Public Affairs: Under-fire Serco calls for help with lobbying

Serco, which runs prisons, schools and nuclear facilities for the Government, has been attacked for the manner in which it conducts negotiations with suppliers. Last week, the company was forced to apologise for demanding cash rebates from its biggest suppliers in an attempt to help it deliver the Government's cost savings.

According to reports, Serco's stance angered Cabinet Office minister Francis Maude because the Government had agreed with Serco that the cuts would come from its own profit margins, rather than those of suppliers and sub-contractors.

This week, it emerged that Serco had contacted leading public affairs firms, asking them to send in credentials. The firm is planning to hold a pitch at the end of November, with UK director of government relations Stephanie Elsy overseeing the process. Serco is understood to be preparing to hand out a substantial retainer.

Serco has previously used Fleishman-Hillard for UK public affairs, but the agency's head of public affairs Nick Williams said it had not worked with Serco in months and that it had previously worked on a 'very specific issue'. He did not say whether F-H would be pitching for the new business.

Last week's news wiped almost eight per cent from Serco's share price in two days.