Competition: a catalyst for change in the prison service

A decade of improvement

July 2003

ISBN 0-85201-571-2

Price: CBI members—£25

Non-members—£50

For further copies of this report,

please contact CBI Publication Sales

DL: +44 (0)20 7395 8071

E: pubsales@cbi.org.uk

W: www.cbi.org.uk/bookshop

© CBI

Copyright CBI. The content may not be

copied, distributed, reported or dealt with

in whole or in part without the prior

consent of the CBI.

This report has been written by

Gary Sturgess on behalf of the CBI’s Public

Services Strategy Board. Mr Sturgess is a

former Cabinet Secretary to the New South

Wales Government in Australia where he

worked extensively on public sector

reform. He is currently Executive Director,

Serco Institute.

4

Contents

Preface 6Executive summary 7

Issues for further consideration 9Section 1: Introduction 10

A brief history 10Competition and contestability 12

Sources of information 13Section 2: Value for money 14

On-time delivery of new prisons 14Shorter design and construction periods 14On-budget delivery of new prisons 15Cost savings 15

PFI Prisons 15Contract prisons 16

Total savings from contestability 18In summary 18

Section 3: Service improvements 19Comparative Analysis 19

Weighted scorecard 19Home office research 20Financial penalties 20

Attitudes 20What do prisoners think? 20What do prison reformers think? 21What do the prisons inspectorates think? 22What do the Boards of Visitors say? 24What do other external accreditation agencies think? 24

Service Improvements 24Re-offending 24Staff-prisoner relationships 24Time out of cell 25Purposeful activity 25Education 26

Safety and welfare 26Prisoner perceptions 26Assaults 26Bullying 26Self-harm 27Drug abuse 27Security 27Health care 28Resettlement 28

In summary 29

5

Contents

Section 4: How has competition delivered improvements? 30Contracting 30

Clarification of purpose 30Separation 31Higher standards 31Increased accountability 31Management space 32

Competition 33Innovation 33

Innovation 33Regime 33Culture 34Design and construction 35Technology 35

Competition 36A mandate for reform 36Benefits for the public sector 36

Better management 37Leadership 37People 37Prisoners 38Assets 38

Staff costs 38Productivity improvements 38Terms and conditions 39

In summary 40Section 5: Lessons learnt 41

Centralised procurement 41Full service contracting 41Sustainable markets 41Competitive neutrality 41Contracting for quality 42Contractual performance measures 42Prison Service performance measures 43Innovation 43Risk transfer 44Continuous improvement 44Collaboration 45The contestability model 45Exporting public services 45

Issues for further consideration 46Conclusion 47Footnotes 48

6

THIS REPORT IS the first in a series of CBI publications

describing the impact of public-private partnerships in the

UK over the past decade or more. While no-one would claim

that the development of PPPs has been without its

difficulties, it is clear from the evidence that competition

and contracting have brought significant benefits to the

reform of public services and are serving the public well.

In recent years there has been a great deal of criticism of

private sector involvement in the delivery of public services,

much of it ill-informed, much of it anecdotal. It is our hope

that we can bring some balance to this debate and encourage

a dialogue that is evidence-based rather than being driven

by ideology.

There is nothing in this document that attempts to

proselytise the view of ‘private good, public bad’. To the

contrary: in the custodial sector, in health, education and

transport, many of the best private sector managers have

been drawn from the public sector. The problem is not that

public sector managers are unable to turn around public

services, but that they often lack the incentives to innovate

and undertake the risks associated with reform. Al Gore

wrote that the problem with modern government is that we

have ‘good people trapped in bad systems.’ Contracting and

contestability transform those systems, setting good

managers and staff free to deliver better results.

This report demonstrates that alongside new investment,

the introduction of contestability and contracting into the

delivery of public services can, if structured appropriately

and delivered well, stand as one of the two pillars of public

service reform. It is frank about the challenges facing the

private sector as well as its successes. It does not seek to

excuse private sector failure where it exists. The quantitative

and qualitative evidence compiled in this report is an

attempt to inject into the debate over service improvement,

a more rational and evidenced-based assessment of the

benefits of contracting and contestability. The debate about

private sector involvement in the delivery of public services

will not be advanced by a clash between extreme or

ideological positions.

The UK experience with privately managed prisons

challenges the notion that private sector employees are

incapable of developing a public service ethos. In a number

of ways, privately managed prisons have delivered improved

standards of service and in a more humane way than many

publicly managed prisons. Jeremy Bentham, who wrote

extensively in the late eighteenth century about the merits

of prison contracting, made the point that well-written and

well-enforced contracts allow government to join duty with

interest, to harness the self-interest of the private sector to

serve public ends.1 That principle is as valid today as it was

two hundred years ago.

Preface

7

THIS REPORT BRINGS together, for the first time,

a significant body of independent research to provide a

comprehensive analysis of the value that competition in

the design, construction and operation of new prisons has

added to the UK custodial sector.

Since 1991 successive governments have introduced an

element of competition and contestability into prison

service management. As a result of this policy, around 7%

of prisons and 10% of inmates are now managed in

privately managed prisons. A decade of involvement has

delivered a decade of benefits.

Unlike other parts of the public sector where private firms

have been engaged only in supporting service delivery, the

private sector’s contribution to transforming prison services

has gone beyond traditional facilities management and

infrastructure support: it has taken on and delivered core

public service goals. In the context of the broader public

policy debate about the benefits of contestability and diversity

in the reform of public services, this report should provide

ministers and advisers with a number of important insights.

A decade of improvement

The underlying driver in the award of the first prison contract

(at HMP Wolds in 1991) was an expectation of service

innovation rather than the pursuit of financial savings.

The fact that the winning bid was substantially less than the

Prison Service benchmark came as a ‘pleasant surprise’.

Service improvements

In general, privately managed prisons are delivering good

quality services and in some cases services that are

significantly better than in publicly managed prisons.

The Chief Inspector of Prisons described one privately

managed prison as a jewel in the crown of the prison service.

However, new prisons have experienced some difficulties in

their early stages and one privately managed prison has

recently been severely criticised by the prisons inspectorate.

Comparative analysis indicates that they perform better in

terms of escapes, time out of cell and hours of purposeful

activity. Privately managed prisons have also brought about a

revolution in the decency of staff-prisoner relationships. This is

reflected in prisoner surveys and in the reports of the prisons

inspectorates. However, assault rates have on average been

higher, albeit falling over time. Other results have been mixed,

but with the prisons inspectorates pointing to numerous

examples of best practice in the privately managed prisons.

Value for money

The introduction of PFI has resulted in new prisons being

completed on time and on budget. Construction times

under PFI have fallen by more than 40% and cost savings

appear to be more than 20%. Competition is currently

saving the taxpayer £40m to £60m a year and between

£200m and £260m over the period 1991 to 2002 – equivalent

to 20 new secondary schools or three new general hospitals.

How were these improvements achieved?

It has long been understood that public versus private matters,

but competition versus monopoly matters a great deal more.

Actually, from government’s perspective, there are two

disciplines involved: competition and contracting. While

they are often associated, each does slightly different work.

Contracting

The discipline of writing, negotiating and managing a

contract creates a number of benefits:

Executivesummary

8

Competition: a catalyst for change in the prison service

■ Focusing government’s attention on the desired outcomes

■ Removing conflicts of interest and enabling both parties

to concentrate on their contribution

■ The introduction of higher standards and increased

accountability

■ Liberating management from bureaucratic constraints.

Competition

Competitive tendering brings a number of different

management teams to focus on service improvement,

motivated by the pressure of competition. It creates a

powerful incentive for innovation and gives the winning team

a mandate for change, even when the in-house team wins.

The challenge of a competitive environment has also provided

a stimulus for change within the rest of the Prison Service.

Innovation

The threat of competition has encouraged significant

innovation in prisoner management regimes, organisational

culture, design and construction and technology. The

contract for the management of HMP Wolds in 1991 was

groundbreaking in the introduction of a more liberal and

more structured regime, such as the requirement that all

prisoners be provided with 15 hours out of cell each day.

Innovative designs and the use of CCTV cameras and

magnetic keys have helped reduce staffing numbers.

Staffing

The introduction of private sector management into the

Prison Service has led to a revolution in the management of

prison staff. The private sector has introduced flatter, leaner

management structures and recruited most of its staff from

local communities, many of whom have not previously

worked in custodial services. Competition has led to

significant improvements in productivity, with reduced

sickness leave, and a younger and more mobile workforce.

As a result, staffing costs have been significantly lower in

the privately managed prisons.

Lessons learnt

A number of lessons have been learnt that are relevant to

the Home Office (as the department responsible for the

Prison Service), but also to other government departments

and agencies seeking to develop public-private partnerships.

Key lessons include:

Full service contracting

Compared with some other PPPs, PFI prisons involve the

full range of services, with no separation of core and

ancillary services. A number of integration efficiencies are

identified in this report, supporting the conclusion that

marginalising the private sector in public service delivery

deprives government of opportunities for greater efficiency

and innovation in core service delivery.

Sustainable markets

Encouraging progressive companies to invest in the UK

custodial sector is dependent on the existence of sustainable

market opportunities. Companies make investment

decisions on the basis of the potential market growth over

the medium to long term. Where companies face the

prospect of repeat business they will also be much more

concerned about reputation and performance.

Competitive neutrality

The recent establishment of the Commission for

Correctional Services in the Home Office has ended the

conflict of interest where HM Prison Service was both

‘poacher’ and ‘gamekeeper’. However, concerns remain

about the competitive advantage of the Prison Service in

market-testing and the lack of comparable benchmarks and

accountability arrangements between the two sectors.

Contracting for quality

Government needs to recognise the wider implications of

procurement processes that use price as the dominant

criterion in evaluating successful bids. As the creator and

regulator of supply markets in the provision of public

services, the Commission for Correctional Services has a

significant influence on the quality of the market and the

factors that drive the market. If, for example, government

takes the view that terms and conditions in some parts of the

custodial sector are undesirable in light of broader workforce

policy issues, then the Commission must ensure that

procurement processes are amended to take this into account.

Contractual performance measures

There continues to be a number of deficiencies in contract

performance regimes. In some cases performance measures

focus on inputs rather than outcomes, some are out of touch

with current correctional policy and in other cases they have

had unintended consequences. The structure of many of

these performance regimes means that companies can only

ever fail – there is no recognition of exceptional performance,

well in excess of the contractual targets. Fundamental

changes to these performance regimes should only be

undertaken in co-operation with the management

companies, since they involve changes to the risk profile

of the negotiated contract.

Unco-ordinated inspection and audit regimes

When coupled with contractual performance regimes,

the introduction of multiple layers of measurement and

9

Competition: a catalyst for change in the prison service

Contracting for social outcomes: Without significantly

constraining the scope for innovation and ongoing

productivity gains, the Commission for Correctional

Services must resolve its priorities in terms of social

outcomes, including acceptable terms and conditions for

staff. The Commission should consult with the custodial

services sector as to how balance these various considerations.

Overlap and duplication in performance assessment:The multiplication of performance assessment regimes is

a challenge for all providers of custodial services, public

and private. Privately managed prisons have an additional

concern because of potential inconsistency with their

contractual performance measures. The complexity of

these various requirements and their assumption of

traditional management practices have the potential to

constrain innovation. Any resolution of these conflicts

must be undertaken at a strategic level and in close

consultation with the management companies.

Refreshing contractual terms: It is increasingly common

for contracts to be written for periods of up to 25 years.

Over this period, it is to be expected that there will be

several cycles of change in the underlying corrections policy

framework. The Commission for Correctional Services

must actively engage the management companies in finding

practical means of refreshing contractual terms to take

into account fundamental economic and policy changes.

Quasi-contracts for publicly-managed prisons: In spite

of significant improvements in recent years, the

Commission for Correctional Services could improve

the accountability of publicly managed prisons by

introducing a tighter quasi-contractual model, with

similar standards to the privately managed prisons and

comparable accountability arrangements.

Market-testing failing prisons: An important element

of a quasi-contractual model lies in early and credible

intervention in failing prisons. The Commission must

understand and address the management companies’

concerns about competing for failing prisons.

Competitive neutrality: Prior to future competitions

between the management companies and the Prison

Service, it will be important for the Commission to

address the competitive advantages and disadvantages

of the Prison Service.

Export of public services: The UK model for privately

managed custodial services is already being exported

into overseas countries, with potential future benefits

for UK correctional services in research and development

and the transfer of best practice. The Department of

Trade and Industry could assist the custodial services

sector in establishing domestic policy settings favourable

to the export of these services.

Issues for further consideration

inspection in the Prison Service is threatening to drown

privately managed prisons in a ‘deluge of paperwork’.

The Prison Service appears to be unaware of the impact

that detailed instructions based on traditional methods of

custodial management can have in stifling innovation.

Continuous improvement

Attitudes about best practice in correctional policy change

over time and if the privately managed prisons are to remain

relevant there must be scope for adjustment of contractual

terms. Effective processes must be created to enable

contracts to be refreshed throughout their lives, particularly

in the case of PFI prisons that can have contractual terms of

up to 25 years.

The contestability model

The government’s intention to use the private sector to

tackle failing prisons has significant implications for the

development of a sustainable private sector market. The

private sector is not content to be used as a ‘bogey-man’ for

failing public sector services: it has the potential to strain

relations between the public and private sector elements of

the Prison Service. Given the failure of the Prison Service to

attract a single bidder for the management of HMP Brixton

when it was deemed a ‘failing’ prison, the Commission for

Correctional Services needs to engage in dialogue with the

management companies about the implications of this policy.

Exporting public services

Over the past 11 years a distinctly UK model of privately

managed custodial services has emerged. Prison

management services in the UK are among the best in the

world and there are those who would argue that the

government has handled the development of a private

custodial services sector better than any other government

in the world. Some of these companies are now earning

export income by transferring best practice in custodial

services into countries overseas. There are also important

benefits for the prison services of England, Scotland and

Wales, both in spreading the costs of research and

development and in importing best practice from around

the world back into the United Kingdom.

10

It is generally acknowledged that the private management of

custodial services in the United Kingdom has been a success,

both in terms of value-for-money savings and service

innovation. The Institute for Public Policy Research (IPPR),

a centre-left think-tank, accepted the findings of the

National Audit Office (NAO) that the Private Finance

Initiative ‘...appears to be achieving efficiency gains in some

prison and road projects.’

In January this year, the NAO reported that ‘...the Prison

Service has also benefited from the Private Finance Initiative

(PFI). All seven PFI prisons were ready for use at or before the

date required by the contract’. In May 1998, the then Home

Secretary, Jack Straw, told the Prison Officers’ Association

(POA) at its annual conference that the new Labour

government was abandoning its previous opposition to

privately managed prisons – saying ‘There is a significant

value for money gap between the costs of the public sector

prisons and those of the contracted out private sector prisons.’

These financial benefits to the taxpayer have not been

delivered at the price of security or service quality. Privately

managed prisons are not without their faults, but the IPPR

concluded that ‘The evidence suggests that the quality of

privately managed prisons – as measured by the Prison

Service’s Key Performance Indicators (KPI) – is similar to that

of publicly managed institutions.’ Indeed, the Prison

Inspectorates have delivered a number of very positive

reports. The Chief Inspector wrote of one privately managed

prison that it should be considered as a ‘jewel in the crown’

of the Prison Service.

The only significant disagreement has come from the unions

representing prison officers in the public sector prisons and

from some of the prison reform societies. There has been

much greater controversy in Scotland where there is, as yet,

only one privately managed prison, and in the United States,

which has a profoundly different model.

This report brings together, for the first time, the findings of

independent inspectors and researchers over the past eleven

years to document the introduction of contestability into

the custodial sector and the changes that it has brought to

prison management in England, Scotland and Wales.

It is timely, not only because of the government’s proposal

to use contestability to turn around the performance of

failing prisons, but also as a response to those who have

claimed that PPPs have failed to deliver. Privately managed

prisons are a challenge to those who claim that for-profit

companies are incapable of developing and delivering a

public service ethos. As documented below, the prison

management companies brought about a ‘decency

revolution’, a reform that the senior management of the

Prison Service had been struggling with for years.

A brief history

The United States pioneered the private management of

prisons in the early 1980s largely because of problems with

overcrowding. By the end of the decade the courts had ruled

that around 40 states were in breach of their constitutional

obligations because of overcrowding and poor conditions.

Private firms had been used to manage halfway houses since

the late 1960s, a small secure juvenile facility in Pennsylvania

had been contracted out in 1975 and a 400-bed juvenile

facility in Florida was contracted to a charitable foundation

in 1982. The first detention facility to be designed, built and

managed by a private firm was the Houston Processing

Centre in Texas, which was opened in April 1984.2 There are

now somewhere in excess of 150 privately managed prisons

in the US.

Section 1Introduction

11

Competition: a catalyst for change in the prison service

■ Stage one: Contract prisons – The first four prisons to be

competitively tendered were ‘management-only’ prisons,

with design and construction continuing to be

commissioned directly by the Prison Service. In each case,

the company recruited its own workforce from the local

community so that, to date, there have been no transfers

of prison staff from public to private employment. The

first contract was let in November 1991, with the prison

opening in April of the following year (see Exhibit 1).

The Prison Service was not permitted to bid against the

private sector in this first round of competitions.

However, each of these contracts has since been rebid.

HMP Blakenhurst and HMP Buckley Hall were won by

the Prison Service during re-competition and were taken

back in-house. Both HMP Wolds and HMP Doncaster

were re-won by the original contractors.

■ Stage two: PFI prisons – With an already overcrowded

system and the prison population continuing to grow

rapidly, the government decided in September 1993 that

all new prisons would be built using PFI. The enabling

legislation was passed in 1994. While in Opposition, the

Labour Party had opposed PFI prisons but in May 1998,

a year after being elected, the Home Secretary announced

that all new prisons would be open to private sector

competition. Eight new prisons have been constructed

through the PFI and two more are presently under

construction (see Exhibit 2).

Australia was the first overseas country to follow the

American example. In 1988, a review of correctional services

in the state of Queensland recommended that one prison be

contracted to the private sector to serve as a benchmark for

the rest of the prison estate. In December 1989, shortly

before the prison was due to open, there was a change of

government and in spite of previous opposition to prison

contracting the incoming Labour administration honoured

the contract. Over the next two years the new government

contracted with various community groups for the

provision of halfway houses and facilities for young

offenders. In the middle of 1991 when negotiations with the

Prison Officers Association broke down, the government

turned to the private sector to deliver a second prison. In the

meantime, the state of New South Wales had contracted out

the design, construction and management of a prison and

since that time most other states have followed suit.

In the UK, the private sector first seems to have been used in

managing the detention of illegal immigrants in the 1960s,

and private security firms were used at UK international

airports, including the long-stay detention centre at

Harmondsworth, from the 1970s. Following a visit to the

US in 1987, a House of Commons Select Committee

recommended that the management and construction of new

prisons should be opened to competitive tender. The focus at

that time was on remand centres because of the rapid rise in

the remand population during the 1980s. In March 1989, the

government announced that private management was feasible

in practice and acceptable in principle. Amendments to the

Criminal Justice Act were passed in 1991 to enable this change

to take place. Development of privately managed prisons

progressed in three stages:

Prison Location Contract award Opened Contractor Certified Normal

Accommodation (CNA)

Wolds Brough, Nov 1991 April 1992 Group 4 360

near Hull & Sep 2002

Blakenhurst Rochdale 1993 May 1993 UKDS 649

Worcestershire

Doncaster South Yorkshire Feb 1994 June 1994 Premier 771

& Aug 2000

Buckley Hall Greater 1994 July 1995 Group 4 350

Manchester

Exhibit 1: Management-only prisons in the UK

source—HM Prison Service

12

Competition: a catalyst for change in the prison service

■ Stage three: Intervention – In July 2000, following a

critical report from the Chief Inspector of Prisons on

HMP Brixton, the government announced that it was

prepared to use contestability to turn around failing

prisons. The then Prisons Minister, Paul Boateng, told the

press that, “People must shape up or ship out. For too long

there has been a willingness to tolerate failure in the Prison

Service.”3 Competition for the management of Brixton

prison commenced in 2001, but no private company

was prepared to bid. In part this was because of disquiet

about the state of the physical facilities and the regime

being operated, but there may also have been concerns

about the challenges involved in taking over the

existing workforce.

