The UK’s financially troubled Forensic Science Service is shutting down, with its sensitive work set to be taken on by the private sector, the coalition government announced today.

A government owned company since 2005, the FSS is currently losing £2 million per month and could run out of money by the New Year, according to Home Office minister James Brokenshire.

He says the “firm aim” is that there will be no state forensics agency by March 2012, with FSS wound down and as much of it as possible being sold off. Although there have been several suggestions in the past that the whole FSS could be privatised, its losses seem to have kyboshed this plan. Indeed, a recent National Audit Office report noted that increasing competition in the forensics market had driven down the value of FSS from £67 million in 2007/08 to “a nominal figure of £1,000” in 2008/09.

Brokenshire places the blame squarely on the shoulders of the previous Labour government, which he says failed to control costs and reform the service.

“We will ensure the orderly wind-down of FSS does not impact on police service customers or the wider criminal justice system,” he told the House of Commons.

“We know that there are real challenges ahead for FSS staff whose skills and contribution will be important as we move through the transition. We will be working hard with the company to ensure that staff are kept fully informed of developments.”

The FSS only provides forensic services to England and Wales. Its Scottish equivalent – the Scottish Police Services Authority forensic laboratories – are suffering job losses and being reformed but were recently saved from the axe.