Serco was meant to run London’s Community Payback scheme until 2016. The Government now says the contract will finish at the end of the year.
Labour accused ministers of “sneaking out the news”, after it was mentioned in the footnotes of an announcement last week.
A Ministry of Justice spokesman told the Standard that ministers wanted to overhaul all probation services nationally “to ensure a consistent approach.”
Serco and the London Probation Trust were awarded the four-year £37 million contract in 2012. Under the project, the firm supervised offenders on probation doing unpaid work in the community.
But concerns were raised when the BBC broadcast allegations — denied by Serco — that offenders were not properly supervised.
Labour’s justice spokesman Sadiq Khan said: “By sneaking out the news that Serco’s contract is to be brought to an end early, the Ministry of Justice is trying to hide their embarrassment that this contract signed on their watch has been a disaster.”
James Thorburn, Serco's Managing Director for Home Affairs said: "In London, we have delivered over a million hours of community payback, reduced costs to the taxpayer and delivered performance on certain key measures above the national average for Probation Trusts. We remain committed to maintaining these high standards over the coming months."