In the Comprehensive Spending Review in July 2002,

the government formally announced a policy of

market-testing failing prisons. Liverpool and Dartmoor

prisons have been both been named as poorly-performing

and given six months to improve or face market-testing.

It is understood that two more poorly-performing prisons

are shortly to be named.

Competition and contestability

There are ten prisons presently managed by the private

sector out of 152 establishments across England, Scotland

and Wales (or less than 7%). Since they tend to be larger

than the average prison establishment, together the privately

managed prisons account for around 10% of the total

prison population.

It is inaccurate to say that the UK has developed a market

for custodial services. The management companies bid

against one another in competitive tenders during the

procurement process but in between these bids (which take

place at the rate of about one a year), they collaborate with

the Prison Service as part of the wider prison network.

This report is concerned with competition and contestability

and not with privatisation. Since 1991, sixteen prisons –

old and new – have been opened up to competition from

the private sector in England, Scotland and Wales, some of

them several times. Six of these prisons (two old and four

new) were management contracts, and after being opened

to competition, four of them are now managed by the

public sector.

Prison Location Contract award Opened Contractor Certified Normal

Accommodation (CNA)

Parc Bridgend, Jan 1996 Nov 1997 Securicor + 800

South Wales Costain/Atkins/Skanska

Altcourse Fazakerley, Dec 1995 Dec 1997 Group 4 + Carillion 600

Merseyside

Lowdham Grange Nottingham Nov 1996 Feb 1998 Premier + Skanska 500

Kilmarnock Kilmarnock, Nov 1997 Mar 1999 Premier + Skanska 500

near Glasgow

Ashfield Pucklechurch, June 1998 Nov 1999 Premier + Skanska 400

near Bristol

Forest Bank Salford, July 1998 Jan 2000 UKDS + 800

Gr. Manchester Tilbury Douglas

Rye Hill Onley, July 1999 Jan 2001 Group 4 + Carillion 600

near Rugby

Dovegate Marchington, Sept 1999 July 2001 Premier + kanska 800 (incl. 200

nr. Uttoxeter therapeutic places)

Ashford South West Dec 2001 Not completed UKDS + Interserve 450 (females)

London

Peterborough Cambridgeshire Dec 2001 Not completed UKDS + Interserve 840 (480 males &

360 females)

Exhibit 2: pfi prisons in the UK

source—HM Prison Service

Sources of information

13

Competition: a catalyst for change in the prison service

The other ten were designed, built, financed, owned and

operated by private sector firms after competitive tendering

using the PFI. In these cases, no tender from the Prison

Service was permitted, although tenders were assessed

against a ‘public sector comparator’, the estimated cost of

delivering the prison through traditional procurement.

This absence of competition from the Prison Service was a

matter of government policy and not something that was

requested by the private sector.

While the term ‘contestability’ is often used as a substitute

for ‘competition’, in economic theory it is a different

concept. Twenty years ago, the American economist William

Baumol recognised that monopoly providers do not need to

be exposed to actual competition to behave in a competitive

way. The mere threat of competition is sufficient, as long as

that threat is real. The key determinant of contestability is

whether market entry costs are low.

It appears that the government’s intervention model is

concerned with contestability: it wishes to create the credible

threat of competition in order to encourage public sector

prisons to improve their performance. This policy

demonstrates that the policy imperative underlying the

reform of the Prison Service is competition and

contestability, rather than private sector involvement per se.

However, the government may not have yet reduced the

perceived barriers to market entry sufficiently for the threat

of contestability to be effective.

This report brings together for the first time a significant

body of independent research that has been undertaken

over the past decade or more.

Information about the performance of the privately

managed prisons comes from a number of sources. Her

Majesty’s Prison Service (covering England and Wales)

and the Scottish Prison Service publish a significant body

of comparative data internally and in their annual reports.

The separate Prisons Inspectorates undertake frequent

inspections of publicly and privately managed prisons.

For the most part their findings are publicly released.

Some insights can also be obtained from the reports of

the Boards of Visitors (or Visiting Committees in

Scotland) assigned to each prison, although not many of

these reports have been made publicly available.

The National Audit Office has undertaken a number of

studies of PFI and several of these provide useful

information on the performance of privately managed

prisons. There has also been the occasional consultant’s

report commissioned by a government department, which

throws further light on the relative performance of public

and private sectors. The other body of independent

research is to be found in studies undertaken by the

Home Office and various academic institutions. Reference

is also made in several places to research undertaken by a

senior Prison Service Governor, Stephen Pryor, who

undertook a study during 2001 on the impact of

imprisonment on prisoners’ sense of responsibility.

In all cases, this report has drawn on the highest quality

research that is publicly available. It is acknowledged that

in some cases this research is fragmentary and in other

cases it is some years out of date. While policy analysts

always wish for more, it must be acknowledged that a

significant body of material is now available.

This report avoids the use of the term ‘private prisons’

since all prisons remain under the direction of the Prison

Service. The generic term ‘privately managed prisons’ is

used to cover all categories of prison where the private

sector has a role in custodial services. Management-only

prisons are referred to as ‘contract prisons’, while those

provided under PFI are referred to as ‘PFI prisons’.

14

Public administrators have always grappled with the

challenge of delivering more (and better) for less. This has

been especially true of custodial services since, as the

popular saying goes, ‘there are no votes in prisons’. From

the writings of Jeremy Bentham in the late 18th century,

through the series of investigations into the costs and

benefits of convict transportation, to more recent inquiries

into income generation, the public has always wanted

economy from its prisons.

In that context, competition and contracting are old

concepts that have been revived over the past fifteen years.

There is widespread agreement that they have delivered

significant value-for-money improvements in the custodial

sector. In recent years, the only arguments to the contrary

have come from those who have either misunderstood the

financial analysis associated with PFI or those who have

failed to read the notes attached to the comparative data

provided in the annual reports of HM Prison Service.

On-time delivery of new prisons

In January 2003, the NAO reported on the success of PFI

in ensuring that major construction projects were delivered

on-time and on-budget:

Concerning prisons, the Prison Service has also experienced

good results from the PFI. All seven PFI prisons were ready

for use at or before the date required by the contract.

No prisons have been procured by a non-PFI route in the

last ten years, so there is no recent comparative data.4

HMP Parc was completed and able to take prisoners a

month early. HMP Altcourse opened five months ahead of

schedule, enabling the consortium to start earning revenue

much earlier than forecast. This was one of the factors that

contributed to the consortium’s ability to refinance the

prison and generate substantial early profits.5

In contrast, a study of seven traditionally-built prisons

undertaken by the NAO in 1994, revealed that not one was

completed on time. Construction overruns averaged four

months or 13%, ranging from three weeks to one year6

(Exhibit 3).

Shorter design and construction periods

Construction times have fallen significantly under PFI.

In 1997, the National Audit Office reported a 45% drop in

delivery times for new prisons following the introduction

of the PFI. The average time from the date of design brief

to opening for the seven traditional traditionally procured

prisons had been 75 months. The comparable time for the

first two PFI prisons was 40 and 41 months and for the third

it was scheduled to be significantly less than that again.7

Comparable statistics for the later PFI prisons (that is,

including the design period) are not available but

comparing the time from contract let to completion,

the average construction time for the seven PFI prisons

completed to date in England and Wales is 22 months,

compared with 36 months for the seven traditional-build

prisons listed by the NAO. This represents a reduction in

construction time of almost 40%.8

To some extent this fall in delivery times must reflect ongoing

improvements in the construction industry, but as section 4

indicates, PFI seems to provide powerful incentives to bring

best practice to prison construction. Procurement times also

tend to be somewhat slower under PFI, partly because of the

detailed negotiations that take place over the allocation of

risk. This suggests that some of the benefits from PFI come

from much greater care upfront in project definition.

Section 2Value for money

15

Competition: a catalyst for change in the prison service

On-budget delivery of new prisons

In the seven traditionally-procured prisons studied by the

NAO in 1993-94, actual construction expenditure exceeded

the estimated costs by more than 18%, although the amount

differed between projects. In a further 15 refurbishments of

existing prisons, the final price exceeded the contract price

by 10% or more. There is no information on whether cost

over-runs have ceased with the introduction of PFI, since

any additional costs are borne by the private sector and not

by government.9

Cost savings

The Prison Service publishes annual statistics, which include

the average cost per place and cost per prisoner for publicly

and privately managed prisons. These have been used by

critics to claim that privately managed prisons are more

expensive to manage.10 However, as the Prison Service itself

makes clear in the notes attached to these statistics, the

figures for PFI prisons and public prisons are not

comparable, since the former include capital and financing

costs which the latter do not.11 The two remaining contract

prisons, HMP Doncaster and HMP Wolds, are comparable

since their costs exclude capital repayments, and they are

amongst the lowest of the male local prisons. But, direct

comparability is only possible between prisons with similar

profiles and the tables in the annual reports of the Prison

Service are of limited value in this regard.

There is an unresolved issue associated with the allocation of

central overheads regarding the administration of the Prison

Service. It remains unclear which of these are associated

with the management of the prison system and which

should be allocated to individual prisons (including

privately managed prisons). The private sector has also been

denied the opportunity to capture scale economies by

delivering multiple prisons in the same locality.

From the data available, the introduction of PFI significantly

reduced the cost of delivering prison facilities and the costs

have continued to fall over time. The latest comparative data

on the operating costs of contract prisons are five years out

of date, but they also indicate that competition has

significantly reduced costs.

PFI prisons

The total cost of the first PFI prison, HMP Parc (1997), was

£266m (net present value). This represented a saving of 17%

above and beyond the estimated ‘efficient case’ costing for a

traditionally built but privately managed facility. When the

Prison Service selected the contractor for the second PFI

prison (HMP Altcourse) at around the same time, it decided

not to award the contract to the lowest bidder, in the

interests of building a more sustainable market. As a result

the saving was less than 1%. Overall, the savings on these

two prisons was still around 10%. (However, if both

contracts had been awarded to the same bidder, economies

of scale would have resulted in savings of 20% on HMP Parc

and 11% on HMP Altcourse.)12

PFI contracts do not distinguish between design,

construction, maintenance and operating costs, with the

consequent difficulty of determining where savings were

%0 20 40 60 80 100

Actual construction

Planned construction

Design

Lowdham Grange

Altcourse

Parc

Doncaster

High Down

Wolds

Lancaster Farms

Holme House

Woodhill

Bullingdon

Exhibit 3: Traditional and PFI prison procurement

note: Actual and planned construction times for PFI prisons are identical because they were delivered either on time or early.

source—National Audit Office: Control of Prison Building Projects, 1994

16

Competition: a catalyst for change in the prison service

generated. But, given that the public sector comparator

was built around the assumption of private management

(based on data from the four privately managed prisons to

that point in time), it might be concluded that a significant

proportion of the new savings came from more efficient

design and construction. A number of project managers

involved in prison PFIs, interviewed by the Construction

Industry Council in 1999, stated that construction costs

appeared to have been reduced by 10% to 15% as a result

of the PFI.13

According to Prison Service data, the third PFI prison, HMP

Lowdham Grange, was 17% cheaper than the ‘efficient case’

public sector comparator (but apparently based on public

sector construction and management). The cost of PFI

prisons continued to fall after Lowdham Grange. The Public

Accounts Committee of the House of Commons reported in

March 2001:

Since letting the first two PFI prison contracts, the present

value of the average annual cost of each prisoner place in five

subsequent PFI prison contracts had been between £9,850

and £12,100 compared with £16,467 for Fazakerley prison.

This average included a further PFI prison being opened by

Group 4 in 2001 (Rye Hill) where the cost per prisoner place

would be about 30% lower.14

The estimated cost savings at Kilmarnock are unknown but

in using the Kilmarnock experience to estimate the costs of

future Scottish prisons, PriceWaterhouseCoopers concluded

that PFI prisons would be less than half the cost of a

publicly built and publicly operated prison.15 In a

subsequent report by Justice Committee 1 of the Scottish

Parliament these savings were contested and the committee

referred to potential savings on an 800-place local prison in

the order of 28% (based on a report by Mouchel for HM

Prison Service).16

The Chief Inspector of Prisons for Scotland noted in his

2000 report that the cost per place in Kilmarnock was

almost one third of the cost of the nearest equivalent public

prison, but this failed to account for the fact that other

Scottish prisons were built some years ago:

We have been told that the average (net present value)

cost per available place for prisoner place at Kilmarnock is

approximately £11,000 per year, based on 1997 prices for

500 prisoner places. This figure however, is not directly

comparable with the SPS average cost per prisoner place

(CPPP), which is in the region of £28,000 per year. The

nearest equivalent prison is HMP Perth, where the annual

CPPP is in the region of £30,000.17

Research conducted by PriceWaterhouseCoopers on behalf

of the Scottish Prison Service in 2002 indicated that costs

per prisoner continued to fall through to 1998 (see Exhibit

4). From the recent debate, it would appear that some of

these savings came from further reductions in staffing ratios,

some of which were perhaps unsustainable. But financial

analysts involved in advising on these bids report that the

cost of finance also fell. The interest rate environment has

improved over this period, and the policy risks associated

with a new policy area have reduced significantly. Lending

margins and cover ratios have become more competitive

and equity returns have also fallen. These trends are evident

from the refinancing gains that the early PFI prison

companies were able to extract and which are now priced

into new bids.

Contract prisons

The Home Office did undertake comparisons of operating

costs of the four (originally three) contract prisons over the

five years to 1999, benchmarking each of them against two

or three publicly-managed prisons with similar profiles.

Over that five-year period, the contract prisons were

consistently cheaper (measured in terms of cost per

prisoner) than their public sector benchmarks, by 10% to

15% (see Exhibit 5).18

In comparing these prisons, the Home Office measured

operating costs against both the number of certified places

in use and the number of actual prisoners.19 The number

of prison places is reasonably stable and does not change

without major refurbishment, while the number of

prisoners has increased significantly in most prisons as a

result of overcrowding. The Home Office appears to have

taken the view that the marginal cost of an extra prisoner

is small, so that design capacity is the better measure of

efficiency. In other words, cost per place is a more reliable

indicator of relative efficiency than cost per prisoner. As the

researchers explained:

A prison that is running above its certified normal

accommodation level (due to overcrowding) will have a

lower cost per prisoner than comparable prisons, unless

costs rise in proportion to the population.20

The Home Office concluded that there had been a

convergence between private and public sector costs since

1994-95, and that ‘...the cost gap between contracted and

publicly managed prisons narrowed by almost 9% since

1996-97’.21

From 1995 there was a significant shift in the overcrowding

burden onto privately managed prisons when compared

with their public sector benchmarks. For example, HMP

17

Competition: a catalyst for change in the prison service

Doncaster had 771 places in use throughout this period, but

the actual number of prisoners rose from 757 to 1066. Thus

in 1998-99, cost per place was spreading the actual costs of

1066 prisoners over 771 places, whereas in 1994-95, it had

been spreading the costs of only 757 prisoners over that

same number of places. Given that from the outset, staffing

ratios in Doncaster (and other contract prisons) were

significantly lower than the publicly-managed prisons, it

would be unsurprising if additional staff were required and

cost per place at Doncaster rose significantly over this

period. If (as was indeed the case) overcrowding in the

comparator prisons was falling during this same period,

then the cost advantage of the contract prisons over their

comparators (measured as cost per place) would fall

significantly as a result.

One would expect that there would have been some scale

economies associated with overcrowding and yet the two

contract prisons with the biggest increases in overcrowding,

HMP Blakenhurst and HMP Doncaster, had larger

increases in cost per place and smaller falls in cost per

prisoner than the other two contract prisons. If there were

scale economies associated with overcrowding, they cannot

have been significant.

While the publicly managed prisons may have improved

their relative efficiency, it seems more likely that the decline

in the relative cost per place of the contract prisons was

caused by the impact of overcrowding on prisons that lacked

the spare capacity of the public system. In any case, the

Home Office found that in 1997-98, the staffing costs of

contract prisons were 33% lower per prisoner than the

benchmark prisons and 24% lower per place.22 Given that

labour costs make up such a large proportion of prison

operating costs, it is difficult to understand why the contract

prisons would not have maintained a significant lead over

their comparators.23

In short, the publicly managed prisons may have improved

their relative efficiency, but it was nothing like the 9%

claimed by the Home Office. It seems more likely that in

1998-99, the efficiency margin of the contract prisons was

still 10% or more. Such a margin would help to explain the

reversal of policy on privately managed prisons, which took

place shortly after the current government took office.

In May 1998, one year after the General Election, Home

Secretary Jack Straw, announced at the Prison Officers’

Association annual conference the results of several reviews

that had been promised prior to the General Election:

source: PriceWaterhouseCoopers, ‘Financial Review of Scottish Prison Service Estates Review’, 2002, p.27

Prison Contract date Cost per prisoner Average (£)

place per year (£)

Altcourse 12/95 19,540

Parc 01/96 16,068

Group average 17,804

Lowdham Grange 11/96 12,892

Kilmarnock 11/97 11,749

Ashfield 6/98 12,908

Group average 12,516

Forest Bank 07/98 10,412

Rye Hill 07/98 10,457

Dovegate 09/99 12,293

Group average 11,054

Overall average 13,290

exhibit 4: costs of pfi prisons (£)

In summary

18

Competition: a catalyst for change in the prison service

What the result of the first review shows is that there is a

significant value for money gap between the costs of the

public sector prisons and those of the contracted out private

sector prisons.24

Total savings from contestability

Regardless of whether or not the benchmark prisons did

improve their performance relative to the contract prisons,

costs have fallen in three publicly managed prisons as a result

of competition. When the Prison Service won the re-bid for

HMP Blakenhurst in 2001, its bid was 12% less than the

private sector incumbent. At the time, the Prisons Minister

attributed this to the pressure of competition.25 The savings

on the re-bid for HMP Buckley Hall appear to have been

somewhat less, but the former director general of the Prison

Service told a Parliamentary Committee in 2001 that the kind

of regime they were running at Buckley Hall would have been

inconceivable without the impetus of competition.26 The

Prison Service also acknowledged significant value-for-money

savings on the 1993 bid for Manchester prison.27

It is difficult to aggregate these savings because of the

limited information available, but taking a range of

estimates based on the available information as to cost

savings, taking overcrowding into account and treating the

construction costs of PFI prisons as an annual rental charge,

it is estimated that competition in prison management has

saved the taxpayer between £200m and £260m over the past

eleven years. That is the equivalent of constructing at least

three new general hospitals or 20 new secondary schools.

At present, competition in prison management is saving the

taxpayer between £40m and £60m a year, equivalent to the

annual cost of operating between two and three 800-place

local prisons.28

All new PFI prisons have been delivered on time or earlier

than scheduled compared with construction overruns

under traditional procurement averaging 13%.

Under PFI, prison construction times have fallen by

around 40%.

No PFI prison has cost the government more than

budgeted: by contrast, seven traditionally-procured

prisons finished in the early 1990s overran their

budgets by 18%.

Competition under PFI appears to be delivering savings

well in excess of 20%.

Competition for prison management delivered savings

of 10-15% on operating costs.

At present, competition in prison management is

saving the taxpayer £40m-£60m a year, equivalent to the

annual cost of operating two or three 800-place local

prisons.

cost per prisoner

cost per in-use place

% difference

0

5

10

15

20

25

98-9997-9896-9795-9694-95

Exhibit 5: Average operating cost of contract prisons relative to public sector comparators

source: Home Office

19

According to the NAO and the Public Accounts Committee

of the House of Commons, the underlying driver in

outsourcing HMP Wolds was not the pursuit of financial

savings but the desire for innovation. As the NAO expressed

it ‘The Home Office had not expected to make financial

savings from the private sector operation of Wolds; the main

objective was the injection of competition and new ideas.’

