.

Kirby dismissed what he described as "all accusations" levelled in the New Statesman, which has become essential reading for left-leaning politicos, that government outsourcing to firms including Serco had demonstrated Britain had "lost control" and was stuck in a state of "national failure" (New Statesman cover story).

The magazine's June cover story, published a week before the Makerfield by-election won by Andy Burnham, pinned the country's infrastructure and immigration problems on outsourcing to Serco.

The company also came under fire from Reform's home affairs spokesman Zia Yusuf over reports that the contractor would refuse to support deportation plans if Reform entered government. Yusuf accused Serco of becoming an "alternative power base to the duly-elected government of the UK" (City AM). A company spokesman responded that Serco did not take "political positions" and would continue to offer immigration services.

Kirby argued that the outsourcing firm, which posted bumper results on Thursday morning and saw its share price rise by over five per cent, had proven that criticism of its operations was unfounded. He pointed to the company's provision of 600 apprenticeships in the UK and the fact that 90 per cent of employment for local contracts is drawn from surrounding communities.

"We've been able to push back on all of [the accusations]," Kirby said. "I'm very proud of what our people do in the UK to deliver complex, mission-critical services. On a number of cases, like I say, we've pushed back."

Serco "used to" negative headlines

Kirby also praised recent procurement reforms led by Louise Haigh, described as Burnham's chief government enforcer, that encourage bidders to focus on local job creation over complying with net zero rules, tackling modern slavery and promoting equality (City AM).

The Liverpudlian said the issue was "personal" to him, noting that he had grown up in a council house in the "most deprived area of the country".

He added: "Giving people opportunities to get on and succeed in life is really the linchpin of how we deliver our services locally in those communities."

Responding to questions about Yusuf's criticism and Reform's radical policies to tackle illegal migration, Kirby said Serco had "strict criteria, which is set by the board, around ethics and compliance".

"We judge everything independently. We are an organisation that is built on doing the right thing because it's the right thing to do," he said.

On Thursday, the FTSE 250 firm said it had additional contract opportunities emerging across defence and other local services, with its pipeline of potential new work rising further to £12.8bn.

Revenue for the first half of the year came in higher than expected at £2.5bn, with the company also targeting further contract wins in the US spanning areas from managing health centres to defence facilities. Serco already generates a substantial portion of its revenue from North America, where it has built a presence in defence and healthcare services contracting.

Panmure Liberum managing director Joe Brent said Serco was "used to" negative headlines and that such scrutiny was an "occupational hazard for them".

"The reality is that they save the government money. At times of fiscal strain, the government will have to be pragmatic rather than ideological," Brent said.