Prison Management: Contracting Out (Hansard, 19 June 1997)

§ The Parliamentary Under-Secretary of State, Home Office (Lord Williams of Mostyn)

The Government have expressed reservations about the principle of contracting out the management of prisons. It is generally accepted that responsibility for the incarceration of offenders must remain with the state. The issue is whether that responsibility should, as a matter of principle, be discharged through direct management in the public sector or whether it can properly and effectively be discharged under a regulatory framework. This was addressed in the recent report on prison management by the Home Affairs Select Committee: and the Government now wish to give further and careful consideration to the arguments deployed in that report before settling their overall approach to this issue.

Existing management contracts will be honoured, as my right honourable friend the Home Secretary has already made clear. But we are considering ways in which the current regulatory framework might be strengthened. At present, all disciplinary hearings in contractually managed prisons are conducted by a state official—the Controller, a Prison Service governor, who also monitors the performance of the contractor on behalf of the responsible Prison Service Area Manager. This is an important principle from which we will not depart: and we are currently reviewing the scope for 128WA extending the Controller's powers in respect of prisoners' requests and complaints, sentence calculation, scrutiny of security classifications and frequency of security audits.

On the letting of new contracts and the renewal of existing contracts, our immediate approach is necessarily determined by current expenditure plans, to which we are committed, and by operational requirements.

We have inherited a prison population rising sharply (well above projections) with expenditure provision for new prisons limited to establishments to be designed, constructed, managed and financed by the private sector. Even with the new prison ship, Her Majesty's Prison Weare, there is huge pressure on capacity. We have therefore decided to proceed with existing procurement plans to provide additional new places on this basis by 1999–2000. This is an urgent operational requirement to overcome projected shortfalls in accommodation and to avoid dangerous levels of overcrowding and the use of police cells. We will shortly be launching competitions to provide an 800-place Category B local prison at Agecroft, Salford, and a 400-place Young Offender Institution at Pucklechurch, near Bristol.

My right honourable friend has also authorised the renewal of the contract for the operation of Her Majesty's Prison Blakenhurst with the private sector operator, United Kingdom Detention Services. The existing contract expires on 25 May 1998; and we are required to give the operator one year's notice of a decision to renew the contract. The prison has been performing well against the current contract requirements and in comparison with comparable prisons in the public sector; and he is satisfied that the terms that have been negotiated for renewal of the contract offer value for money. The establishment could not be returned to public sector control without incurring additional expenditure, which would require offsetting savings elsewhere; and in the light of the current budgetary pressures on the Prison Service and pending our consideration of the Select Committee report, he is persuaded that no other course of action could be justified in current circumstances. However, in order to ensure that future options are kept as open as possible while our overall policy is under review, my right honourable friend has decided to renew the contract for three years only, the minimum practical—and contractually permissible—period.

Moreover, before further decisions are made on prison procurement beyond the extra places within existing plans or on the renewal of any other existing contracts, he has asked the Prison Service to:

(a) explore all possible methods of using private finance on terms which offer value for money including design, build and maintain new prisons with the public sector providing custodial services; and
(b) seek to demonstrate that the public sector Prison Service has the capacity to match the performance of the private sector in comparable prisons, and that realistic plans can be developed to establish a case for returning contractually WA129 managed prisons to the public sector on value for money grounds when consideration is given to the issue on the expiry of contracts. My right honourable friend has asked senior Prison Service managers to engage in consultations with the Prison Service unions to this end.

Proposals for private sector area involvement in other areas of the Prison Service which do not raise the same issues of principle will be treated on their merits. My right honourable friend has authorised the extension of the contract with Group 4 to operate the court escort and custody service in Area 7. This is essentially a specialist service, distinguishable from the management of prisons; and he is satisfied both with the quality of the service being provided and with the terms negotiated for extension of the contract.