The fact that Group 4’s bid was substantially less than the

Prison Service benchmark came as a ‘pleasant surprise.’29

But what has been the outcome? Given that contestability

and competition have been clearly demonstrated to deliver

significant value for money for the taxpayer, have these cost

savings been at the expense of service quality? Is there any

evidence that contestability and competition have delivered

significant improvements?

The evidence to date indicates that savings have not been

delivered at the expense of safety, security or the decency of

the prison environment. There are differences in the way

that privately managed prisons deliver their services.

This results in different strengths and weaknesses, but the

evidence also shows that in general they are delivering good

quality services and in some cases, services that are

significantly better than in the publicly managed prisons.

This is not to say that the privately managed prisons are

without their failings: they have sometimes fallen short of

contractual ideals and suffered financial penalties as a result.

Where this has been the case it is clear that contracting is a

powerful tool for improved accountability and turning

around underperformance. There are no financial penalties

for the Prison Service when publicly managed prisons fail to

meet their targets. Significant improvements have occurred

in the publicly managed prisons, however, as a senior Prison

Service official has commented “It is not that good practice

doesn’t happen in public sector prisons, but it was consistent,

as far as we and the [Prisons] Inspectorate could tell, across the

private estate.”30

Comparative analysis

Weighted scorecard

HM Prison Service produces a ‘weighted scorecard’ each

quarter ranking the performance of 134 prisons in England

and Wales across a large number of performance indicators.

In the latest available weighted scorecard (for the three

months to December 2002), a privately managed prison

ranked first. Four of the nine privately managed prisons

demonstrated above average performance by being in the

top quartile. This was an improvement on the previous two

quarters, when three privately managed prisons were ranked

in the top quartile.

The weighted scorecard is still being developed and the way

in which individual prisons fluctuate in their performance

from quarter to quarter suggests that the weighting system

needs further refinement. There are also difficulties with

using the weighted scorecard to compare the performance of

the two sectors: performance indicators for each prison are

agreed with area managers and thus differ from region to

region, and because they have their own contractual

measures, not all the privately managed prisons have been

collecting and providing data against all of these indicators.

However, these results tend to confirm other information

which suggests that across the board, privately managed

prisons are performing exceptionally well.31

Section 3Service improvements

20

Competition: a catalyst for change in the prison service

Home Office research

For the five years to 1998/99 the Home Office collected

comparative statistics on the performance of the four

contract prisons (originally three) against a number of

indicators, and compared these with similar prisons within

the public system. It concluded that the contract prisons had:

■ Fewer escapes

■ Longer time out of cell

■ More hours of purposeful activity

■ Similar levels of mandatory drug tests.

In two of the prisons there were higher reported assault

rates. Two of the privately managed prisons had a worse

performance than their comparators in terms of the

percentage of positive drug tests, while the other two

performed somewhat better.32

Financial penalties

Some critics of privately managed prisons have drawn

attention to the financial penalties that have been levied on

the prison management companies as evidence of their

failure to meet all contractual targets.33

Exhibit 6 details the publicly available information about

the penalties that have been imposed since the first contract

prison was opened in 1992. While the data from 1998 to

2002 is complete, the available evidence prior to 1998 is

fragmentary.34

Financial penalties cannot be used to compare the

performance of privately and publicly managed prisons,

as the Prison Service does not impose such penalties on its

own prisons when they do not deliver on key performance

indicators (or other targets). These data cannot even be used

to measure the performance of one private prison against

another since prisons do not have the same profiles and

different contracts impose different performance regimes.

Because of the paucity of information, Exhibit 6 cannot be

used to comment on the performance of the privately

managed prisons over time, although the data seem to

support the conclusions that they are penalised more heavily

in their early years and that the performance regime has

become more stringent over time.

Nor do these financial penalties tell us much about the

quality of individual prisons. Over the three years 1998 to

2000, HMP Altcourse suffered penalties of £427,484, and yet

an inspection report published in November 1999 described

it as ‘...by some way, the best local prison that we have

inspected’. In part, this is because of the artificiality of

contractual performance measures, and partly because until

very recently, prison managers were given no credit for

exceeding their contractual targets. Under the early

performance regimes, the privately managed prisons could

never succeed. Even under the newer contracts, credits for

outstanding performance can be used to offset penalties, but

other than periodic inspection reports, no process exists to

identify and honour exceptional service.

Attitudes

What do prisoners think?

The decency of the privately managed prison environment

came as a surprise to the prison community. In 2001, on the

10th anniversary of the Woolf Report, a life sentence

prisoner wrote in The Guardian:

exhibit 6: Financial penalties on privately-managed prisons to 2002

Prison Year Penalties

Wolds 1999 £3,608

2000 £40,248

2001 £15,197

Blakenhurst 1994 £41,167

1998 £25,000

Doncaster 2001 £30,000

Buckley Hall 1997 £526

2000 £13,586

Parc 1998 £806,389

1999 £199,537

2000 £17,160

2001 £59

Altcourse 1998 £201,514

1999 £11,210

2000 £214,760

Lowdham Grange 1998 £45,782

1999 £6,334

2000 £11,865

2001 £5,703

Ashfield 2002 £350,308

Rye Hill 2002 £60,000

Dovegate 2002 £426,597

source—Hansard, 6 May 2003 and the Prisons Handbook 2002

21

Competition: a catalyst for change in the prison service

Many prisoners were sceptical about private prisons at first.

The morality of making profit from imprisonment seemed

questionable at best. But the message began to spread that

they were preferable to state-run prisons. A conversation with

a prison auxiliary helped me understand why. He had

transferred prisoners to a private prison. ‘You should see the

difference,’ he said. ‘As soon as the cons get out of the van,

they’re greeted with a “Good Morning, Mr Smith, would you

like to come this way?” They’re reminded that they’re people

first and prisoners second. Their whole demeanour changes.

They’re polite in return to the staff, and to each other.’ I had

to admit I had never been to a prison like that.35

Several prisoner surveys have included privately managed

prisons in their samples, providing us with some insights

into how they are viewed.

In 2001, researchers from the Cambridge Institute of

Criminology conducted interviews with 100 randomly

selected prisoners from one privately managed and four

publicly managed prisons, seeking to measure the quality

of prison life. The research was conducted on behalf of,

and was later published by, the Home Office. HMP

Doncaster, the privately managed prison, scored highest on

14 of 16 measures, with the greatest differences in respect,

humanity, relationships and trust. Alison Liebling and

Helen Arnold, “Measuring the quality of Prison Life”

Home Office Research, Development and Statical

Directorate, 2002 (see Exhibit 7).

These findings are consistent with an academic study

published in 1997 in relation to HMP Wolds, where 53

prisoners were interviewed, 84% of whom had previous

experience with prison life:

■ Nearly 80% of prisoners said that Wolds was better than

other prisons they had experienced and supported what

Group 4 was trying to achieve

■ 72% praised the living conditions at Wolds for the

amount of freedom it gave, the quality of relationships

with staff and the facilities available

■ 63% rated their relationships with staff as good or

very good

■ 74% thought staff were better than at other prisons,

attributing this to the respect they were shown and the

time that staff took to talk to prisoners

■ 53% were in favour of a private company running the

prison, with very few opposed.36

The researchers reported that some prisoners ‘...found

difficulty in adapting to the amount of freedom available to

them at Wolds, including the amount of time spent out of their

cells and expressed a sense of “culture shock” on their arrival.’

The Chief Inspector of Prisons made a similar comment

after he inspected HMP Wolds in 1998:

For a very few, the cultural change of being treated with

respect, and as a fellow human being, expected to conform to

the responsibilities that keeping to a compact involves, is a

step too far, particularly for those with long histories of

imprisonment, who are happier within the narrow tramlines of

institutional regimes. They tend to retreat behind their doors,

and a few ask to be ‘shipped out’.37

What do prison reformers think?

The Howard League has been reluctant to acknowledge the

benefits that the privately managed prisons have brought.

score (1-5)

2.4

2.6

2.8

3.0

3.2

3.4

3.6Doncaster

Risley

Holme House

Wandsworth

Belmarsh

TrustRelationshipsSupportHumanityRespect

Dimension

exhibit 7: Relationships dimension scores

source—Home Office

22

Competition: a catalyst for change in the prison service

The organisation’s director wrote last year that:

The suicide rate inside the private prisons has been broadly

the same as similar state prisons, the radical experiments in

state prisons involving all day visits for families have not

been replicated by the commercial companies and the best

innovation they can boast is that in some prisons staff and

inmates eat together.38

In a statement issued at the same time, the director said

that “At best the commercialisation of prisons has been a

distraction, at worst it might have contributed to the increase

in prison numbers. The Howard League seriously doubts that

the privately managed prisons have had any significant

influence on improving the daily life inside prisons.”39

The Prison Reform Trust says that it is ‘...opposed in principle

to privately-run goals’ and throughout its many publications,

it has rarely celebrated the successes of the privately

managed prisons and fully reported their failings.

Nevertheless, it produced a considered report on HMP

Wolds in 1993, concluding, ‘We discovered many things which

were positive but others which were not.’40

However, privately managed prisons have impressed some

leading advocates of prison reform. Lord Woolf, who

chaired the landmark commission of inquiry into prisons

following the 1990 riot in Strangeways prison, told the

Prison Reform Trust in 2001 that the privately managed

prisons had acquitted themselves well.41

The Butler Trust is an independent charity, established in

1985 to celebrate the achievements of people working in the

prison system. It makes a number of major awards each year

and privately managed prisons have won several Butler Trust

Awards over the past decade. In 2002, for example, HMP

Kilmarnock was awarded for its work on HIV and hepatitis.

The Trust commented that ‘...the package of care provided

at Kilmarnock to prisoners with blood-borne disease is

groundbreaking within a custodial setting.’ The curriculum

manager at HMP Dovegate received an award for taking an

inexperienced group of staff and turning them into

‘Learning Support Assistants’ to promote learning among

prisoners.

Summit Arts, a firm working with Group 4 at HMP Wolds

won a Butler Trust award (and a BAFTA) in 1999 for

working with prisoners to produce the music for interactive

educational CDs for schools. In 2001, a staff member at

HMP Wolds received another Butler Trust Award for

education work with prisoners and their children.

What do the prisons inspectorates think?

The inspection reports by the Chief Inspectors of Prisons

regarding contract and PFI prisons have been very positive.

The most widely-reported comment was the one made in a

1999 report, that HMP Altcourse should be considered as a

‘jewel in the crown’ of the Prison Service. HMP Altcourse

was by no means alone in attracting favourable comments.

In his 1998 report the Chief Inspector concluded that HMP

Wolds was ‘...an outstanding example of good practice’.

He had been told that there were many in the Prison Service

who had been actively willing the prison to fail because of

their opposition to private sector involvement in public

services.

I have to report that, five years on, the undoubted success of

Wolds represents a threat not so much to the employment of

individuals within the Prison Service but to what many refer

to as the Prison Service ‘culture’ regarding the treatment and

conditions of prisoners. Many prisoners, with long experience

of time served in many public sector prisons over many years,

described to me and my team the cultural shock that they had

experienced, stepping out of the usual escort van bringing

them from court, into a spotlessly clean reception area, where

they were treated as human beings by firm, fair and friendly

staff. This staff style was evident not just in reception but

throughout the whole prison and I believe that it is a major

contributor to the remarkable absence of tension that one

experiences walking round, the low level of drugs, and the

general feeling that rehabilitation really is an achievable aim

for all except the most intransigent.42

When the Prisons Inspectorate conducted a brief inspection

at HMP Blakenhurst in 1998, it concluded:

Overall we found that Blakenhurst was a prison in good heart.

There was much positive work being carried out by

enthusiastic staff with the result that outcomes for prisoners

were of a high standard. Although we sometimes have to add

a pinch of salt to what prisoners tell us we felt there was

considerable justification for their view that ‘Blakenhurst was

the best prison we have ever been to.’ 43

When a full inspection was carried out in January 2001, the

Inspectorate reported that HMP Blakenhurst was still a good

prison, but the Chief Inspector commented that treatment

and conditions for prisoners had not progressed since the

last inspection and had in some respects declined.44 Shortly

thereafter, the prison was taken back in-house after the

Prison Service was successful in a rebid.

The Chief Inspector reported following his second visit to

HMP Doncaster in 1998 that:

23

Competition: a catalyst for change in the prison service

HMP & YOI Doncaster remains a good prison, affording good

value for the public money invested in it, and from which

many examples of good practice have been, and could be

transported into the Prison Service.45

By the time of the third report in 2001, HMP Doncaster had

been placed under considerable strain because of

overcrowding. The Inspectorate found it was still a good

prison but struggling to deal with the pressures of

overcrowding:

The many examples of good practice are a tribute in

particular to the sustained contribution of the Director,

who has been in charge of Doncaster since it opened.

In particular I must commend the continued high standard

of staff/prisoner relationships, based on the all-important

ethos of people treating each other with respect as

human beings.46

An inspection of HMP Buckley Hall in 2000, shortly before

it was taken back by the Prison Service following a re-bid,

concluded that it was ‘...a thoroughly good prison: In terms

of outcomes for prisoners, HMP Buckley Hall was

outperforming the majority of Prison Service establishments

fulfilling similar roles’.47

HMP Parc faced challenges in its early stages, partly because

of difficulties with new technology and partly because it was

quickly used to take the pressure of overcrowding off other

institutions throughout the prison estate. This created

significant challenges for a new and inexperienced team. A

short inspection in 2000 found significant improvement and

much to commend.48 A second unannounced inspection in

2002 found further improvement: HMP Parc was described

as ‘...a safe and respectful prison’.49

As noted above, when the Chief Inspector reported in 1999,

he delivered a glowing endorsement of HMP Altcourse as

the ‘jewel in the crown’ of the Prison Service:

HMP Altcourse is, by some way, the best local prison that we

have inspected...My team and I frequently had to pinch

ourselves and remember that the prison had only been open

for slightly less than two years...What we found, and what we

report upon, proves that all the outcomes that we look for in

terms of the treatment of and conditions for prisoners in local

prisons are possible, given the right degree of direction and

attitude...Altcourse is not the first prison that I have left with

a feeling of optimism, but never before have I listed 45

examples of Good Practice in a report.50

HMP Lowdham Grange was inspected less than two years

after it was commissioned. The Inspectorate recognised this

and reported that the prison was ‘...way ahead of what could

be reasonably expected to have been achieved within 20

months of opening’:

This is a very good report, all the more remarkable because of

what has been achieved in such a very short space of time.

The Director and his team are to be commended and

congratulated; they are well on the way to making Lowdham

Grange the best Category B training prison in the country.51

The Chief Inspector of Prisons for Scotland visited HMP

Kilmarnock in early 2000, only one year after it had been

opened. He recognised that this was unfair due to the

inevitable difficulties experienced in commissioning new

prisons, but the inspection had been brought forward

because of media focus on the prison, which the Chief

Inspector noted had been ‘...sometimes lurid and

ill-informed’. The Inspectorate concluded:

We found very few concerns of a statutory nature regarding

the day-to-day operation of HMP Kilmarnock. Overall, a most

promising start has been made, with much achieved in the

first year of operation, despite the fact that the vast majority

of staff had never previously worked in a prison. Great credit

is due to them...

A most noteworthy feature of this prison, which was

frequently remarked upon by prisoners, was the willing and

helpful approach adopted by the staff. Prisoners said they

were treated with more respect than they had been in other

prisons in Scotland. The refreshing ‘can do’ attitude and

commitment shown by staff impressed us.52

When an intermediate inspection was conducted in March

2002, a number of concerns were raised, including an

increase in the number of deaths in custody and continuing

difficulties with low staff numbers (although turnover rates

had fallen significantly).53

HMP & YOI Ashfield is the only privately-managed prison

to have received a negative inspection report. Indeed, the

Chief Inspector delivered a damning report in February

2003, describing it as ‘...failing, by some margin, to provide

a safe and decent environment for children, or to equip the

young people in it with the education, training and

resettlement opportunities that are supposed to be at the core

of their sentences’. The Inspectorate identified high staff

turnover as one of the major causes of the problems at

Ashfield, which was in turn linked to staff salaries:

‘Too many staff were new, young and with no custodial

or youth experience.’54

While the new Chief Inspector stated that this was the most

depressing report she had written since taking over the

position, by the time of the inspection, the Prison Service

24

Competition: a catalyst for change in the prison service

had already recognised the difficulties at Ashfield and

appointed an interim manager. In February 2003, weeks

after the release of the Chief Inspector’s report, the

rectification notice issued by the Prison Service was lifted,

reflecting the improvements that had already taken place.

A report on HMP Forest Bank in 2002, two and a half years

after the prison opened, concluded that:

Forest Bank was a very good local prison. The relationships

between staff and prisoners were extremely positive and we

found many examples of staff dealing sensitively and

appropriately with difficult prisoners. We were concerned

about the low staff-prisoner ratios on the main wings, but we

could find no examples of collusive or unsafe behaviour as a

consequence.55

None of these prisons is without its faults but what is clear

from these inspection reports is that the vast majority of

privately managed prisons have been delivering high quality

services and in a number of cases, setting new benchmarks

for the Prison Service as a whole.

What do the Boards of Visitors say?

Boards of Visitors in England and Wales are appointed for

each prison from within the local community, following a

long-standing tradition of civilian oversight of prisons.

Boards are to satisfy themselves as to the state of the prison

and the treatment of prisoners, reporting to the Governor

and Secretary of State where appropriate. They tend to see

themselves as representing the wider public, from whom

they are drawn.

Several reports of the Boards of Visitors on the privately

managed prisons are publicly available. In 2000 and 2001,

the Board of Visitors at HMP Wolds reported that the

prison had had a successful year, with very little to criticise

and much to praise. The report at HMP Altcourse in 2000

was much the same, with the Board echoing the Chief

Inspector’s comments about it being the ‘jewel in the crown’.

In contrast, the early reports on HMP & YOI Ashfield

expressed concerns about the high rate of staff shortages

and turnover and resultant difficulties, particularly in

meeting educational standards.56

What do other external accreditation agencies think?

HMP’s Wolds, Altcourse and Rye Hill have all achieved

Investors in People awards, HMP Rye Hill obtaining its

award within 12 months of opening. In 2000, HMP Wolds

was awarded a Charter Mark and a four-star British Safety

Council Safety Award. HMP Doncaster has also been

awarded a Charter Mark, and was awarded the Investors in

People award in 1998 and again in 2000. It was the first

privately managed prison in the world to receive the ISO

14001 environmental management system award. It has

twice achieved five-star status from the British Safety

Council, being awarded the Council’s ‘Sword of Honour’ in

1999. HMP Lowdham Grange also won a National Safety

Award in 2002 from the British Safety Council.

Service improvements

Re-offending

One of the most frequently asked questions about privately

managed prisons is their impact on re-offending rates. This

has been an ambition of prison contractors since Jeremy

Bentham first floated the idea in his late 18th century

writings on ‘Panopticon’. Only one privately-managed

prison, the therapeutic community at HMP Dovegate, has

been prepared to accept any amount of recidivism risk and

there are questions as to the extent to which the manager of

a local prison is capable of managing this risk under the

existing prison system. While better education and more

humane treatment must make a difference, in most cases,

prisoners are in a particular establishment too briefly for it

to have any significant influence.

