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The prisons minister has met with bosses of security company Serco after delays in fitting some offenders with tags, Sky News understands.
The Ministry of Justice (MoJ) confirmed the delays after the BBC reported some prisoners freed under the government's early release scheme had been let out of jail without the monitoring devices.
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The MoJ blamed Serco, which took over the government's tagging contract in May 2024.
The department said it was holding the firm "to account" and tags are being prioritised for domestic abuse offenders while the issue is ongoing.
A Ministry of Justice spokesperson said: "Tagging is an important part of our strategy to keep victims safe and cut reoffending, and there are currently record numbers of offenders wearing tags.
"We are holding Serco to account to address delays in fitting some offenders with tags, and will apply financial penalties against the company if this is not resolved quickly.
"While this issue is ongoing, we have prioritised tagging domestic-abuse offenders to make sure their licence conditions, such as staying away from their victims, are strictly followed."
It is not clear what is causing the delays. A government source denied there was a shortage of tags.
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Sky News understands Prisons Minister James Timpson met with Serco bosses on Thursday to discuss the matter.
Electronic tags are used in England and Wales to monitor curfews and conditions of a court or prison order.
Last week around 1,700 prisoners were let out early under a government scheme to ease overcrowding.
The controversial plan has sparked concerns over public safety, and the risk of prisoners re-offending.
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Ministers have blamed the Tories for leaving behind a system they insist was on the brink of collapse, saying to do nothing would grind courts to a halt and stop police from making arrests.
They said the scheme will not apply to sexual offences, serious violence, terrorism offences and some domestic abuse offences, and anyone released early will be strictly monitored on licence by the Probation Service through tagging and curfews.
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In a statement to the BBC, Serco said tagging can take longer when a person is not at home to have it fitted.
The spokesperson said: "Since we took over the electronic monitoring contract in May we have been working hard to reduce the number of people waiting to have a tag fitted.
"We work closely with the MoJ and the probation service to fit tags swiftly and prioritise cases based on risk profiles.
"Where an individual is not at home when we call to fit a tag the time taken can be longer. We prioritise making another visit so that people are tagged as soon as possible."