Serco will not seek a rebate from its suppliers as result of a commitment to government costs savings, the public service outsourcing firm has confirmed in a statement.

According to The Sunday Telegraph, following a meeting with Cabinet Office minister Francis Maude to discuss cost savings, Serco agreed to support the Coalition’s plans to save £800m from central government procurement.  The firm’s finance director, Andrew Jenner then wrote to 193 of Serco’s suppliers asking for a 2.5% cash rebate on work for 2010 in the form of a credit note.

The statement says: “Serco yesterday reaffirmed to the Cabinet Office that Serco’s most recent offer of savings to the UK government will not result in any of the government’s cost saving programme being passed on to our suppliers.

“Serco has an ongoing procurement process with our supply chain partners, which has been underway for more than five years. This is part of our regular management system.

“More recently we have also been working with the Cabinet Office as part of their efficiency programme, which has involved discussions with our leading suppliers. As a result our plans evolved and we decided not to seek or accept any contributions from our suppliers, who had recently received letters asking for rebates.

“As a company that values our relationships with all our supply chain partners, large and small, we deeply regret this action and apologise unreservedly to them for the concern that this has caused. We are now communicating this to our supply chain partners and retracting the letters.”