The Scottish Executive responded to the criticism that the

privately managed prisons were not tackling recidivism as

well as the public prisons:

There is no evidence for this. Output in terms of whether

prisoners will re-offend again once they have served their

prison terms is difficult to relate to any single factor and

therefore one of the outputs of a prison system (other than

punishment and incapacitation through incarceration) is

difficult to gauge. A number of intermediate outputs have

therefore been adopted in many prison jurisdictions to

measure whether prisons are doing well or badly. Most of

these have to do with custody and order including purposeful

work, rehabilitation, good medical services etc. In this

respect, the SPS Board is clear that it has better hard data on

what is happening at Kilmarnock (measured by over 50

detailed performance outputs) than it does for the prisons it

manages itself.57

Staff-prisoner relationships

One professional has argued that, ‘...the 24-hour-a-day

treatment provided inmates by routine interactions with

line officers should be recognised as the primary and

most-influential treatment program offered by any prison.’58

It was this philosophy that informed the ‘direct supervision’

regime introduced by Group 4 at the first contract prison in

1991. Prisoners describe good staff-prisoner relationships as

those where they are treated with respect, where prison

officers talk to them, mix with them and are helpful.59

25

Competition: a catalyst for change in the prison service

Reading the reports of the Chief Inspectors of Prisons,

it is evident that the privately managed prisons brought

about a revolution, introducing a new level of decency into

staff-prisoner relations. While there were staff in the publicly

managed prisons who had wanted to break from the

confrontational culture of the past, it required the creation

of a new class of prison with a profoundly different

management regime to bring about a new and more

constructive culture.60 In a report on HMP Wolds in 1998,

the Chief Inspector noted:

Gone is any feeling of natural antagonism between prisoners

and staff, which colours the attitude of too many staff in too

many Prison Service Prisons. The whole atmosphere in Wolds,

created by staff/prisoner relationships which acknowledge

that control, and therefore safety, depends on mutual

cooperation and not confrontation, is tangible proof of what

such a caring attitude to the responsibilities that go with

being entrusted with the conduct of custody, can achieve.

What is more this is being achieved with a number of very

difficult and disruptive Category B prisoners, with bad records

from other prisons, which is living proof that the Prison

Service could learn from prisons such as Wolds, and apply

any lessons learned right across the Service. To be fair to staff

in the publicly-run part of the Prison Service, as we go around

we find many of them to be in full agreement with such an

attitude and approach, who are, at present, held captive by

those who persist in maintaining a confrontational approach,

as if every prisoner was their sworn and natural enemy. The

House of Commons Select Committee recognised the quality

of the treatment and conditions of prisoners in contract

prisons, in a recent report. I have reported on it in every

contract prison I have inspected. I hope therefore that its

obvious quality will be recognised and adopted as a civilised

method of exercising responsibilities to the public, aimed at

the prevention of re-offending.61

At HMP Altcourse, a questionnaire by the Prisons

Inspectorate revealed that ‘92% of prisoners said that they got

on “well or okay” with staff. Given the nature of the

population, which was generally transient, this statistic is

remarkable particularly when compared with other

establishments carrying out a similar role.’62

The prisoner survey conducted during the Kilmarnock

inspection produced similar findings, with 94% reporting

that staff treated them with respect on the wings and 88%

saying that they were treated with respect elsewhere in the

prison. The Prisons Inspectorate reported, ‘A number of

prisoners said they did not wish to “progress” on to SPS

establishments where wages are lower, conditions are generally

less attractive and families would be required to travel further

to visit them.’ There had been difficulties during start-up,

but ‘...the general view put forward in all groups [of prisoners]

was that by comparison to other prisons, standards at

Kilmarnock were much higher.’63

Time out of cell

The Prison Service’s contract with Group 4 for the

management of HMP Wolds Remand Prison was

groundbreaking in its requirement that all prisoners be

provided with 15 hours out-of-cell each day. This was

particularly challenging since most inmates were not

convicted and could not be required to work or undertake

other purposeful activity. Shortly thereafter, several public

sector prisons did take on a similar commitment, but at a

somewhat lower level. Indeed, the levels negotiated for the

subsequent contract prisons were also lower, although still

higher than their public sector comparators.64

The Home Office later confirmed that prisoners in privately

managed (but non-PFI) prisons spent more hours each day

out of their cells than their comparators. This research was

discontinued in 1999 and recent comparative data are not

available. But, it is likely that the privately managed prisons

have continued to outperform the publicly managed prisons

because time out of cell is a contractual requirement with

penalty clauses attached for underperformance. At HMP

Kilmarnock, for example, the Scottish Inspectorate reported

being impressed with the amount of time out-of-cell,

including 9.45pm lock-up, seven days a week. ‘This is

another item of best practice that we commend to other

SPS establishments.’65

In 2001, HM Inspectorate of Prisons commented on the

performance target imposed on HMP & YOI Ashfield of

providing 14 hours out of cell each day. In spite of major

difficulties with recruitment and staff turnover, it had

largely managed to meet this commitment. The Inspectorate

asked why Ashfield could achieve this with all its difficulties

when the publicly managed prisons could not.66

Purposeful activity

On average, privately managed prisons out-perform their

public sector counterparts in terms of the number of hours

prisoners spend each week in purposeful activity. Among the

40 male local prisons in England and Wales, the top three

prisons in 2001-02 (in terms of purposeful activity) were

privately managed (out of only five privately managed

prisons in this category). On average, the privately managed

prisons had outperformed the publicly managed prisons in

this way for several years and they had continued to improve

over time. In the other categories of prisons the privately

managed facilities performed at or above average.

26

Competition: a catalyst for change in the prison service

There is little comparative information available on the

number of hours that prisoners work. Comparisons are

made more difficult because of the different profiles of

different prisons. However, a 1998 survey on income

generation by the National Advisory Council for the Boards

of Visitors of England and Wales found that in local

establishments, the two prisons with the greatest number

of weekly hours in work were both privately managed.67

Education

Several privately managed prisons have received outstanding

reports from the Prisons Inspectorate in relation to

educational services. Comparative data are not readily

available.

However, surveys of prisoners in seven local prisons,

conducted by HM Inspectorate of Prisons during 2001-

2002, found that HMP Doncaster (the only privately

managed prison in the sample) had by far the largest

number of respondents engaged in education or training

(almost 80%, compared with an average of less than 50%).68

Safety and welfare

Prisoner perceptions

The Inspectorates of Prisons provide some comparative

data on prisoners’ perceptions of safety in their annual

reports based on surveys conducted in conjunction with

their inspections:

■ HMP Altcourse (1999), ‘...our survey of prisoners by

questionnaire revealed that 81% rarely or never felt unsafe

in the prison. This is a high percentage, particularly in a

local prison, and was a clear indication that a safe

environment had been created.’69

■ HMP Lowdham Grange (1999) – 94% reported that they

felt safe, described as ‘a remarkably high statistic’,

(although the Prisons Inspectorate warned about

complacency since long-term prisoners are not inclined

to admit to feeling unsafe)70

■ HMP Kilmarnock (2000) – 88% of respondents said that

they felt safe and 89% said they felt safer than in Scottish

Prison Service prisons. The Inspectorate reported that

they were initially surprised at this given the low staffing

levels but prisoners pointed to the strategic use of CCTV

cameras which gave them confidence71

■ HMP Doncaster (2001) – around 43% of prisoners

reported that they had felt unsafe in the prison. This was

the second lowest rating among the seven local prisons

surveyed that year72

■ HMP & YOI Ashfield (2002) – in spite of its difficulties,

a relatively low proportion of young people at Ashfield

reported feeling unsafe (less than 30%), one of the lowest

rates among the nine juvenile institutions surveyed that

year and well below the average for the group.73

Assaults

Some critics have argued that assault rates clearly

demonstrate that ‘...incarceration in a private prison is a risky

business.’74 But, the evidence shows a mixed picture. Home

Office research on the contract prisons from 1994/95 to

1998/99 found that two of these prisons had significantly

higher assault rates than their public sector comparators,

but the other two were generally the same.

Looking at more recent data, we find that among male local

prisons, the privately managed prisons have had higher

assault rates than average (Exhibit 8). However, with all but

one of the six privately managed local prisons in England

and Wales there was a downward trend over time and at a

much faster rate than the downward trend in male local

prisons overall. In the one prison that did not conform to

this pattern, HMP Parc, assault rates were below the national

average.

In the case of the two privately-managed Category B prisons

assault rates in HMP Rye Hill were higher than average in

2001-02 (although this was its first year of operations),

while HMP Lowdham Grange had been significantly below

the average for the past two years. The one Category C

prison, HMP Buckley Hall, was returned to the public sector

in 2000, but its assault rates had been around the average for

several years. HMP & YOI Ashfield has had assault rates

significantly higher than the average for its categories.

In part, these assault rates are higher because prisoners have

more time out of cell, but there is a widely-held view that

some of it arises from a stricter reporting regime. If this

were so, it would not be a reason to soften reporting

standards in the private sector, but rather to improve those

in the public sector. The management companies are

entitled to be reassured that reporting standards are the

same in both sectors.

Bullying

In his 1996-97 annual report the Chief Inspector of Prisons

referred to determined efforts being made by the Prison

Service to deal with bullying. He singled out HMP

Doncaster and a publicly managed prison, HMP Lancaster

Farms as good examples of how to set about tackling the

problem because the models they had developed had been

closely studied by other prisons.75 No comparative

information is publicly available on bullying, but the reports

27

Competition: a catalyst for change in the prison service

of the Prisons Inspectorates suggest that the story is mixed,

with some prisons performing well.

Unsurprisingly given its other findings, the Inspectorate’s

survey of young people at nine juvenile prisons in 2001-02

found that HMP & YOI Ashfield had the highest rate of

prisoners reporting that they had been bullied during their

first few days, although it was closely followed by one of the

public prisons.76 In spite of this, a surprisingly low

proportion of prisoners reported that they felt unsafe.

Self-harm

In general, the inspection reports on self-harm in privately

managed prisons have been very favourable. There was some

criticism over the self-harm rate in HMP Doncaster but no

one has claimed that this is a widespread problem associated

with privately managed prisons. The Chief Inspector of

Prisons has recognised HMP Doncaster’s work on risk

assessment and monitoring procedures as ‘models of good

practice’.77

It is often difficult to find a correlation between the

performance of the prison in the management of self-harm

and the numbers of deaths in custody. In HMP Kilmarnock,

the Inspectorate reported in 2000 that the prison had

worked hard to set up a well-organised anti-suicide strategy

and that it was in line with that operating in the Scottish

Prison Service.78 Yet in the year to March 2002, HMP

Kilmarnock had five deaths in custody, causing the Chief

Inspector to raise concerns.79

Drug abuse

The Prison Service annual reports indicate that the privately

managed prisons are performing well in tackling drug abuse.

Across the 40 male local prisons in England and Wales in

2001-02, four of the top ten were privately managed and the

only other privately managed prison, HMP Forest Bank, was

newly established and had improved its performance over

the first year of operations. The other privately managed

prisons did not perform as well against publicly managed

prisons in their various categories, although all were

improving over time.

Substance abuse is another area where it is difficult to

compare the performance of different prisons, since they are

drawing on very different catchments. HMP Buckley Hall

(when it was privately managed) and HMP Kilmarnock had

serious problems but the Prisons Inspectorates recognised

that both were drawing on populations with high levels of

drug abuse. In 2001-2002, HMP Kilmarnock’s underlying

rate (which takes into account drug use in the background

community) was close to the average for the entire Scottish

Prison Service.80

Security

Detailed statistics on escapes from publicly and privately

managed prisons are not published but there have been few

escapes from the privately managed prisons in recent years

and in some years, none at all. Data from the Home Office

studies on the four contract prisons (up to and including

1998/99) indicates that in most periods, escape rates were

below the averages for their comparator groups.

The Prison Service conducts security audits of publicly and

privately managed prisons, but these are also not publicly

available. But a study undertaken for the Prison Service in

2001 reported:

%

0

5

10

15

20Doncastert

Blakenhurst

Doncaster

Forest Bank

Wolds

Cat Av

Parc

01-Feb 0200/0199/0098/99

exhibit 8: Assault rates in male local prisons

source—HM Prison Service, Annual Reports

28

Competition: a catalyst for change in the prison service

In the last year [2000] security audits have been completed at

Doncaster and Altcourse, both privately run prisons. The

ratings were ‘superior’ at Doncaster and ‘acceptable’ at

Altcourse. Doncaster was the only local prison to receive a

superior rating, and last year 46% of all prisons failed to

reach the acceptable rating achieved by Altcourse.81

According to the Prisons Inspectorate, HMP Forest Bank

has also received a ‘good rating’ for security.82

Healthcare

The Prisons Inspectorates have identified several examples

of best practice among healthcare facilities at the privately

managed prisons. At HMP Altcourse in 1999, prisoners had

access to a level of healthcare equivalent to the NHS, which

the Inspectorate noted was unusual for the Prison Service.83

At HMP Kilmarnock, the Scottish Inspectorate said the

operation of the Health Centre was ‘...as impressive as any

we have seen in a Scottish prison.’84 At HMP Buckley Hall the

same year, the Chief Inspector commented that:

I have commented, unfavourably, on Health Care Centres, and

the delivery of Health Care, in almost every other prison in the

country. Buckley Hall is an example of what can be achieved,

given the right resources and direction. Furthermore, Health

Care is an active partner in one of the most comprehensive

drug treatment programmes that my team have come across

anywhere. It has also pioneered a unique Hepatitis C

programme rightly given a Butler Trust Award in December

1999, that really should be copied in other prisons.85

Resettlement

It is difficult to summarise the reports of the Inspectorates

in relation to resettlement and comparative data are

unavailable. But, some of the privately managed prisons

have undertaken innovative programmes that have attracted

favourable comment. Stephen Pryor noted that there were

many examples of private prisons creating jobs that

improved prisoner welfare, beyond those required under

their contracts.86

In 1997, HM Chief Inspector of Prisons commented on the

rules and regulations that constrained public sector prison

managers from pursuing innovative work opportunities for

prisoners. He wrote:

The real advantage of not being tied by these procedures is to

be seen in the contract prisons run by the private sector, who

are providing far more imaginative work, and paying more

meaningful wages as a result. This is a thoroughly

unfortunate situation because it means that, in this respect,

treatment, conditions and opportunity for prisoners in the

public sector will never be as good as those in the contracted

establishments. HMP Parc, for example, has negotiated a

contract with Mowlem to provide work from local firms, which

can lead to jobs after sentence. Under current arrangements

no public prison could afford to enter into such a contract.87

At HMP Buckley Hall, Group 4 developed a partnership

programme with the City of Manchester, local employers

and voluntary organisations to provide education, training

and work experience in the community. The Prisons

Inspectorate described the pilot programme as a model of

good practice worthy of transportation to other prisons in

other parts of the country. The housing advice programme

at Buckley Hall was also described as a model of its kind.88

HMP Altcourse became involved in a pilot project with

voluntary sector organisations in the Liverpool area to

provide a through-care service for young people involved

in substance abuse. The prison was seeking to support

offenders following their release. The Prisons Inspectorate

recommended that it be evaluated as a model for other

prisons.89

In summary

29

Competition: a catalyst for change in the prison service

On the weighted scorecard issued by HM Prison Service,

privately managed prisons are on average out-performing

the publicly managed prisons.

In the five years to 1998/99, the four contract prisons

had fewer escapes, longer time out of cell, more hours

of purposeful activity and similar levels of mandatory

drug tests.

Prisoner surveys have shown that some privately managed

prisons significantly out-perform their public sector

comparators in respect, humanity, trust and the quality

of staff-prisoner relationships.

While some prison reformers have persisted in their

opposition to privately managed prisons, Lord Woolf, who

conducted the 1991 commission of inquiry into prisons

following the Strangeways riots, has said that the

privately-managed prisons have acquitted themselves well.

The reports of the Prisons Inspectorates and the boards

of visitors have in general been very positive.

A number of the privately managed prisons have won

safety and service quality awards from external agencies.

Competition from the private sector stimulated a

revolution in the decency of staff-prisoner relationships.

In general, escape rates have been lower in the privately

managed prisons and several have received outstanding

results in their security audits.

Competition has resulted in a significant increase in the

amount of time prisoners spend out of their cells.

Privately managed prisons have out-performed the public

sector prisons in this regard.

Privately managed prisons also perform well in terms of

purposeful activity and several have received outstanding

reports on their education services.

Overwhelmingly, prisoners report feeling safer in privately

managed prisons. Assault rates have tended to be higher

but they are falling faster than average and are now much

closer to the norm.

In general, inspection reports on self-harm have been

favourable and some privately managed prisons, criticised

for their high suicide rates in the past, have been recognised

as having strategies that are models of good practice.

The most recent statistics indicate that among male local

prisons, the privately managed prisons are performing

much better than average on substance abuse. However,

other privately managed prisons have had mixed results,

although improving over time.

Comparisons of healthcare standards are difficult but a

number of examples of best practice have been identified

among the privately managed prisons.

Typically, the privately managed prisons have experienced

difficulties in the early stages of commissioning, resulting

in higher financial penalties at this stage. Many new

prisons experience such difficulties and it is unclear

whether they have been worse in the privately managed

prisons.

A number of privately managed prisons in recent times

have had difficulties with low staffing levels and high

turnover rates. From the outset the privately managed

prisons have pushed the boundary in their attempts to

bring down staffing levels, and as a result, they have

sometimes failed to meet their obligations.

30

For those unfamiliar with competitive tendering and

contracting there is often scepticism about value for money

and service delivery improvements. How are companies able

to deliver significant savings to government and pay their

shareholders a profit without compromising service quality?

How did contestability enable a new and more collaborative

culture to be introduced into prison management when

Prison Service managers had struggled for years? The

answers to these questions are important not only in

shaping the future policy regime for prison services but

also in the design of good procurement and contract

management practices elsewhere in government.

Ultimately the answers do not lie with the private sector

per se but with the competitive processes established by

government and in the success with which ongoing

contractual relationships are managed. It has long been

recognised by the students of competitive tendering and

contracting, that it is competition among existing or

potential providers (or, strictly, the credible threat of

competition) that makes the difference. The American

academic John D. Donahue concluded as long ago as 1989

that, ‘...public versus private matters, but competitive versus

non-competitive matters more.’90 The success of HM Prison

Service in winning the tenders for Manchester, Buckley Hall

and Blakenhurst is evidence that it is competition that

counts, not privatisation.

Some years ago, Professor Mick Ryan of the University of

Greenwich asked ‘Is there nothing that the private sector does

well that the state prison system cannot do equally well if it is

properly managed?’91 The answer is no. But one should not

draw the conclusion that publicly managed prisons could

match their private sector counterparts by recruiting better

managers or designing better internal systems. To the

contrary, the fact that the prison contractors have drawn so

heavily on the public sector to fill their senior posts, is

evidence that inferior management capability is not the

underlying problem. The important difference after 1991

was the incentive regime within which the privately

managed prisons were operating, the broader environment

that had been created through the introduction of

contestability.

Actually, from government’s perspective there are two

disciplines involved: competition and contracting. While

they are often associated, this is not inevitable. Each

discipline does different work and for that reason each needs

to be studied separately. Government might also benefit

from a more finely grained analysis of the way in which

successful private firms have undertaken their reforms.

Competition provides the incentive to innovate, but what

kinds of innovations have been introduced? If the private

sector has delivered better management, what lessons might

be learned by the public sector more broadly?

Contracting

Clarification of purpose

Exposing a service to competition and writing a contract

demands a detailed statement of requirement and this has

the effect of focussing government’s attention on the desired

outcomes, as well as the desired scale and scope of the

service in question. The Institute for Public Policy Research

recognised this in its 2001 report on public private

partnerships:

A major potential benefit of PPPs is that they can help

government to focus more clearly on the services people

want, rather than simply managing existing forms of service

delivery. . . public managers often comment that attempting

Section 4How has competition deliveredimprovements?

31

Competition: a catalyst for change in the prison service

to specify the nature of a planned service formally is a

challenging experience – forcing out in the open issues

which would otherwise remain hidden. This is an indication

that the commissioning process can prove a highly effective

way of concentrating minds on how to shape services to

improve outcomes.92

The prospect of competition sharpens the focus on service

design and improvements but the challenge of writing,

negotiating and enforcing a contract demands much greater

clarity of objectives, more explicit accountability measures

and stronger incentives to perform. The NAO observed that

that these incentives were even stronger with PFI:

In order to raise private finance for a long term PFI contract,

there has to be clarity for the funders over the nature of the

work to be undertaken. Construction companies considered

this had imposed a discipline on departments to think

through the scope of the projects and to develop clearer

output-based specifications. The improved specifications

reduced the need for post-contract variations to the work

required which had contributed to price increases in previous

public sector construction projects.93

Extended negotiations and improved specifications

sometimes contribute to somewhat longer procurement

times under PFI. Financial close on the recently-

commissioned Ashford and Peterborough prisons was

several months later than expected. But there have been

over-riding benefits in much shorter and much less costly

construction processes.

