Report lambasts electronic tagging system The £100m-a-year market for electronic tagging of offenders in England and Wales is in the stranglehold of two providers that offer poor value for money and are not making the most of technologies being developed abroad, according to research by the Policy Exchange think-tank. The Ministry of Justice has spent £961m on electronic monitoring in the last 13 years and the market is set to expand further as ministers seek to reduce prison costs by finding secure ways to manage criminals in the community. But the report, published today, finds that the current procurement system is "outdated" and that little competitive pressure has been placed on the suppliers, G4S and Serco, to innovate or bring in more sophisticated machinery. This criticism comes as G4S has announced a lucrative new tagging contract in Scotland, snatching the deal from Serco which has run this service for the past six years. These two companies control the entire UK market, with G4S holding 57 per cent of the contracts and Serco the remaining 43 per cent, according to Jefferies, the investment bank. Policy Exchange - a right-leaning group with close links to Chris Grayling, the newly appointed justice secretary - notes that ankle bracelets in the US are smaller, smarter and more durable than in the UK. The most advanced forms of tags are also GPS-enabled, allowing the police to locate criminals at all times. The report calls for an inquiry into the cost-effectiveness of the current tagging system and suggests that the police and crime commissioners, who will be elected in November, should be given the power to decide who provides tagging in their area. "As technology becomes ever more sophisticated our badly designed procurement system is preventing the police from preventing and detecting crime," said Rory Geoghegan, the report's author. We desperately need to create a real market so that the police can get the technology they need to cut burglary, cut robbery and other crimes that have a massive impact on victims and the community. "The public and the police support tagging criminals, but we need to be confident that the public is getting the protection and the value for money they need and should rightly expect," Mr Geoghegan added. Mr Grayling responded that new contracts for electronic monitoring were due to come into effect from April 2013; these would use more advanced technology and "represent better value for taxpayers." He said: "The call for a smarter, more integrated approach that takes advantage of the latest technology is very much in line with the government's initiatives in reducing re-offending and protecting the public." The G4S tagging contract in Scotland will be the first in which GPS technology has been used.