The company went on to work for other government departments.One of the biggest challenges it faced was to change its culture from that of the public sector to the private. Of the 25,000 people Serco employs in the UK, around 15,000 were once employees of the state. “We inherited some brilliant people,” says Beeston, who is keen to avoid criticising the public sector “We just apply a management template. We do things like giving people entrepreneurial ability to make decisions, to actually go out and grow the business.”Since Serco floated in 1988, its growth rate has been almost 20 per cent a year, most of it funded by profits rather than by asking shareholders for extra cash. Such has been its success that the stock market now values the company at £1.3bn, a high figure when compared with last year’s profit of £46.4m. When the company made a rare fund-raising last week for £120m, the demand to invest was three times what it had room for.But this enthusiasm is in marked contrast to warnings coming out of the City that the Railtrack fiasco will reduce investment in public private partnerships, or PFI, in which Serco specialises.”The banking community is still very keen on PFI,” Beeston says.

He also denies that banks will now require more money to cover the perceived increase in risk. “I think, if anything, margins are coming down on PFI in banking terms.”Serco has shown demonstrable improvements in the public services it has taken on, says Beeston, pointing out that last year the DLR was voted National Rail Operator of the Year by Rail magazine.The company’s association with the National Physical Laboratory has also been a success story, he says. “It’s a classic case of an organisation that was run as a government department, and the budget was reduced in real terms year on year. That meant recruitment freezes, and the average age of scientists was increasing. Since we’ve taken over, we’ve developed third-party income streams, selling the facilities and expertise to other commercial customers, and the scientific staff have increased by about 100.”Serco runs such a diverse range of businesses that some analysts are concerned it’s doing too much.

“The question is whether they are spreading themselves too thin,” says Adrian Cattley, an analyst at Dresdner Kleinwort Wasserstein.Beeston admits there’s too much going on. “We have such a big pipeline of opportunities that what we’re trying to do is grow the business reasonably steadily and judiciously without biting off more than we can chew.”There are not many companies who can complain about having too much business. But as the Government has a yearly budget of roughly £400bn, it’s likely that Serco’s problem will only get worse.. If Pop Idol Will Young thinks he knows about selling new releases at record speeds, he could learn a few things from the video games market. Last Friday saw the UK launch of Metal Gear Solid 2, a game so eagerly anticipated that its opening weekend takings are on target to beat those of the Hollywood blockbuster Monsters Inc.Rarely has a game received so much hype. It is the sequel to a title that sold six million copies worldwide, and has been touted in the ultra-critical internet discussion forums as “quite simply the best game ever made”.
Since the game involves stealth, killing and industrial sabotage, that description will remain a matter of taste.

What is not in doubt is that Metal Gear Solid 2 is just about the best thing that could have happened to Sony this year. Continuing its theme of sabotage, the game, which can be played only on the PlayStation 2, has been timed to hit the shelves a few days before the grand release this Thursday of Microsoft’s Xbox.It is no coincidence that the video games industry is now able to make direct comparisons between itself and the rest of the entertainment world. The global market for video games has been growing by double-digit percentages since the early Nineties, and is facing an even sharper surge in value. The PlayStation 2, the Xbox and Nintendo’s GameCube, to be released in a couple of months, take the industry into a new era. By 2005, say analysts, the international video games market could be worth $40bn (£27bn), more than twice what it is today.Despite the almost guaranteed success of Metal Gear Solid 2, Microsoft believes it, too, has a game that deserves to be ranked among the greatest.