Separation

By definition, competition and contracting demand a strong

separation of decider and provider. This enables both the

purchaser and the provider to concentrate more clearly on

their particular obligations and the resulting tension delivers

better accountability as well as better performance. This is

implicit in the contracting model, whether or not there has

also been competition. In HM Prison Service, the benefits of

a clear separation of decider and provider have only recently

been recognised, with the creation of the Commission for

Correctional Services in the Home Office.

From the perspective of the prison manager, this separation

results in much greater clarity of outcomes. When asked at

a seminar in 2001 how private managers handled prisoner

responsibility differently, the director of HMP Doncaster

explained ‘I am totally responsible for a contract, which is my

baseline, the least I am required to do. I always need to do

better than that.’94

Contracting with private providers has also resulted in the

separation of the management and punishment of

prisoners. Under the contracting model introduced in the

UK, a public official located at the prison, known as the

Controller, has responsibility for the adjudication of

prisoner misconduct and the assignment of additional

punishment. The Controller also serves as the on-site

contract monitor, whose decisions will have a major

influence on the allocation of penalty points and ultimately

on the level of financial deductions.

It is possible that this separation of the management and

punishment roles has contributed to a more constructive

relationship with prisoners, although some senior managers

in the private sector firms have indicated that they would be

willing to take on the adjudication role. A senior Prison

Service official, Stephen Pryor reported that prisoners were

indifferent about this and in some cases said they would

welcome private sector involvement ‘...as being more likely to

be fair’.

On the other hand, Pryor wrote that prisoners knew they

had a right to make complaints about the company to the

Controller but this had not produced an adversarial

relationship, ‘...rather the reverse in that prisoners seemed

to want to work with staff to overcome any difficulty.’95

Higher standards

One of the simplest explanations of why the contracted

prisons (public and private) have generally performed better

than the rest of the Prison Service is that more has been

demanded of them. This disparity was commented upon by

the Chief Inspector of Prisons for England and Wales in

1998 when he noted that some performance measures set

for the privately managed prisons were ‘...far and above what

we find in public sector prisons’:

I do not disagree with a target of 30 hours for workshops in

a week, but, if that is being demanded of and achieved by

contract prisons, why is the Key Performance Indicator for

equivalent public sector prisons only set at 24 hours a week,

which all too many are not achieving?96

The Scottish Inspectorate made similar comments when it

reported on Kilmarnock Prison in 2000.97 It is the process of

subjecting the service to competition and the imposition of

the contractual discipline that has given the Prison Service

the right to demand higher standards.

Increased accountability

Prison directors who have worked in the public system have

commented on the sharper and more focussed

accountability that exists under a contractual regime.

Kevin Rogers, the long-time director of Doncaster, has

commented that he has more auditors than he did when he

was in the public sector. In the private sector, he argued,

32

Competition: a catalyst for change in the prison service

accountability is more concrete and involves a specific

undertaking. In the public sector, accountability was focused

on doing whatever you were told.98 Stephen Pryor summarised

the position of private prison managers in this way:

Failure of delivery was not on the agenda. Altcourse had

delivered every hour of every aspect of the regime without a

single cancellation of evening or daytime association since

they opened. Adult and young prisoners we met elsewhere

spoke of this as the yardstick by which all prisons should be

measured. It made them feel they mattered as a simple

matter of professionalism, and increased their respect for

the jailers.99

The Chief Inspector of Prisons for England and Wales also

wrote of the benefits that contractual accountability brought

and argued that it should be adapted and applied to the

public sector prisons:

...the way in which HMP Altcourse and other contracted out

prisons are being managed points a way forward for all

prisons. I do not believe that the Prison Service would have

allowed contracted out prisons to fail, in the way that some

public sector prisons have failed, not least because of the

sanctions that they can impose. The lesson therefore is that

one sure way of preventing prisons from failing is to ensure

constant and consistent supervision of their performance

by those responsible for them, in other words Operational

Managers. All private sector prisons are required to operate

in the same way, and there is built-in consistency in their

management. I am glad that all prisons are to be run on

Service Delivery Agreements (SDAs) in the future, with Key

Performance Targets (KPTs) replacing KPIs. It is to be hoped

that these will give a better picture of how each type of prison

is performing, and, within each type, some idea of

comparison of performance between individual prisons.100

Premier Prisons established the role of ‘Investigations

Officer’ at each of its prisons to conduct inquiries into

incidents, reporting directly to the director, with two more

company-wide posts. In 2000, the Scottish Inspectorate

described this role as unique among Scottish prisons.

They were also impressed with the Contract Compliance

Officer, who has responsibility for performance

management and recommended that the Scottish Prison

Service investigate how both roles could be introduced

throughout Scotland’s publicly managed prisons:

The standards set for Kilmarnock are higher in many cases

than elsewhere in the SPS [Scottish Prison Service] and whilst

this is significant, perhaps the most important difference is

the contract compliance monitoring process. Under this

process, detailed performance data is collected, collated and

analysed to establish objectively performance levels as well

as to identify problems and their causes to allow swift

remedial action to be taken. We have not encountered such

clarity or focus elsewhere in Scottish prisons and therefore

recommend that the SPS considers how the performance

management of its other prisons can be improved in light of

the experience at HMP Kilmarnock.101

In addition to contractual accountability and the various

public sector audits and inspections, PFI prisons are

sometimes also monitored by technical advisers appointed

by the banks. These reports address operational

performance, in particular compliance with the criteria

laid down in the contract. Since financial returns are

affected by financial penalties, the banks have an acute

interest in assaults, self-harm and purposeful activity.

While HM Prison Service has adopted a performance

measure framework that imitates some of these elements,

it lacks the discipline of these contractual regimes and the

associated system of financial penalties.

Management space

The managers of contracted prisons have a significant

advantage over prison managers in the rest of the prison

service in their relative freedom from bureaucratic

intervention. Management space is also greater where an

in-house team has won a contract following competition

(as at HMPs Blakenhurst and Buckley Hall).

The heavy cost of bureaucratic intervention in operational

management in the Prison Service has long been recognised.

Lord Woolf criticised ‘...the confetti of instructions descending

from Headquarters’ in 1991, Sir John Learmont, the

‘...blizzard of paperwork’ in 1995, and Lord Laming ‘...the

deluge of paperwork’ in 2000. The Chief Inspector of Prisons

turned to this same issue in his 1998-99 annual report:

Sitting in the office of a Head of Management Services,

as I have done in a number of prisons, and observing the

amount of and content of the paperwork that descends from

Headquarters every day, is a sobering experience. Numerous

requests for information, from many different branches, asking

for the same facts to be presented in a slightly different form,

on a different day. Many requests for instant information, or

views on proposals, carrying the comment that they involve

‘nil’ resource requirements. That may be so in terms of money,

but it ignores the fact that time is a resource, and time spent

in an office, or distracted from normal routine duties, is time

spent away from prisoners. Any operational leader knows that

time spent in the front line is crucial if command is to be

properly exercised. I am absolutely certain that one of the

33

Competition: a catalyst for change in the prison service

main reasons for some of the unsuitable or unacceptable

attitude of some staff, to the treatment of and conditions for

prisoners, on which we have reported, is due to the absence

of senior management from the wings...102

Lord Laming was concerned not only with the distraction

of senior staff from day-to-day management but also with

the blurring of accountability lines. More disturbing was

Laming’s observation that little had changed since the

publication of the Woolf and Learmont reports.103

Privately managed prisons have a significant advantage over

their public sector counterparts in this regard. Contractual

performance targets, particularly where they are output-

based, provide senior managers with much greater clarity of

objectives and much greater freedom to manage. This was

recognised by the Chief Inspector of Prisons for England

and Wales in 1999:

HMP Altcourse, being a contract prison, has a number of

advantages over public sector prisons in terms of its direction.

Its contract lays down what is expected of it, and how much

that costs. To monitor that contract, there is a contract

compliance monitor, or Controller, in the prison, monitoring

what is being done, 365 days a year. Being a commercial

operation, management response to appeals from the Director

for help, or support, is instant, not subject to labyrinthine

public sector, bureaucratic procedures, and it tells.104

Another way of expressing this distinction is to say that the

managers of contracted prisons are surrounded by better

systems. The former US Vice President, Al Gore argued that

the problem with modern government is good people and

bad systems:

The federal government is filled with good people trapped

in bad systems: budget systems, personnel systems,

procurement systems, financial management systems,

information systems. When we blame the people and impose

more controls, we make the systems worse.105

One of the reasons why privately managed prisons in the

UK were able to deliver such high quality services is that

they were able to recruit excellent managers from the

Prison Service whose leadership and creativity had been

constrained by bureaucratic rules and regulations.

Competition and contracting provide good people with

good systems (or at least much better ones). When the

director of HMP Doncaster was asked about the advantage

of being able to draw on the best public sector managers,

he explained that the private sector freed good managers

from the limiting constraints that had always been part of

the public sector.106

In spite of the obvious benefits that managerial freedom has

brought, the privately managed prisons are increasingly

being burdened with the same ‘confetti of instructions’ that

plagues the publicly managed prisons. This may have

happened as a result of good intentions – the introduction

of new monitoring and assessment regimes in the Prison

Service – but the effect has been to constrict this managerial

space and to reduce the opportunities for innovation.

Competition

Innovation

Competitive tendering brings a number of different teams

to focus on the service in question and the pressure of

competition creates a powerful incentive for them to think

of new ways of doing things. There is some evidence that

competition contributes to finding new solutions simply by

bringing fresh minds to the problem. A Rand study into the

A-76 program in the United States federal government asked

why private contractors won these competitions more often

than in-house teams. Among a range of reasons, Rand

focused on the ability of external contractors to design a

solution tailored to the specified task, rather than being

constrained in their thinking by traditional work practices

and perspectives (as in-house teams often were).107

There is evidence that these factors have been at work in the

UK prisons sector. Private prison managers have benefited

from the clarification of service outcomes and they have

been able to pursue innovative service options that were

beyond the capacity of the Prison Service using traditional

procurement methods. The following examples describe

some of the innovations introduced by the private prison

managers over the past eleven years.

Innovation

Regime

When it bid for the management of HMP Wolds Remand

Prison, Group 4 proposed an American system of prisoner

management known as ‘direct supervision’, that had not

previously been used in the UK. Direct supervision rests on

the principle that closer and more constructive contact

between staff and prisoners will reduce disruptive

behaviour, thereby reducing construction and management

costs. When fully applied, this involves a significant

delegation of authority to unit supervisors.

The majority of remand prisoners do not receive a custodial

sentence when their case finally goes to court and Group 4

placed the presumption of innocence at the heart of its

management regime. According to a detailed academic study

34

Competition: a catalyst for change in the prison service

of HMP Wolds undertaken for the Home Office, the key

principles of the regime adopted by Group 4 were:

■ The presumption of innocence, ‘and the imposition of only

those restrictions that were essential in order to hold remand

prisoners securely’

■ Provision of an environment that was as normal as

possible

■ Exercise of control through constructive relationships

rather than coercion

■ Smooth operation of the prison day-to-day with a view

to minimising frustration.

Delivery of services in excess of minimum standards

wherever possible, particularly in areas important to

prisoners such as visits.108

Another significant element of the HMP Wolds regime was

the introduction of a compact between prisoner and prison,

establishing the terms of his imprisonment, identifying the

individual prisoner’s needs and seeking to develop a sense of

responsibility in relation to his behaviour and rehabilitation.

While this had some North American antecedents, senior

managers at Group 4 saw themselves as implementing one

of the key recommendations of the Woolf inquiry,

conducted in the aftermath of the Strangeways riots in 1990.

The Prison Service has continued to struggle to implement

prisoner compacts. Stephen Pryor, writing a decade after the

contract for HMP Wolds was signed, thought that the

privately managed prisons still had a significant edge on the

publicly managed prisons in this regard: ‘The notion of the

offender as being someone who has damaged the social

contract, and who is expected to repair it in partnership with

society, seemed more clear in a contracted prison.’109

The regime at HMP Wolds was radically different. ‘Direct

supervision’ had not been tested in the UK prior to this and

Group 4 was proposing a level of freedom for remand

prisoners that had only been attempted with sentenced

Category C prisoners before. HMP Wolds would also be the

first prison to provide 15 hours out-of-cell every day for

remand prisoners.110

The Home Office study subsequently reported that it was

likely that this innovative new regime was one of the main

reasons why Group 4 was awarded the HMP Wolds contract.

This is important, since it means that, whatever the cost

savings associated with the first prison outsourcing, a

principal reason why Group 4 were awarded this contract

was their commitment to an innovative and more liberal

regime for remand prisoners.

Culture

Comment has already been made on the revolution in

staff-prisoner relationships brought about by the privately

managed prisons. This was achieved in a multitude of ways

but several innovative practices stand out as symbolic of

this new environment.

From the very first contract prison, Group 4 introduced the

practice of referring to prisoners as ‘Mr’ or by their first

names. Staff in turn wore name badges and allowed

themselves to be called by their first names. The Prisons

Inspectorate later commented that, ‘...this was not simply

good practice. As a result, prisoners felt that they were treated

with the right level of dignity and were within an environment

which strove, as far as possible, to reflect the courtesies of

normal life.’111

A decade later the Prison Service had still not been able to

introduce these practices into the publicly managed prisons.

A proposal that staff wear name badges was abandoned in

the face of intractable opposition. In May 2001, when the

then Director-General of the Prison Service, Martin Narey,

suggested that staff in public prisons refer to inmates by their

first name, a union official responded ‘Among my members

there’ll be total shock and disgust at this. They’ll be saying

there’s no way I’m doing this. It’s a respect thing.’ A prison

officer was quoted as saying, ‘There’ll be a riot. We are prison

officers, not nurses or hotel staff. It’s ridiculous politically-

correct gesturing.’112 This innovation did not proceed either.

Another initiative was the introduction of privacy locks,

giving prisoners a key to their own cell. This allowed them

greater privacy, reduced opportunities for stealing while also

reducing costs by releasing staff from the need to lock and

unlock cells throughout the day except at general unlock and

lock-up times. It has become commonplace in all there

prisons and following major refurbishments in the public

system but is still resisted in parts of the Prison Service.

In some of the privately managed prisons, all of the staff

including the directors, wear the same uniform, which is

somewhat more casual (and thus less threatening) than

the uniforms worn by officers in the Prison Service.

The senior management of these facilities also regard the

practice of officers eating their meals with prisoners to be

extremely important in terms of breaking down the

confrontationist culture.

The principal means of introducing this new culture into

their establishments was by recruiting the vast majority of

their custodial staff from the local community. It is not

unusual for more than 90% of the staff in a privately

managed prison to have no previous experience of working

with prisoners. Staff recruited from the local community

bring with them none of the weariness and cynicism that

35

Competition: a catalyst for change in the prison service

characterises the culture of many public prisons. There are a

number of risks associated with this policy, particularly in

the early stages of commissioning when prisoners are testing

the regime, but they are risks that the companies have been

willing to take and the policy appears to have delivered the

intended results.113

It has been suggested that smaller staff-prisoner ratios may

themselves have contributed to a more cooperative culture.

While a greater density of prison officers may contribute to

a greater sense of safety, it is also a stark reminder that

prisoners are being guarded. Several of the innovative and

generally successful regime innovations – direct supervision

and the structured environment – were also influenced by

the desire of the prison management companies to bring

down staffing costs.

Prisoners have associated this change in culture with the

relative absence of the Prison Officers Association from the

privately managed prisons. In 2000, the Chief Inspector of

Prisons commented that in three privately managed prisons,

he had heard the term ‘POA prison’ used to refer to the

public sector prisons. ‘It is not an attractive phrase, and I

hope that Prison Service senior management will reflect upon

its use, because it is an indication of who prisoners think are

in charge of some public sector establishments.’114

Another way that management companies were able to

normalise the environment in their prisons was by

introducing a much larger number of female prison officers.

This had been resisted in some of the publicly managed

prisons but the former Director-General of the Prison

Service, Martin Narey, has acknowledged that introducing

more women had a civilising effect on prison regimes.115

More recently, the Prison Service has been actively recruiting

a higher proportion of female officers.

Design and construction

The Private Finance Initiative provided opportunities for

innovation in design and construction. One of the most

striking examples was the re-introduction of radial design

(a Victorian concept), but with certain improvements –

clear lines of sight and control rooms located at the centre

of the radiating wings. This contributed towards a safer

environment while at the same time reducing the number

of staff required to manage the prison.

At HMP Parc, Securicor and Costain were able to reduce

costs by using less floor space and constructing fewer

buildings than other bidders.

These arrangements included the use of an appointments

system for prison visits (thus reducing the space needed for

the visitors’ room), the replacement of kitchen facilities with a

catering service based on the delivery of cooked/chilled

foods to the prison site, less unused space between

houseblocks and other reductions in space utilisation.

Although the savings were not quantified when bids were

evaluated the Prison Service have since estimated that

this approach to design reduced the cost of the

Securicor/Costain bids by approximately 30%.

The Securicor/Costain proposals for cost savings were

not new techniques, which were likely to be covered by

intellectual copyright. They were solutions, which had been

used successfully in other countries, but had not been

proposed by any other bidder in this competition or

previously used in a British prison.116

At HMP Altcourse, Group 4 and Carillion pioneered a

system of standardisation and prefabrication in cell

construction, which significantly reduced costs and ensured

much faster delivery.

The new houseblock system was assessed to be capable

of delivering concrete and steel category B modular cells

(not available in England and Wales at the time the

Fazakerley contract was let) between 6 and 11 months

faster than using traditional methods. This assessment

proved to be accurate.117

The early PFI prisons were also highly innovative in using a

fast-track strategy that overlapped design and construction

and opened the facility without a preliminary

commissioning period. This enabled construction periods

to be significantly reduced, although it also exposed the

companies to greater risks in the early stages of start-up.118

A survey by the Construction Industry Council in 2000

asked 16 project managers from the Prison Service, PFI

companies, professional advisers and suppliers, why these

innovations had not been implemented before. Three

explanations dominated the replies:

■ Lack of the necessary experience within the organisation

or the industry

■ Lack of incentives to innovate

■ Organisational behaviours that hindered new initiatives.119

Technology

Privately managed prisons have also relied on technology to

boost productivity and increase security and service quality.

The difference was particularly noticeable at the first two

PFI prisons, HMP Parc and HMP Altcourse. As the Prisons

Inspectorate observed:

36

Competition: a catalyst for change in the prison service

Altcourse being a new prison benefited from advances in IT.

Camera cover, for example, was excellent with well in excess

of 300 cameras, more per square mile we were told, than any

other area in Europe.120

CCTV cameras are one of the reasons why privately

managed prisons are able to deliver service improvements

and a high sense of safety among prisoners with fewer staff.

Securicor and Group 4 also innovated with a new magnetic

key system that has reduced the costs associated with

restoring security following a key compromise. There are

risks associated with the introduction of any new technology

and HMP Parc experienced difficulties with its new key

system and its prisoner record systems in the early months

of operation.

At HMP Altcourse, Group 4 introduced a Barringer drug

detection machine in the visits area, an innovation that was

greeted with some uncertainty by prisoners and their

families, but welcomed by the Board of Visitors.121 At HMP

Kilmarnock, Premier pioneered a satellite tracking system

on prison vehicles, which provided real-time monitoring of

prisoner escorts. The Inspectorate recommended that the

Scottish Prison Service adopt this system.122

Premier also introduced an information channel on the

in-cell television system at HMP Doncaster, which included

induction material for new arrivals (and an in-cell television

was provided free-of-charge in the first two weeks in the

prisons). Prisoners were able to influence the content of this

channel at weekly meetings with management and

elsewhere. The Prisons Inspectorate commended this

initiative as national good practice.123

Competition

A mandate for reform

Winning the right to manage an organisation following

competitive tendering gives senior management a powerful

mandate for reform, even when it is the in-house team that

wins. It is not only that the new management team has

developed the solution and warranted its successful

implementation, but that they come to the challenge of

reform knowing that they are the best team for the job.

