2012-2019 Private Forensic Companies in Trouble
The police now in complete control cut their spend on forensic science. They go with the cheapest bid, build their own labs and reduce submissions to private companies.
Introduction
The following is based largely on the 2019 House of Lords Report Forensic science and the criminal justice system: a blueprint for change, which can be found here.
Did the Private Forensic Science Providers Prosper?
After the closure of the Forensic Science Service (FSS) in 2012, the private forensic science market experienced significant changes and instability. By 2019 the three private providers had made some serious potentially, catastrophic losses. By the time the CEOs of the private companies arrived in front of the House of Lords the companies were on their knees.
In 2017 and 2018 Cellmark made a combined loss of £12 million, between 2018 and 2019 Eurofins made a combined loss of approx £4.5 millon and Key Forensic Services had to be rescued from administration in 2017.
The US giant Labcorp had seen enough of the UK forensic science market and exited by disposing of Cellmark via an internal management buy out. Eurofins Forensic Services had to rely on its parent company, the Eurpoean testing giant - Eurofins Scientific, to keep it afloat. Key Forensic Services new owners were attempting to rebuild them from the ashes. They desperately needed the government to intervene.
David Hartshorne (Cellmark Forensic Services): Could I just come back to nuance the funding issue a bit? The issue of increased pricing is right because we have reached a critical point and we have to protect the integrity of the forensic service provision that we have. At the moment, we have staff across our organisation who are leaving the industry because they are better paid in teaching than in forensic science. That is one example: there are serious concerns about maintaining our scientific base. But just increasing the prices for the individual product codes and the services that we provide is one thing.
Fundamentally, part of our problem is about volume as well. Because of austerity cuts in police budgets we are seeing restrictions on the amount of work that is being submitted, so we are seeing crimes that are not being investigated or forensic work that is not being done to the extent that it could be or should be. With the fixed overheads that these organisations have to be able to provide good-quality forensic science, we need to make sure that we have some of the volume going through them as well so it is not just about increasing the pricing of units but using forensics better to make savings elsewhere in the criminal justice system.
Dr Mark Pearse (Eurofins Forensic Services): From my point of view, there is a timing issue because we need funding very quickly. But what is required over the medium term is for the whole criminal justice system and the agency within that system to recognise forensic science as a vehicle to realise efficiencies in the investigation process and in the courts—guilty pleas, early detection of individuals et cetera—rather than a burden on police departmental budgets. That is the wrong approach; a pound spent on forensics can save tens of thousands down the line in guilty pleas, so averting the need for a trial. We need that understanding across the agencies and the analysis of that in a recognised, published way that people could use to justify investment.
Paul Hackett (Key Forensic Services): I am concurring violently with Mark. I think Mark is spot-on, but just because I like the sound of my own voice and want to embellish on that, in the short term it is about price increases. We have contracts now with all of the police forces and they are a vehicle in the very short term to increase the charges for the services that we deliver. That would solve the immediate crisis. Then I think we need to look at alternative methods of procuring forensic science.
Mark is absolutely right: the budget is held by the police force carrying out the investigation. The benefits are often recognised further down the supply chain in the courts and by the CPS. Until someone takes a holistic view and recognises that money spent over here can save tenfold the money spent over there, no one will see the bigger picture. Sadly, that is what we are missing. The holistic picture has gone—the umbrella or helicopter view, call it whatever you like. Nobody seems to know what is going on any more with the left hand and right hand. We are all competing in silos. Every chief constable is doing whatever they can to save money—quite rightly—because that is their target. But that impact does not take a collective view. That is the big problem that we have right now.
Here's a breakdown of what happened to private forensic science providers:
Market Domination: The private market became dominated by three large providers, all of whom have faced instability. These providers included:
LGC Forensics, which was acquired by Eurofins Forensic Services (EFS).
Key Forensic Services, which nearly collapsed before being bought by a corporate acquisition company, CorpAcq.
Orchid Cellmark Ltd (trading as Cellmark Forensic Services), which was acquired in a management buyout from its former US parent company.
Smaller Providers: The market also includes a number of smaller private forensic science service providers, some of which employ only a few people.
Increased In-House Work: Following the closure of the FSS, police forces increasingly began to conduct certain types of forensic analysis 'in-house,' particularly in disciplines such as fingerprint analysis and digital forensics.
Decline in Spending: There was a significant reduction in spending on forensic science services after the closure of the FSS. In 2008, around £120 million was spent on forensic science, but this figure decreased to approximately £50 to £55 million. Spending on commercial providers fell more sharply than overall police spending, with a drop of about 29% between 2012/13 and 2014/15.
Market Instability: The closure of the FSS contributed to market fragility, as predicted. Events such as Key Forensic Services going into administration and Randox Testing Services being suspended from providing toxicology services produced knock-on effects for other providers and the criminal justice system.
Consequences of Market Instability:
Potential loss of continuity of exhibits.
Potential degradation of exhibits.
Disruption to the production of reports.
Lack of capacity in the remaining market.
Loss of skills from the profession, especially among experienced staff.
Loss of corporate memory.
Disruptions to defence examinations in cases.
Increased turnaround times for forensic tests, in some cases delaying trials.
Tendering and Procurement: Police forces are essentially the sole customer for private providers, creating a monopsony where prices are driven down excessively.
Commoditized Procurement: This model has forced suppliers to compete heavily on price, sometimes leading to unsustainable levels.
Managed Service Procurement: Some police forces have adopted this model, contracting with a large provider for all their forensic science services for a fixed price, sometimes for up to 10 years. This can provide stability for the large provider but leaves little space for smaller, niche providers.
Terms and Conditions of Contracts: Private providers also struggle with contract terms, such as zero inflation clauses, which make it hard to maintain profitability while meeting increasing costs and accreditation needs.
Impact on Niche Providers: The procurement models have negatively impacted the ability of private providers to offer services in niche disciplines. Some specialisms are at risk of disappearing because they are no longer economically viable.