An inquiry has been launched into the conduct of one of Sussex’s biggest companies.

The Ministry of Justice has called in auditors to investigate whether they have been overcharged for electronic tags by two security firms including Crawley-based G4S.

Auditors PricewaterhouseCoopers are to investigate deals signed a deal in 2005 bringing £700 million worth of business for G4S and Serco to provide electronic tagging equipment to monitor the movements of criminals.

The two firms had their original contracts extended and are bidding on the new electronic tagging deals with the justice department expected later this year.

Analysts at City broker Cantor Fitzgerald have estimated the value of new services contracts for the justice ministry has jumped tenfold over four years.

Parliamentary answers revealed that the total amount paid to G4S and Serco for tagging services in 2011/12 was £116.9 million.

Unions say the costs could rise to more than £1bn by 2015. A report last year revealed that tagging cost around £13.14 per criminal per day in the UK compared to £1.22 in the US.

Justice Secretary Chris Grayling said the companies had promised to reimburse his department if errors had been made.

He added: "I take this issue very seriously and my priority is to ensure that taxpayers' money is spent appropriately and delivers value for money,".

Both firms defended their services and said they were co-operating fully with the audit.

G4S said its tagging contract has saved the UK taxpayer more than £2 billion, compared to the alternative cost of custody.

The firm, which was heavily criticised over its botched handling of its Olympics security contract, added that it had cut the cost of the service by 13% since 2005.

A G4S spokeswoman said: "We believe that we are delivering our electronic monitoring (EM) service in a completely open and transparent way.

"The EM service contracts have previously been audited by the National Audit Office, which concluded that our service offered 'good value for money to the taxpayer'."

The team is to report back on its findings within six weeks.