Indeed, the impact of this competitive mandate may have

been greater in the three publicly managed contract prisons

than it has in the privately managed prisons, since they were

still operating as part of the Prison Service.

Benefits for the public sector

There is evidence that the Prison Service more widely has

benefited from the competitive process. Home Office

research published in March 2000 concluded that the cost

gap between contracted and publicly managed prisons

(measured as cost per place) had narrowed significantly in

the years following the introduction of competition. As

noted above, this over-estimates the efficiency gains, but it is

probable that the public sector did improve its performance

during this period.124 The strongest evidence for the

turnaround in performance was the success of the Prison

Service in winning back two contract prisons on rebid.

The Laming report in 2000 commented on the advantages

of privately managed prisons, asserting ‘It is important for

the companies in this sector to provide both effective

competition and useful benchmarks of performance against the

Prison Service.’125 The Carter report in 2001, concluded:

It is widely accepted, by management and unions alike, that

the competition offered by the new private prisons and the

market testing of existing establishments has made the

prison system more efficient and effective as the public sector

has sought ways to improve its working practices and become

more competitive.126

And Martin Narey, has also acknowledged the huge impact

that competition has made:

Speaking as someone who some years ago was fiercely

opposed to the introduction of the private sector into the

Prison Service, it has introduced competition, it has

introduced better standards of working, a transformation of

culture, in getting new staff in, and it has had a big role,

I think in helping me to persuade trades unions, but

particularly the POA, to take a different attitude towards the

care and custody of prisoners. The sorts of regimes which we

are running at Buckley Hall, for example – which has been

back in the public sector for 18 months and where the past

Chief Inspector thought the prison was in some respects

better than it has been in the private sector – it is

inconceivable that I would have been able to deliver those

changes so quickly without the impetus of competition.127

In spite of being opposed to privately managed prisons,

Mike Newell, president of the Prison Governors’

Association, has acknowledged that, “...despite my moral

objections to placing prisons in private hands, I have to admit

that the shock to the service of privatisation did start it on a

path to recovery.”128

Based on the reports of the Chief Inspector of Prisons,

it is clear that some of the most significant improvements

lay in the decency agenda that Narey was himself pursuing.

But according to the Prisons Inspectorate:

More lessons need to be learned from contracted out prisons.

Our research and inspections lead us to believe that the

cultures in contracted out establishments are more in keeping

37

Competition: a catalyst for change in the prison service

with the declared aims of the Director General than in the

Public Sector as far as the treatment and conditions of

prisoners are concerned. We recommend that the Prison

Service carries out a wider evaluation exercise of the

strengths of the contracted system.129

Better management

Leadership

Obviously, team leadership must play a significant part in

good management. One of the surprising features of the

early contract prisons was the high level of interaction

between the senior prison management, prisons officers and

prisoners themselves. This was ‘management by walking

around’, which Stephen Pryor observed seemed to occur

more frequently in the privately managed prisons:

All staff seemed to know the Director well, and vice versa.

First name terms were commonplace without the least

over-familiarity, simply as the most direct way of

communicating. We never heard reference to the Controller

from staff or prisoners...

Directors appeared to be familiar with all parts of the prison

and with many prisoners. All prisoners seemed to know who

the Director was, and how far he or she would be prepared to

manage risk. Because most Directors had been in post for

some time it was difficult to say if this was a confidence in the

company as against the individual Director.130

People

It is usual for companies delivering public services to have

flatter and leaner management structures than their public

sector equivalents. In the custodial sector, Stephen Pryor

observed that ‘...most private prisons have short lines of

communication between the top and the bottom. At Altcourse,

there are three grades plus the Director...’131

The private prison management companies appear to

command stronger team loyalty than the Prison Service.

Pryor wrote that ‘...staff in private prisons spoke of their loyalty

to, and pride in, their particular prisons, more than to the

company or to the Prison Service.’ In part this is because the

vast majority of staff are recruited from the local community

and are only rarely moved between prisons. The Wolds study

concluded that, ‘...in a very real sense...all staff at Wolds and

Blakenhurst have a far greater personal investment in the prison

per se than at most public sector prisons.’132 Having all staff

including the director, wear the same uniform also breaks

down artificial barriers between front line and support staff

and reinforces the sense of teamwork.

Contract prison managers are more inclined to see their

employees as their staff, recruited for the prison in question

and not capable of being transferred by middle management

in London to some other part of the prison estate. This

enables experienced directors to build a strong team with

commitment to the prison and to its leadership. As the

long-serving director of Doncaster prison, Kevin Rogers,

put it during a 2001 seminar:

Everyone knows that I have always been there for the future.

We have staff shortages, sickness and budget cuts just like

anyone else, but we still know we have to deliver, and go on

delivering, and we cannot rely on being bailed out by others.

We have to rely on each other, including the prisoners.133

Lord Laming expressed concerns about the failure to

manage poor performance of individual staff members in

some parts of the prison system.134 By contrast, the

managers of privately managed prisons cannot afford to let

poor performance continue unattended: there are financial

penalties for failing to get on top of such problems.

One of the ways in which this attitude manifests itself is in

the very different experiences of the public and privately

managed prisons in coping with sick leave. Publicly

managed prisons have a significantly worse record on

managing sick leave than their privately managed

counterparts (and the economy as a whole). It has been

estimated that the Prison Service lost 15.2 days per person

in sickness absence in 2002 (and 18 days for prison officers),

compared with 7.1 days for the economy as a whole, and

10.1 days for the public sector in general. Recent figures for

the privately managed prisons are not available, but in 1999

the Home Office reported that sick leave was less than half

that of the publicly managed prisons, suggesting that the

privately managed prisons are roughly equivalent to the

national average.135

Why do the two sectors perform so differently? Tighter

management, particularly by front line managers, is part of

the explanation. In his 2000 report on the modernisation of

management in the Prison Service, Lord Laming dealt with

this issue, contrasting the ‘bureaucratic and cumbersome’

procedures for dealing with this issue in the Prison Service

with the active management that takes place in the private

sector.136 But morale and team loyalty also play a part and

the privately managed prisons may also have an advantage

in that regard.

Laming was also surprisingly frank about the extent to

which public sector prison managers deferred to the trade

union in matters that should have been the responsibility of

management. His report expressed concern about the large

number of ‘failures to agree’ with the trade union: 230

38

Competition: a catalyst for change in the prison service

outstanding at April 2000, with as many as ten unresolved

issues in some prisons and some more than three years old.

It seems astonishing...that a trade union has been able to

delay the implementation of change in this way. If a Governor

wishes to open a prison reception area for longer than usual,

or unlock and deal with a prisoner earlier than usual because

of a long trip to court, it should not require the agreement of

the trade union before it can happen. A Governor must have

the right to deploy staff in the manner deemed most

appropriate, and should not have to ask the POA for

permission to operate and manage the prison in order to

meet the operational demands being placed upon it.137

Group 4 recognises the GMB at its prisons, Premier

recognises the Prison Service Union and industrial relations

have generally been good. Premier has actively used work

councils and employee partnership forums to improve the

quality of its communications with staff. There have been

inevitable tensions in those prisons, such as HMP & YOI

Ashfield, with high turnover and vacancy rates. The Scottish

Inspectorate noted that at HMP Kilmarnock, the staff with

whom it spoke were generally satisfied with the consultation

processes in place at the prison.138

Prisoners

The prison management companies also seem to have been

more active in engaging prisoners in the management of

their prisons. This was implicit in the ‘direct supervision’

regime introduced by Group 4 at Wolds, but it has been

commented on elsewhere in the private prison estate. For

example, the Chief Inspector commented on the regular

consultation which takes place with prisoner representatives

at Doncaster. The director at Doncaster described it this way:

The basic unit of 3 officers to 90 prisoners is our community,

with the assumption that the prisoners are an integral part,

who are required to help and who do not want to do harm to

that basic assumption. They are given responsibility to do

that. It is, in many senses, their prison as well as the staff’s

prison. That is simple reality...Prisoners and Listeners attend

the relevant staff and management meetings, with

representatives meeting the senior management team weekly

under my chairmanship. Prisoners are expected to show full

responsibility and we are not disappointed.139

Assets

The public sector has always had difficulty in sustaining

an appropriate level of spending on maintenance, and the

Prison Service has been no exception. In the 2000 Spending

Review, the Prison Service estimated that it had a five-year

maintenance backlog, with a total cost of around £750m.140

The Scottish Prison Service contracted out some of its

maintenance in the early 1990s, but HM Prison Service

chose not to follow this same route.

PFI imposes a strict discipline on maintenance expenditure

since commitments must be written into the contract

from the outset. The PFI approach also integrates design,

construction, maintenance and operation, demanding that

prisons manage their assets on a whole-of-life basis. This

creates powerful incentives for private prison managers to

ensure that their facilities are maintained to an agreed standard.

At the same time, integrating design and operations has

allowed private prison managers to experiment to find a

more efficient mix of capital and operating costs. The

interaction between prison design and the ‘direct

supervision’ regime pioneered by Group 4 is one example of

this. At HMP & YOI Ashfield, Premier invested additional

funds in rubberising a playing field in order to ensure that

young offenders in its charge could spend more time involved

in activities, as required under the contractual regime.

Staff costs

To what extent have value-for-money improvements come

from less favourable terms and conditions for prison staff?

Research undertaken by the Home Office in 1999 comparing

contract and publicly managed prisons, found that staff

costs per prisoner were significantly lower in the contract

prisons. Around half of these differences were due to

productivity improvements – management initiatives which

resulted in fewer staff per prisoner – with the other half

being due to lower unit costs.

Productivity improvements

In 1998, average staffing ratios (per prisoner) were 17%

lower in the contract prisons, and with the introduction of

PFI, the differential increased even further, to around

25%.141 According to the Home Office (1999), the private

sector’s ability to do this was ‘...probably due to more flexible

deployment and a better focus on key tasks.’142 In a report

published the following year, the Home Office observed that

‘...private sector management still appears to offer an

advantage by focusing on the core tasks and delivering higher

productivity than in the public sector.’143

Hours delivered in the contract prisons were 7% longer.

This was caused by a number of factors: the average working

week was 3% longer, planned time off (including holidays

and privilege days in the public sector) was 13% lower, there

was 50% less overtime and sick leave was down 53%. On the

other hand, the contract prisons provided 28% more

39

Competition: a catalyst for change in the prison service

training, including ongoing training. It was the 3%

difference in the working week that made the greatest

difference, followed by the better management of sick leave.

Even though it has continued to apply pressure to its own

establishments to bring down staffing ratios, HM Prison

Service has remained extremely uncomfortable with the

staffing levels in the privately managed prisons and there

has also been criticism from time to time from the Prisons

Inspectorates. Some of this criticism is probably justified,

particularly in the later prisons, but some of it arises from a

very different approach to prisoner management. In 2002,

the Scottish Executive acknowledged this criticism

concerning HMP Kilmarnock, but replied:

Contrary to views by opponents of privately managed prisons

that staffing levels are unacceptable, the SPS fully evaluated

and accepted the robustness of the operator’s staffing

proposals and experience to date has reinforced SPS

judgement that the levels of deployment work well.144

Terms and conditions

A further way in which staffing costs were reduced was

through lower unit costs: privately managed prisons pay

their prison officers and operational support staff

significantly less than the Prison Service. A survey

commissioned by the Prison Service Pay Review Body in

early 2003 found that:

■ Starting pay rates for operational support grade staff and

prison officers are significantly higher in publicly

managed prisons (15% & 22% respectively)

■ Average pay for prison officers and senior officers is also

significantly higher (more than 50%)

■ Average pay for management staff at principal officer

and head of function level is around 10% higher in the

private sector

■ Average pay for prison directors is around 20% higher

than in the public sector.

The Pay Review Body noted that pension and holiday

benefits further widened the gap between public and private

sector staff at the level of operational grade support staff,

prison officers and senior officers.145 Comparative data on

the publicly managed contract prisons (HMPs Manchester,

Buckley Hall and Blakenhurst) are not available, but they

may have reached some kind of accommodation with the

Prison Officers Association on staffing numbers and terms

and conditions in order to compete with the private

management firms.

The evidence is quite clear that a significant proportion of

the savings from competitive tendering comes from lower

unit costs. It must be stressed that this does not mean that

terms and conditions of serving prison officers have been

cut: each of the privately managed prisons commissioned to

date has been a Greenfield site, with the workforce recruited

directly from the local community.

It would also be wrong to conclude that prison officers with

the same level of qualifications are paid 22% less than the

publicly managed prisons. The profiles of the prison officers

in the two sectors are considerably different, for a number

of reasons:

■ Staff in publicly managed prisons tend to be more

experienced. More than 90% of prison officers in privately

managed prisons are recruited from the local community

and trained by their new employers. As a result, prison

officers in public prisons have more experience, enabling

them to demand better terms and conditions. This can be

expected to change in the private sector and there is

evidence that the private sector has introduced greater pay

progression over time146

■ Publicly managed prisons have lower turnover rates and

greater longevity of service. The Prison Service has an

extremely low turnover rate, lower than the wider public

sector, the economy as a whole and the privately managed

prisons.147 Low turnover results in workers being on

higher increments

■ The Prison Service has more pay bands. Privately

managed prisons have flatter structures and fewer bands,

which also reduces the amount of ‘over-grading’;

■ The Prison Service workforce is older than average.

The Prison Service Pay Review notes that some 40% of

operational managers will reach retirement age in the

next ten years, creating a serious succession crisis.148

By contrast, privately managed prison are recruiting

younger workers who have lower wage rates as a result

■ The private sector generally assigns greater responsibility

to senior management positions. The Pay Review Body

reported that a comparison of roles had found that ‘at

principal officer level and above private sector roles were

clearly greater’ than comparable public sector positions.149

One of the key differences between the two groups is that

the privately managed prisons recruit their workforce in the

local community, with the consequence that pay rates reflect

local economic conditions. In areas of high unemployment,

the management companies have been flooded with

applications and they could afford to be selective in their

recruitment.150 In areas of low unemployment, they have

experienced greater difficulty. The Prison Service has a

40

Competition: a catalyst for change in the prison service

system of national wage bargaining. This means that terms

and conditions across publicly managed prisons are

influenced to some extent by the cost of living in the most

expensive parts of the UK.

It should be noted that all prison officers receive formal

training and are certified or ‘badged’ by the Home Office

before they can be employed in a privately managed prison.

They are obliged to undertake refresher courses and to

upgrade their skills in order to retain this certification.

If private sector firms were paying significantly less than local

pay rates they would not be able to attract a sufficient

number of new recruits, particularly given the challenging

nature of the job. Interestingly, one of the ways in which the

privately managed prisons consistently out-perform the

publicly managed prisons is in the quality of staff-prisoner

relationships, which suggests that prison officers in the

privately managed prisons are highly motivated.

High turnover rates are a possible indication of employee

dissatisfaction, although given the innovative practice of

recruiting inexperienced staff from the local community, it

is perhaps unsurprising that the privately managed prisons

have had higher turnover. High turnover, particularly in the

early years, reflects a learning process on the part of both

company and staff, and there is evidence that this problem

has settled down over time. Given the risks associated with

recruiting in the local community rather than drawing on

experienced prison officers, it would be surprising if the

management companies were not encouraging personnel

unsuited to custodial work to move on to other jobs.

Nevertheless, the higher turnover rates in some of the newer

prisons and the difficulties that companies have had in

filling vacancies suggests that in some parts of the country

with low unemployment, terms and conditions have been

set too low. To some extent, HMP & YOI Ashfield appears

to have suffered from this, contributing to a failure to meet

some of its contractual targets and the imposition of

financial penalties as a result.151 This is not a strategy that

the management companies can afford to pursue for long as

a matter of deliberate policy.

In summaryIt is competition and contracting that have delivered these

benefits for the UK correctional system, not the private

sector per se.

The discipline of writing, negotiating and managing a

contract for the provision of custodial services creates a

number of benefits:

■ Writing a statement of requirement focuses

government’s attention on the desired outcomes and

the scale and scope of the service in question

■ The separation of decider and provider enables both

parties to concentrate more clearly on their particular

contributions and removes conflicts of interest

■ The separation of responsibility for the management

and punishment of prisoners may also have contributed

to an improvement in the quality of management

■ The process of letting a contract has enabled

government to insist on higher standards and increased

accountability

■ Contracting provides management space and frees

senior managers from bureaucratic intervention.

The discipline of competitive tendering creates a powerful

incentive to innovate. In the UK custodial sector,

contestability has encouraged significant innovation in

prisoner management regimes, organisational culture,

design and construction and technology.

Competition also gives managers a powerful mandate for

reform, whether they are in the public or the private sector.

The public sector has benefited from competition through

increased efficiency in publicly-managed prisons, the

dissemination of new technologies and management

practices, and through stronger incentives to reform.

The privately managed prisons have succeeded through

good leadership, better people management, greater

involvement of prisoners in the management of the

prison and more effective management of assets.

Staff costs are significantly lower in the privately managed

prisons, partly because of productivity improvements,

partly because of a differently structured workforce and

partly because they do not have national wage bargaining

and their terms and conditions reflect local economic

conditions.

41

Overwhelmingly, the introduction of competition and

contracting into the design, construction and operation of

custodial services in the United Kingdom has been a positive

experience. But nor has it been without its faults. There are

a number of lessons that are emerging now that the supply

market for custodial services is more than a decade old.

Centralised procurement

The Institute for Public Policy Research suggested that one

of the reasons why public-private partnerships had been

more successful in the Prison Service (and the Highways

Agency) was that both involved centralised contracting,

where officials were involved in repeated procurements.152

Not only did these officials develop a higher level of

expertise, they also became familiar with the prison

management companies and their capabilities. This is a

lesson not so much for the Home Office or the Prison

Service, but for other departments and agencies of

government in the design of contestability regimes and

effective procurement processes.

Full service contracting

The IPPR report also suggested that the success of prison

PFIs, compared with those in education and health, may

be related to the fact that they involved the full range of

services, with no separation of core and ancillary services.

This should enable the contractor to integrate thoroughly the

design and build of the prison with its operation and make

productivity gains through the way it manages the single

most important input in any public service – the workforce.153

A number of integration efficiencies have been identified in

this report that tend to confirm the IPPR’s interpretation.

It is not always possible for government to contract the full

range of services but the UK experience suggests that

government does need to carefully weigh the consequences

of not doing so. Certainly the benefits of integration and full

service contracting should be investigated closely before the

government considers the adoption of the French model of

prison contracting (this involves the retention of custodial

services in-house and only exposing support services to

competition).

Sustainable markets

One of the factors that encouraged progressive companies to

invest in the UK custodial sector was their confidence that

there would be a number of future opportunities for which

to bid and the possibility of a sustainable market.

Companies make investment decisions on the basis of the

potential growth of markets over the medium to long term.

It is not always possible for government to provide this kind

of assurance when creating a new market, but where it can

demonstrate a commitment to growing a sustainable and

competitive market then the private sector will be prepared

to take a longer view and make deeper investments.

Just as important from the taxpayers’ perspective, where

companies face the prospect of repeat business, they will be

much more concerned about their reputations and where

they are engaged in repeat business with the same client,

they will be even more sensitive about meeting the

client’s needs.

Competitive neutrality

Until the recent establishment of the Commission for

Correctional Services in the Home Office, HM Prison

Service was both ‘poacher’ and ‘gamekeeper’. It was the

regulator and sole customer of the private management

companies and their major competitor. This was an

Section 5Lessons learnt

42

Competition: a catalyst for change in the prison service

untenable model and one that had the tendency to

undermine confidence in a level playing field.

