The Forensic Science Service – which is headquartered in the West Midlands – is to be wound up as part of Government cuts.
Crime Prevention Minister James Brokenshire said action needed to be taken as the service was making operational losses of £2 million per month and was likely to run out of money by January.
The aim is that there will be “no continuing state interest in a forensics provider by March 2012”, Mr Brokenshire told MPs.
Mr Brokenshire said: “The current challenging forensics market has put the FSSback into serious financial difficulty.
“FSS is currently making operating losses of around £2 million per month.
“Its cash is due to run out as early as January next year.
“It is vital we take clear and decisive action to sort this out.”
In a written statement to MPs, he went on: “The police have advised us that their spend on external forensic suppliers will continue to fall over the next few years as forces seek to maximise efficiencies in this area. HMIC (Her Majesty’s Inspectorate of Constabulary) concur with this assessment.
“We have therefore decided to support the wind down of the FSS, transferring or selling off as much of its operations as possible.
“We will work with FSS management and staff, Acpo (Association of Chief Police Officers) and other suppliers to ensure an orderly transition but our firm ambition is that there will be no continuing state interest in a forensics provider by March 2012.”
The FSS is headquartered in Solihull and employs a total of about 1,650 staff and has been a Government-owned company since 2005, an FSS spokeswoman said.
She added the FSS was “disappointed” that concerns raised by providers have not been addressed by the Home Office and that the decision to close the service was “taken without the benefit of an independent market review”.
In a statement she said: “In response to the requirements of police customers, the company has been in the process of implementing a radical transformation programme over the last eighteen months, which is on track to deliver a reduced footprint and headcount, to improve efficiency and customer service.
“However, it has become clear that the commercial market for forensic science is evolving in a way which is unlikely to offer a profitable long term future for the FSS in its current configuration.
“Accelerated cost constraints facing police customers, together with an increase in police taking forensic work in house, have resulted in reductions in the volume of evidence submissions to the commercial market and it is unlikely that this trend will reverse.
“The FSS has been highlighting problems with the establishment and regulation of the market since its inception in 2005, particularly the lack of a level playing field for the regulation of quality standards.
“It is disappointed therefore that the concerns raised by many of the providers have not been addressed by the Home Office and that this decision has been taken without the benefit of an independent market review.
“The FSS remains committed to protecting the best interests of the criminal justice system and will continue to focus on continuity of service and protection of its world-leading scientific capability during the transition phase.”
Prospect, the union that represents more than 1,000 forensic scientists and other professionals within the FSS, said the decision would make a “mockery” of the criminal justice system.
Deputy general secretary Mike Clancy said: “Cost will now determine justice in the UK. The Government is putting its faith in an untested market to deliver forensic science at a time when it has never been more important to the detection of crime.
“Its actions will destroy a world-class body that is the envy of every police force in the world, in the name of saving a few million pounds.
“It is nothing short of astounding that this decision has been taken without any consultation with staff or stakeholders.”
Mr Clancy added that the break-up of the FSS would lead to an over-emphasis on profits and commercial relationships to the detriment of the quality of the science.
The union warned that national security was also threatened by today’s decision as the transfer of intelligence information, currently shared with agencies such as the anti-terrorist branch of the police and security services, would be impeded by the bodies that will take over FSS work.