Coalition U-turn on private prisons will undo 20 years of real progress

Will Tanner
THE coalition’s pursuit of competition in healthcare may have grabbed the headlines, but it was the Ministry of Justice that had made the most headway. In 2011, its Competition Strategy set out a “guiding principle” that competition will apply to all services not bound to the public sector by statute. After two decades of limited competition, the message was clear: the vast majority of prisons, probation and rehabilitation services would be delivered by a range of providers – public, private and charitable – competing to deliver a better, cheaper service.

Sadly, it was not to be. Two years on, the Ministry of Justice has completed a U-turn far greater than the coalition’s retreat on extending competition in the NHS. At the end of 2012, ministers announced plans to overturn two decades of privately-run prisons in favour of a “new approach”. The role of companies will be limited to small contracts for rehabilitation and ancillary services, while the public sector will subjected to an “efficiency benchmark” instead. HMP Wolds, a privately-run prison, was handed back to the public sector, and the competition processes for three others were suspended.

But the evidence points towards the need for more competition, not less. New Reform analysis of Ministry of Justice figures shows that companies are better at running prisons than the public sector. Private prisons are more effective at preventing prisoners from committing crimes after they leave, and they perform better than comparable public sector institutions on most official performance measures. This is about cost as well as quality: the first prison to be transferred from the public sector to the private sector, HMP Birmingham, is being run £8m a year cheaper under its new management.

The innovations range from smart tweaks to cultural transformation. Companies have pioneered new technologies, like electronic cell locking to improve security, or self-service kiosks to give inmates a greater sense of responsibility in preparation for their release. Private sector ways of working have transformed an outdated employment culture and traditionally hostile staff-prisoner relations. In privately-run prisons, officers do not carry batons or have power of arrest, and managers can use flexible staffing arrangements to improve rehabilitation and meet prisons’ needs.

At Doncaster Prison, the private company Serco has used its business experience to drive partnerships with local charities and employers to prevent prisoners committing crimes when they leave the prison gates. Over 92 per cent of prisoners are released to suitable accommodation, while 23 per cent – double the national target – are released into employment or training. In 2011, Serco’s prison director at Doncaster John Biggin was named The Guardian’s Public Servant of the Year.

Better numbers are matched by academic evaluation: a major longitudinal study by Cambridge academics recently found that privately managed prisons had more positive staff-prisoner relationships, better internal prison cultures, and more satisfied workers.

The threat of competition has also made the public sector raise its game. In 2003, the National Audit Office found that “competition has been important within the prison system for improving both management and conditions for prisoners.” More recently, evidence of the positive impact of competition has come from an unlikely source: public sector prison managers. In 2011, a major survey of senior prison leaders found overwhelming recognition of the value of competition. One respondent said: “I don’t think the improvements we’ve seen in the Prison Service in delivery and outputs would have happened without the threat of privatisation, and without the reality of privatisation, because we wouldn’t have done it ourselves. There would’ve been no incentive.”

The government has argued that there has been no U-turn. Yet ministers’ own announcements make clear that competition will be limited to a small number of specific services. The prison workforce, which accounts for over 70 per cent of costs, will remain in the public sector, despite there being no statutory requirement for it to do so. It is bewildering that the government has backtracked on such a successful policy that commands cross-party support. There was no public uproar demanding a retreat from two decades of successful policy. Far from reaping the rewards of reform, ministers are throwing in the towel after the fight has been won.

Will Tanner is a senior researcher at the independent thinktank Reform.