The separation of the commissioning and provisioning roles

will do a great deal to reassure the prison management

companies and potential new entrants, particularly in

competitions for failing prisons that are part of the existing

Prison Service estate. But, there are aspects of this

commissioning/provisioning split which remain unclear to

the private sector. There is a strong case for the Commission

for Correctional Services to address these issues with the

management companies at a strategic level. If the Scottish

Executive wishes to build sustained market interest, it

should look to a similar form of separation.

However, there are other aspects of the competitive process

that the Home Office needs to consider if it wishes to ensure

a level playing field between public and private sectors. Prior

to future competitions, the Commission must address to the

sources of competitive advantage (and disadvantage) that

the Prison Service experiences by virtue of government

ownership. Likewise, in benchmarking publicly and privately

managed prisons, the Commission must ensure that

comparisons are being made on a level playing field.

Contracting for quality

There is some evidence that for several years prison

management companies were engaged in aggressive

competition calculated to build market share, and that,

to some extent, they may have inherited the winner’s curse

as a result. At one level, this is the responsibility of the

companies themselves. Certainly, they have no right to

expect that government will guarantee their profit margins.

But, government also needs to recognise the wider

implications of procurement processes that use price as the

dominant criterion in evaluating successful bids. With core

public services such as prison management, government

must always be concerned with procuring social outcomes.

This may extend to defining acceptable minima for the

terms and conditions of staff members as well as ensuring

the welfare and security of prisoners.

Again, the Commission for Correctional Services must

accept responsibility for market quality across the sector

and not view individual procurements as an entirely discrete

event with no consequential impact on the rest of the

correctional system or, indeed, the rest of government.

Moreover, if government takes the view that terms and

conditions in some parts of the custodial sector are

undesirable in light of broader workforce policy issues,

then the Commission must ensure that procurement

processes are amended to take this into account.

Contractual performance measures

Privately managed prisons are assessed against a range of

performance measures written into their contracts, with

penalty points assigned to each. For example, a minor

assault on a staff member might attract five penalty points,

and two such assaults in a single quarter would add ten

points to the quarterly total. If the quarterly total exceeds a

threshold specified in the contract, these points are

translated into financial deductions, which are withheld

from contract payments.

There are a number of deficiencies in these performance

measures. In some cases, they are concerned with inputs

rather than outcomes – for example, some contractors are

assessed on the number of hours prisoners spend in

education rather than on educational outcomes. Other

performance measures are out of touch with current

correctional policy – a contract with a high number of

working hours for prisoners is one such example dealt with

below. In other cases, performance regimes have created

perverse incentives – companies were penalised for finding

drugs and penalised greater amounts the more effective

they were.

And, until the latest contracts, the structure of the

performance regimes has meant that companies could only

ever fail – there is no recognition of exceptional

performance, well in excess of the contractual targets, either

in offsets against penalty points or in bonus payments. As

the Chief Inspector noted several years ago, the privately

managed prisons were being penalised for the failure to

achieve standards well in excess of those set for the public

sector, and there were no rewards for exceeding targets.154

There has been some recognition of these deficiencies.

Under the most recent contracts, companies will be granted

credits for exceptional performance, for example, in

educational outcomes and offending behaviour

programmes, and these will be offset against accrued

penalties. These changes have been welcomed by the

management companies, although they are not retrospective

and by no means have they corrected all of the imbalance.

At the same time, the Prison Service has been talking with

the companies about changes to some of the existing

contracts, with a view to introducing more of an outcomes

focus and to aligning the contractual performance regimes

with those that have been developed in the Prison Service in

recent years.

But, in opening these discussions, the Prison Service may

not have adequately recognised that the original contract

price was based on the risks associated with a particular set

of performance measures. There are good reasons for

shifting some of the risk of educational attainment onto the

43

Competition: a catalyst for change in the prison service

management companies, but this may need to be offset by a

compensating change in the total basket of measures, or an

adjustment to the contract price.

Over the past few years, long-standing contractual

provisions that required the private prison managers to

comply with orders and instructions have acquired much

greater importance. As noted below, the Prison Service has

altered the contractual performance regime incrementally,

through changes to orders and instructions, extensions to

standards audits and the introduction of key performance

targets. Moreover, the newer contracts seem to be expanding

this discretion to alter the performance regime.

More recently, the Prison Service and the Commission for

Correctional Services have sought to vary contractual

performance regimes unilaterally using change notices.

This is a disturbing new development that threatens to

weaken the confidence of the private sector in the

contractual regime. If it continues, inevitably it will result

in higher contract prices, as companies and their financiers

seek to insure against the increased risk.

In its meetings with senior executives of the management

companies, the Commission for Correctional Services

should discuss the direction of custodial management

contracting and the needs of the prison management sector

as regards performance measurement.

Prison service performance measures

Over the same period that contestability has been

introduced, HM Prison Service has developed its own

performance assessment regime. This followed

recommendations from the Chief Inspector and Lord

Laming that ‘...in every prison there should be a “service

agreement” and a system of performance compliance which

operates irrespective of the nature of the provider.’155

However, other than in the prisons that were subjected to

competition (Manchester, Blakenhurst and Buckley Hall),

the Prison Service has not introduced strong quasi-

contractual arrangements. Instead, multiple performance

assessment regimes have been introduced – standards and

security audits and key performance targets. Over the same

period, HM Inspectorate of Prisons for England and Wales

has formalised its assessment criteria.

These assessment regimes have not only been applied to the

publicly managed prisons. Gradually, and without formal

consultation with the management companies, these

regimes have been applied to the privately managed prisons,

which are also constrained by their contractual performance

regimes. There has also been a tendency for them to be

interpreted more strictly rather than in a pragmatic way.

In some areas, the Prison Service has also been much more

active in imposing orders and instructions on the privately

managed prisons, significantly reducing the management

space that has been so important to their success. Area

managers in the Prison Service can also create a somewhat

different set of priorities again, enforced through additional

testing and discretionary funding.

There are several difficulties with the current arrangements:

■ There are now too many different kinds of performance

regimes, sometimes with conflicting requirements.

The Prison Service is at risk of drowning the privately

managed prisons in the ‘deluge of paperwork’

■ Some of them have been imposed on the management

companies without adequate consultation and without

recognising that government is unilaterally changing key

contractual terms

■ Many of the new requirements assume traditional ways of

delivering correctional services: the Prison Service is in

danger of stifling innovation.

Clearly, these performance regimes need to be considered in

their totality, and some rationalisation must be undertaken

in consultation with the contracting companies. The

establishment of the Commission for Correctional Services

provides an ideal opportunity for this to take place. But,

there are a number of unknown factors about the

Commission and its relationship with the Prison Service.

It is unclear to what extent the Commission will assume

responsibility for these different performance regimes and

thus, to what extent it will have the power to rationalise this

overlap and duplication. Obviously there must be close

collaboration, but the experience of the past three or four

years has shown that some of the internal management

systems of the Prison Service, such as orders and

instructions and standards audits, have intruded deeply into

the managerial autonomy of the privately managed prisons.

The Prison Service has taken up the recommendations of

the Laming Review that it introduce ‘service level

agreements’ across the service, but more could be done to

strengthen and extend this quasi-contractual system.

This would be the best way of rationalising these

measurement regimes, enabling the government to impose

similar standards and a comparable accountability and

intervention regime to that which applies to the privately

managed prisons.

Innovation

Particular mention needs to be made about the impact that

these layers of inconsistent performance regimes have on the

ability of prison managers to innovate. While they are no

doubt well intentioned, managers and auditors with a

44

Competition: a catalyst for change in the prison service

traditional background are inclined to narrow the range of

options open to the senior managers of the privately

managed prisons. When they try to introduce a new

initiative, the management companies are obliged to

consider not only a set of outcome-based performance

measures written down in the original contract, they now

have to consider detailed requirements in the security

manual, a plethora of orders and instructions, area-level

initiatives and key performance indicators, and

recommendations from inspections and standards audits.

The Prison Service appears to be unaware of the impact that

detailed instructions based on traditional methods of

custodial management have in stifling innovation. Indeed,

senior managers have expressed their disappointment at the

lack of innovation in the bids received in recent competitive

tenders for new PFI prisons. It is crucial that the

Commission for Correctional Services understands the

role that competition and contracting have played in

delivering the service improvements documented in this

report, and the circumstances in which diversity and

innovation will flourish.

Risk transfer

The public and private sectors approach the question of risk

management very differently. Indeed, one of the great

benefits of the Private Finance Initiative lies in its capacity to

harness the powerful risk management tools of the private

sector in serving the public good. Moreover, much of the

controversy that still surrounds PFI arises from the very

different approaches to risk management in the two sectors.

Prison management companies have expressed a number of

concerns about the manner in which risk transfer is being

handled in the custodial sector. Mention has already been

made of the tendency of the Prison Service to alter

contractual terms unilaterally without reference to the

overall risk profile upon which the contract price was

originally determined.

Concern has been expressed that the obligations of the

private firms have also become more open-ended. The

viability of contracts that can last up to 25 years has become

less certain, particularly after the rise in insurance costs that

followed the events of September 11 and the fire at Yarl’s

Wood detention centre.

And looking at the level of financial penalties, it would

appear that over time the Prison Service has shifted greater

performance risk onto the management companies (at the

same time as it has brought down prices). Of course, this is

precisely what competition is intended to achieve, but there

are limits to how much risk can be transferred to prison

managers (public or private).

Continuous improvement

A number of privately managed prisons have been required

to accept a fundamental change in their roles even though

this has sometimes created significant challenges for the

institution in question. For example, in the case of HMP &

YOI Ashfield, the Prisons Inspectorate noted in 2002 that

there were fundamental incompatibilities between the

contract as negotiated and the performance that would be

required of it under its role as a juvenile prison (prisoners

now have significantly different educational needs which the

facility is ill-equipped to meet since it was designed and

constructed for a very different role). The Inspectorate

predicted that this conflict would compromise the quality of

the service staff would be able to provide.156

Attitudes about best practice in correctional policy change

over time and if the privately managed prisons are to remain

relevant, there must be scope for adjustment of contractual

terms. As long ago as 1999, the Prisons Inspectorate noted

that the terms of the contracts sometimes obliged contract

managers to deliver less than optimal outcomes for

prisoners, and recommended that contracts should be

renegotiated in these areas.157

Three years ago, it was said of HMP Lowdham Grange that

it performed well what the Prison Service asked of it but

that it probably wasn’t being asked to do the right things.

HMP Lowdham Grange was originally commissioned as an

industrial prison, with prisoners being asked to work a

35-hour week (far in excess of Prison Service averages).

One of the consequences of this is less time for education

and behaviour courses, which are now considered more

effective in preparing prisoners for re-entry into the wider

community. The correctional services policy agenda has

moved on but the contract for HMP Lowdham Grange has

not. As a result, it could be argued that prisoners are being

unfairly disadvantaged and HMP Lowdham Grange is open

to unjustified criticism.

It is inevitable that in the course of a 25-year contract that

some of the economic settings will also change. While there

are contractual provisions allowing for adjustment, it would

be wise for any review of the mechanisms for contract

renewal to take into account fundamental changes in the

economic and social background (such as those which

occurred in the wake of September 11).

Effective processes must be created to enable contracts to be

refreshed throughout their lives, particularly in the case of

PFI prisons which can have contracts of up to 25 years.

45

Competition: a catalyst for change in the prison service

Collaboration

Management companies bid against one another in

competitive tenders to secure the contracts to manage UK

prisons but in between these periods of competition (which

take place at the rate of about one a year), they collaborate

with the Prison Service as part of the wider prison network.

Over the ten, 15 or 25-year life of a prison contract, only

about one year will be spent in a competitive mode.

The remaining time will be spent in a collaborative mode,

working with area managers, striving to meet the Prison

Service’s objectives.

There are good reasons why there must be a clear separation

between purchaser and provider during the procurement

phase but for the vast majority of the contract life, privately

managed prisons are engaged as part of an integrated prison

network. In these circumstances it is obviously undesirable

for private providers of custodial services to be isolated from

the rest of the custodial system, including those in the

Commission charged with contract management.

This isolation has been reduced somewhat in recent years,

but in other ways, little has changed. Prison directors

transferring from the Prison Service to the private firms still

report being shunned by former colleagues. Stephen Pryor

commented that ‘[staff in the privately-managed prisons]

were mystified and hurt by derogatory references to them by

senior management of the service, and by the constant

reference to market testing as the sin bin, as though the

private sector was a leper colony.’158

In some ways, the establishment of the Commission for

Correctional Services makes this collaborative relationship

between the Prison Service and the privately managed

prisons more complex. It is important that strategic-level

discussions take place with the management companies,

to determine the nature of these high-level relationships

in the future.

The contestability model

Government has announced that it is prepared to use prison

management companies to manage failing public prisons,

with two establishments already identified as possible

candidates and another two shortly to be named. The

private sector is unhappy about being used as a ‘bogey-man’

for failing public sector services. Such an image undermines

the quality of relationships between the two sectors and will

make it much more difficult to establish constructive

relationships with any staff transferred from the Prison

Service under such an arrangement.

Given the failure of the Prison Service to attract a single

bidder for the management of HMP Brixton, the

Commission for Correctional Services must engage in

dialogue with the senior executives of the management

companies about this policy. Among other things, the

Commission needs to determine the circumstances in which

these companies would be prepared to bid for the

management of a failing prison.

The transfer of existing prison staff is one such issue. To

date, the management companies have relied exclusively a

business model that involves recruitment from the local

community, and real questions exist about their willingness

(and their ability) to manage the necessary cultural change

in an existing establishment, particularly one dominated by

POA members with the right to take industrial action.

The impact of the intervention model on the quality of

management-staff relationships in the custodial sector is

also unknown, particularly in a situation where the quality

of those relationships will lie at the heart of performance

transformation.

Questions also arise as to the applicability of the

management companies’ business model in an older prison

facility with little prospect of additional investment for

improving the physical environment. Staffing ratios and

staff-prisoner relationships must necessarily be different in

this situation.

If market-testing of failing prisons is to succeed, then the

Commission for Correctional Services must work in

partnership with the industry to communicate the

government’s intentions for market-testing failing prisons

and to understand the conditions under which the

companies might be able to make a contribution to their

transformation.

Exporting public services

Over the past 11 years, successive UK governments have

created a new industry in prison service management. To

some extent, this new industry drew on US expertise but

over the ensuing decade a distinctly British model for

privately managed custodial services has emerged. In the

process, the management companies have drawn on the

skills of a number of outstanding former public sector

prison managers, who have been given the resources and the

managerial freedom to develop their talents.

Prison management services in the UK are among the best

in the world and there are those who would argue that

governments have handled the development of a private

custodial services sector better than any other government

in the world. Some of these companies are now earning

export income by transferring best practice in custodial

services into countries overseas. This is an achievement to

celebrate, not only in the world of business but also in the

UK public sector. There are also important benefits for the

46

Competition: a catalyst for change in the prison service

prison services of England, Scotland and Wales, both in

spreading the costs of research and development and

in importing best practice from around the world back into

the UK.

There is considerable evidence of ‘first mover advantage’

in the public services sector. British and French firms

dominated water management around the world from the

late 1980s, because they were the first to commercialise.

An Australian merchant bank has been one of the leading

participants in private tollroads around the world, because

the Australians broke new ground in this area in the late

1980s. US firms have, until very recently, dominated the

custodial services sector, because the US was the first to

open up this sector to competition from private firms.

The Department of Trade and Industry needs to look at the

public services sector generally (and the custodial services

sector in particular) as an important element of the wider

services sector, and consider the domestic policy settings

favourable to the export of these services.

Issues for further considerationContracting for social outcomes: Without significantly

constraining the scope for innovation and ongoing

productivity gains, the Commission for Correctional

Services must resolve its priorities in terms of social

outcomes, including acceptable terms and conditions for

staff. The Commission should consult with the custodial

services sector as to how balance these considerations.

Overlap and duplication in performance assessment:The multiplication of performance assessment regimes is

a challenge for all providers of custodial services, public

and private. Privately managed prisons have an additional

concern because of potential inconsistency with their

contractual performance measures. The complexity of

these requirements and their assumption of traditional

management practices have the potential to constrain

innovation. Any resolution of these conflicts must be

undertaken at a strategic level and in close consultation

with the management companies.

Refreshing contractual terms: It is increasingly common

for contracts to be written for periods of up to 25 years.

Over this period, it is to be expected that there will be

several cycles of change in the underlying corrections

policy framework. The Commission for Correctional

Services must actively engage the management

companies in finding practical means of refreshing

contractual terms to take into account fundamental

economic and policy changes.

Quasi-contracts for publicly-managed prisons:In spite of significant improvements in recent years,

the Commission for Correctional Services could improve

the accountability of publicly managed prisons by

introducing a tighter quasi-contractual model, with

similar standards to the privately managed prisons and

comparable accountability arrangements.

Market-testing failing prisons: An important element

of a quasi-contractual model lies in early and credible

intervention in failing prisons. The Commission must

understand and address the management companies’

concerns about competing for failing prisons.

Competitive neutrality: Prior to future competitions

between the management companies and the Prison

Service, it will be important for the Commission to

address the competitive advantages and disadvantages

of the service.

Export of public services: The UK model for privately

managed custodial services is already being exported to

overseas countries, with potential future benefits for UK

correctional services in research and development and

the transfer of best practice. The Department of Trade

and Industry could assist the custodial services sector in

establishing domestic policy settings favourable to the

export of these services.

47

ALONGSIDE NEW INVESTMENT, the introduction of

contestability and contracting into the delivery of public

services can, if structured appropriately and delivered well,

stand as one of the two pillars of public service reform.

Many challenges are facing the private sector as well as its

successes. We should not excuse private sector failure where

it continues to exist. The quantitative and qualitative

evidence compiled in this report is an attempt to inject a

more rational and evidenced-based assessment of the

benefits of contracting and contestability into the UK’s

public services. The debate about private sector involvement

in the delivery of public services will not be advanced by a

dialogue between extreme or ideological positions.

At the start of the 1990s, few believed that the private sector

could or should be involved in such a core element of public

service as the delivery of custodial services. Those opposed

to private sector involvement in public services would

certainly have drawn the line at the use of the profit motive

to motivate those delivering such an essential element of the

criminal justice system. Yet, the report paints a compelling

picture of innovation, value for money savings and

sustained improvement in the management of prisons by

the private sector. There is still much to do, but the

experience has been overwhelmingly positive.

The report is also clear that these benefits have been

delivered, not because of the inherent superiority of the

private sector, but because of a highly effective programme

of competitive tendering and contracting created and

managed by the Prison Service. Public versus private may

matter, but competition versus monopoly matters a great

deal more.

Conclusion

48

Competition: a catalyst for change in the prison service

1J. Bowring (ed), The Works of Jeremy Bentham, (Edinburgh, 1838-43), iv, p.125, quoted in Janet Semple,

Bentham’s Prison, Oxford: Clarendon Press, 1993, p.137.

2Charles W. Thomas, ‘Private Prisons Succeed’, Washington, D.C: National Center for Policy Analysis, 1995.

3‘Failing jail put out to tender’, The Times, 11 July 2000, p.4.

4National Audit Office, ‘PFI: Construction Performance’, HC 371, 2002-2003, par.2.22.

5National Audit Office, ‘The Refinancing of the Fazakerley PFI Prison Contract’, HC 584, 1999-2000, 29 June

2000, par.1.9.

6National Audit Office, ‘Control of Prison Building Projects’, HC 595, 1993-94, 20 July 1994.

7National Audit Office, ‘The PFI Contracts for Bridgend and Fazakerley Prisons’, HC 253, 1997-98, 31

October 1997, pp.44-45.

8National Audit Office, ‘Control of Prison Building Projects’, 1994; National Audit Office, ‘The PFI Contracts

for Bridgend and Fazakerley Prisons’, 1997; PriceWaterhouseCoopers, ‘Financial Review of Scottish Prison

Service Estates Review’, 2002; and various Prisons Inspectorate reports.

9National Audit Office, ‘Control of Prison Building Projects’, 1994.

10See, for example, Howard League, ‘A Decade of Private Prisons: Financial Failure, Political Distraction’,

Press Release, 29 April 2002, Notes.

11See, for example, HM Prison Service for England and Wales, ‘Annual Report and Accounts 2000-2001’,

Appendix 3, n.4.

12National Audit Office, ‘The PFI Contracts for Bridgend and Fazakerley Prisons’, 1997.

13Construction Industry Council, ‘The Role of Cost Saving and Innovation in PFI Projects’, London: Thomas

Telford Publishing, 2000, p.70.

14‘The Refinancing of the Fazakerley PFI Prison Contract’, House of Commons Committee of Public

Accounts, Thirteenth Report, 26 March 2001, paragraph 26.

15PriceWaterhouseCoopers, ‘Financial Review of Scottish Prison Service Estates Review’, 2002, p.6.

16‘Report on the Prison Estates Review’, Justice Committee 1, Scottish Parliament, Sixth Report, 2002,

Volume 1, paragraph 181; Mouchel Consulting, ‘Alternative Types of Prisons: Final Report to HM Prison

Service’, March 2000. Only a few pages of the Mouchel report have been released.

17HM Inspectorate of Prisons for Scotland, ‘Report on HM Prison Kilmarnock’, July 2000, par.1.5.

18The latest of these was Isabelle Park, ‘Review of Comparative Costs and Performance of Privately and

Publicly Operated Prisons 1998-99’, 23 March 2000.

19Operating costs included some minor capital items such as kitchen and medical equipment, but new

works and major refurbishment were excluded. Overheads were allocated to the individual prisons but

policy functions were not allocated.

20Park, ‘Review of Comparative Costs. . .’, 2000, p.21.

21Carla Andrewes, ‘Contracted and Publicly Managed Prisons: Cost and Staffing Comparisons 1997-98’,

Home Office, March 2000, p.1.

22Andrewes, ‘Contracted and Publicly Managed Prisons’, 2000, p.3.

23In 1996, the Prison Reform Trust accepted that in light of overcrowding, cost per prisoner was the better

figure. See Prison Reform Trust, ‘Privately Managed Prisons: At What Cost?’, London, January 1996, par.27.

24Home Secretary’s Speech, Prison Officers’ Association Conference, 19 May 1998, par.30.

25Alan Travis, ‘Privatisation of the Penal System may not be the Answer’, The Guardian, 12 July 2001; Her

Majesty’s Prison Service, ‘Prison Service to Run Manchester and Blakenhurst Prisons’, Press Release 12

January 2001.

26Martin Narey, Evidence before House of Commons Home Affairs Committee, 4 December 2001, Answer

to Question 142. The saving in the first year of was £350,000 on a total value of £30 million – Richard Ford,

‘Group 4 Loses Prison Contract’, The Times, 23 October 1999; ‘Private Jails Face Contract Battle’,

Birmingham Post, 23 October 1999.

27HM Prison Service, ‘In-House Team to Run Manchester Prison’, Press Release, 15 July 1993.

28These estimates are based on the latest cost per prisoner, and certified places and current prisoner

numbers for each of the contract and PFI prisons taken from the annual reports of HM Prison Service, with

estimated savings for each of these prisons based on information publicly available from the Prison

Service, National Audit Office, Home Office and various consultants’ reports. Overcrowding has been taken

into account over the life of each contract. The total includes operating savings from the contract prisons,

but operating and capital savings (annualised) from PFI prisons. It has been assumed that cost reductions

in the three prisons that were market-tested but won by the public sector, were also the result of

competition.

29Comptroller and Auditor General, ‘Wolds Remand Prison’, London: HMSO, 1994; House of Commons,

Session 1994-95, Committee of Public Accounts, Sixth Report, ‘Wolds Remands Prison’, HC 138, 1995, par.

2(xii).

30Stephen Pryor, ‘The Responsible Prisoner’, Autumn 2001, p.68, located on the website of HM

Inspectorate of Prisons under ‘Thematic Reviews’.

31Planning Group, HM Prison Service, ‘Weighted Scorecard’, Quarters 1, 2 & 3, 2002-2003.

32Andrewes, ‘Contracted and Publicly Managed Prisons’, 2000, p.10.

33Justice Forum & Centre for Public Services, ‘Privatising Justice: The Impact of the Private Finance

Initiative in the Criminal Justice System’, March 2002, p.37.

34Hansard, 6 May 2003, Written Answers.

35Erwin James, ‘Does prison work?’, The Guardian, 29 January 2001, G2, p.4.

36Keith Bottomley, Adrian James, Emma Clare and Alison Liebling, ‘Monitoring and Evaluation of Wolds

Remand Prison’, A Report for the Home Office Research and Statistics Directorate, 1997, p.32, 34.

37HM Inspectorate of Prisons for England and Wales, ‘Report on a Full Inspection of HM Prison The Wolds’,

2-6 November 1998, p.7.

38Frances Crook, Editorial, The Howard League Magazine, Volume 20, No.2 (May 2002), p.2.

39Howard League, ‘A Decade of Private Prisons: Financial Failure, Political Distraction’, Press Release, 29

April 2002.

40Prison Reform Trust, ‘Wolds Remand Prison Contracting Out: A First Year Report’, London, April 1993,

par. 1.18.

41Mick Ryan, ‘Why Lord Woolf is wrong about private prisons, and many other issues’, The Howard League

Magazine, Vol.20 No.2 (May 2002), p.7.

42HM Inspectorate of Prisons, ‘Report on . . . The Wolds’, 1998, p.7.

43HM Inspectorate of Prisons for England and Wales, ‘Report on a Short, Unannounced Inspection of HM

Prison Blakenhurst’, 5-7 October 1998, paragraph 4.13.

44HM Inspectorate of Prisons for England and Wales, ‘Report on a Full, Announced Inspection of HM

Prison Blakenhurst’, 22-26 January 2001.

45HM Inspectorate of Prisons for England and Wales, ‘Report on a Short Unannounced Inspection of HMP

& YOI Doncaster’, 3-5 November 1998, p.6.

46HM Inspectorate of Prisons for England and Wales, ‘Report on an Announced Inspection of HMP & YOI

Doncaster’, 17-20 April 2001, p.3.

47HM Chief Inspector of Prisons for England and Wales, ‘Annual Report 1999-2000’, p.25.

Footnotes

49

Competition: a catalyst for change in the prison service

48HM Inspectorate of Prisons for England and Wales, ‘Report on a Short Unannounced Inspection of HM

Prison and YOI Parc’, 5-7 September 2000.

49HM Inspectorate of Prisons for England and Wales, ‘Report on a Full Unannounced Inspection of HMP

Parc’, 9-13 September 2002.

50HM Inspectorate of Prisons for England and Wales, ‘Report on a Full Announced Inspection of HM Prison

Altcourse’, 1-10 November 1999, pp.7-8.

51HM Inspectorate of Prisons for England and Wales, ‘Report on a Full Announced Inspection of HM Prison

Lowdham Grange’, 22-26 November 1999, pp.6-7, 13-14.

52HM Inspectorate of Prisons for Scotland, ‘Report on HM Prison Kilmarnock’, July 2000, pars.13.1 & 13.2.

53HM Inspectorate of Prisons for Scotland, ‘Annual Report 2001-2002’, September 2002, pp.19-21.

54HM Inspectorate of Prisons for England and Wales, ‘Report on a Full Announced Inspection of HMP and

YOI Ashfield’, 1-5 July 2002.

55HM Inspectorate of Prisons for England and Wales, ‘Report on a Full Announced Inspection of HM Prison

and Young Offender Institution Forest Bank’, 17-21 June 2002, p.3.

56Boards of Visitors, ‘Annual Reports’ for Wolds 2000 and 2001, Altcourse 2000, and Ashfield 1999-2000

and 2000-2001.

57The Scottish Executive, ‘Scottish Prison Service Estate: Consultation Paper’, 2002, p.28.

58M.J. Gilbert, ‘The Illusion of Structure: A Critique of the Classical Model of Organisation and the

Discretionary Power of Correctional Officers’, 22 (1997) Criminal Justice Review 1:49-64 at 59, quoted in

Alison Liebling & David Price, The Prison Officer, Waterside Press, 2001, p.113.

59Bottomley et al, ‘Monitoring and Evaluation of Wolds Remand Prison’, 1997, p.43.

60One document where the early stages of this revolution can be traced is Bottomley et al, ‘Monitoring

and Evaluation of Wolds Remand Prison’, 1997.

61HM Inspectorate of Prisons for England and Wales, ‘Report on . . . The Wolds, 1998, p.8.

62HM Inspectorate of Prisons for England and Wales, ‘Report on . . . HM Prison Altcourse’, 1999, p.13.

63HM Inspectorate of Prisons for Scotland, ‘Report on HM Prison Kilmarnock’, 2000, pars.4.8, 10.2, 13.14

& Appendix I.

64Bottomley et al, ‘Monitoring and Evaluation of Wolds Remand Prison’, 1997, pp.38-9.

65HM Inspectorate of Prisons for Scotland, ‘Report on HM Prison Kilmarnock’, 2000, par.5.11.

66HM Inspectorate of Prisons for England and Wales, ‘A Second Chance: A Review of Education and

Supporting Arrangements within Units for Juveniles managed by HM Prison Service’, 2001-2002, p.27.

67National Advisory Council for the Boards of Visitors of England and Wales, ‘Report on Income

Generation’, London: Boards of Visitors, June 1998, Appendix II.

68HM Chief Inspector of Prisons for England and Wales, ‘Annual Report 2001-2002’, p.54.

69HM Inspectorate of Prisons for England and Wales, ‘Report on . . . HM Prison Altcourse’, 1999, p.13.

70HM Inspectorate of Prisons for England and Wales, ‘Report on . . . HM Prison Lowdham Grange’, 1999,

p.10.

71HM Inspectorate of Prisons for Scotland, ‘Report on HM Prison Kilmarnock’, 2000, par.3.2.

72HM Chief Inspector of Prisons for England and Wales, ‘Annual Report 2001-2002’, p.55.

73HM Chief Inspector of Prisons for England and Wales, ‘Annual Report 2001-2002’, p.56.

74Mike Newell, President of the Prison Governors’ Association, ‘Privatisation – the morale sapping

sledgehammer’, The Howard League Magazine, Vol.20 No.2 (May 2002), p.13.

75HM Chief Inspector of Prisons for England and Wales, ‘Annual Report 1996-97’.

76HM Chief Inspector of Prisons for England and Wales, ‘Annual Report 2001-2002’, p.56.

77HM Chief Inspector of Prisons for England and Wales, ‘Annual Report 2001-2002’, p.14; HM Inspectorate

of Prisons for England and Wales, ‘Report on . . . HMP & YOI Doncaster’, 2001, p.116.

78HM Inspectorate of Prisons for Scotland, ‘Report on HM Prison Kilmarnock’, 2000, par.4.44.

79HM Chief Inspector of Prisons for Scotland, ‘Annual Report 2001-2002’, September 2002, p.20.

80HM Chief Inspector of Prisons for Scotland, ‘Annual Report 2001-2002’, September 2002, p.61.

81Patrick Carter, ‘Review of PFI and Market Testing in the Prison Service’, January 2001, p.5.

82HM Inspectorate of Prisons for England and Wales, ‘Report on . . . HMP and YOI Forest Bank’, 2002, p.8.

83HM Inspectorate of Prisons for England and Wales, ‘Report on . . . HM Prison Altcourse’, 1999, p.14.

84HM Inspectorate of Prisons for Scotland, ‘Report on HM Prison Kilmarnock’, 2000, par.8.65.

85HM Inspectorate of Prisons for England and Wales, ‘Report on an Unannounced Follow-up Inspection of

HM Prison Buckley Hall, 5-7 January 2000, p.4.

86Stephen Pryor, ‘The Responsible Prisoner’, Autumn 2001, p.68.

87HM Chief Inspector of Prisons for England and Wales, ‘Annual Report 1996-97’.

88HM Inspectorate of Prisons for England and Wales, ‘Report on . . . HM Prison Buckley Hall, 2000, pp.3-4.

89HM Inspectorate of Prisons for England and Wales, ‘Report on . . . HM Prison Altcourse’, 1999, p.65.

90John D. Donahue, The Privatization Decision: Public Ends, Private Means, New York: Basic Books Inc,

1989, p.78.

91Mick Ryan, ‘Privatisation, Corporate Interest and the Future Shape and Ethos of the Prison Service’, in

Privatisation and Market Testing in the Prison Service, London: Prison Reform Trust, 1994, p.9.

92Commission on Public Private Partnerships, Building Better Partnerships, London: Institute for Public

Policy Research, 2001, p.42.

93National Audit Office, ‘PFI: Construction Performance’, HC 371, 2002-2003, 5 February 2003, par.1.16.

94Stephen Pryor, ‘The Responsible Prisoner’, 2001, p.104.

95Stephen Pryor, ‘The Responsible Prisoner’, 2001, p.68.

96HM Inspectorate of Prisons for England and Wales, ‘Report on . . . HM Prison The Wolds’, 1998, p.9.

97HM Inspectorate of Prisons for Scotland, ‘Report on HM Prison Kilmarnock’, 2000, par.4.6.

98Stephen Pryor, ‘The Responsible Prisoner’, 2001, p.104.

99Stephen Pryor, ‘The Responsible Prisoner’, 2001, p.69.

100HM Chief Inspector of Prisons for England and Wales, ‘Annual Report 1998-99’.

101HM Inspectorate of Prisons for Scotland, ‘Report on HM Prison Kilmarnock’, 2000, pars.4.6, 9.10-15.

102HM Chief Inspector of Prisons for England and Wales, ‘Annual Report 1998-99’.

103Lord Laming of Tewin, ‘Modernising the Management of the Prison Service’, Home Office, 2000, pp.3,

14.

104HM Inspectorate of Prisons for England and Wales, ‘Report on . . . HM Prison Altcourse’, 1999, p.8.

105Al Gore, The Gore Report on Reinventing Government, New York: Time Books, 1993, pp.2-3.

106Stephen Pryor, ‘The Responsible Prisoner’, 2001, p.104.

107Ross M. Stolzenberg, Sandra H. Berry, ‘A Pilot Study of the Impact of OMB Circular A-76 on Motor

Vehicle Maintenance Cost and Quality in the US Air Force’, R-3131-MIL, Prepared for the Office of the

Assistant Secretary of Defense/Manpower, Installations and Logistics, Santa Monica, California: Rand,

February 1985.

108Bottomley et al, ‘Monitoring and Evaluation of Wolds Remand Prison’, 1997, p.19.

109Stephen Pryor, ‘The Responsible Prisoner’, 2001, p.69.

110Bottomley et al, ‘Monitoring and Evaluation of Wolds Remand Prison’, 1997, p.26.

111HM Inspectorate of Prisons for England and Wales, ‘Report on . . . HM Prison The Wolds’, 1998, p.13.

112Jason Burke, ‘Officer, it’s now Mister to you’, Observer, 20 May 2001, p.1; Vikram Dodd, ‘Prisoners to be

put on first name terms’, Guardian, 21 May 2001, p.5; Richard Ford, ‘Speech by jails chief barred because of

election’, Times, 24 May 2001, p.2.

113This problem is dealt with at Bottomley et al, ‘Monitoring and Evaluation of Wolds Remand Prison’,

1997, pp.30-31. See also HM Inspectorate of Prisons in Scotland, ‘Report on HM Prison Kilmarnock’, 2000,

par.4.2.

114HM Inspectorate of Prisons for England and Wales, ‘Report on . . . HM Prison Buckley Hall’, 2000, p.3.

Stephen Pryor also reported this practice of prisoners in privately-managed prisons referring to the

publicly-managed prisons as ‘POA prisons’ - Stephen Pryor, ‘The Responsible Prisoner’, 2001, p.83.

115Martin Narey, Evidence before House of Commons Home Affairs Committee, 4 December 2001, Answer

to Question 143.

116National Audit Office, ‘The PFI Contracts for Bridgend and Fazakerley Prisons’, 1997, pars.2.24-2.25.

117National Audit Office, ‘The PFI Contracts for Bridgend and Fazakerley Prisons’, 1997, par.2.21.

118National Audit Office, ‘The PFI Contracts for Bridgend and Fazakerley Prisons’, 1997, par.3.2.

119Construction Industry Council, ‘The Role of Cost Saving and Innovation in PFI Projects’, 2000, p.71.

120HM Inspectorate of Prisons for England and Wales, ‘Report on . . . HM Prison Altcourse’, 1999, p.60.

121HM Inspectorate of Prisons for England and Wales, ‘Report on . . . HM Prison Altcourse’, 1999, p.60

122HM Inspectorate of Prisons for Scotland, ‘Report on HM Prison Kilmarnock’, 2000, par.3.23.

123HM Inspectorate of Prisons for England and Wales, ‘Report on . . . HMP & YOI Doncaster’, 2001, p.115.

124Andrewes, ‘Contracted and Publicly Managed Prisons’, 2000, p.1.

125Lord Laming, ‘Modernising the Management of the Prison Service’, 2000, p.19.

126Carter, ‘Review of PFI and Market Testing in the Prison Service’, 2001, p.3.

127Martin Narey, Evidence before House of Commons Home Affairs Committee, 4 December 2001, Answer

to Question 142. See also Narey’s comment in Rachel Sylvester, ‘The prisons chief who learned his lesson

behind bars’, The Daily Telegraph, 10 February 2001, p.14.

128Newell, ‘Privatisation. . .’, The Howard League Magazine, (May 2002), p.13.

129HM Inspectorate of Prisons for England and Wales, ‘Report on . . . HM Prison The Wolds’, 2001, pp.11-

12.

130Stephen Pryor, ‘The Responsible Prisoner’, 2001, p.69.

131Stephen Pryor, ‘The Responsible Prisoner’, 2001, p.68.

132Bottomley at al, ‘Monitoring and Evaluation of Wolds Remand Prison’, 1997, p.48.

133Quoted in the supporting papers to Stephen Pryor, ‘The Responsible Prisoner’, 2001, p.104.

50

Competition: a catalyst for change in the prison service

134Lord Laming, ‘Modernising the Management of the Prison Service’, 2000, p.13.

135Prison Service Pay Review Body, ‘Second Report on England and Wales’, Cm5719, February 2003, p.21;

Carla Andrewes, ‘Contracted Prisons: Cost and Staffing Comparisons 1996-97’, Home Office, March 1999,

p.9.

136Lord Laming, ‘Modernising the Management of the Prison Service’, 2000, pp.12-13.

137Lord Laming, ‘Modernising the Management of the Prison Service’, 2000, pp.17.

138HM Inspectorate of Prisons for Scotland, ‘Report on HM Prison Kilmarnock’, 2000, par.9.34.

139Stephen Pryor, ‘The Responsible Prisoner’, 2001, p.104.

140Carter, ‘Review of PFI and Market Testing in the Prison Service’, 2001, p.8.

141The Scottish Executive, ‘Scottish Prison Service Estate: Consultation Paper’, 2002, p.27.

142Andrewes, ‘Contracted Prisons: Cost and Staffing Comparisons 1996-97’, 1999, p.11.

143Andrewes, ‘Contracted and Publicly Managed Prisons’, 2000, p.10.

144The Scottish Executive, ‘Scottish Prison Service Estate: Consultation Paper’, 2002, p.27.

145Prison Service Pay Review Body, ‘Second Report on England and Wales’, 2003, pp.18-19.

146Prison Service Pay Review Body, ‘Second Report on England and Wales’, 2003, p.18.

147The Prison Service Pay Review Body reports an effective turnover rate of 10.4 percent, compared with

15 percent for the UK in general and 13.3 percent for public sector. See Prison Service Pay Review Body,

‘Second Report on England and Wales’, 2003, p.15.

148See Prison Service Pay Review Body, ‘Second Report on England and Wales’, 2003, p.14.

149Prison Service Pay Review Body, ‘Second Report on England and Wales’, 2003, p.18.

150Bottomley et al, ‘Monitoring and Evaluation of Wolds Remand Prison’, 1997, p.17.

151Prison Service Pay Review Body, ‘Second Report on England and Wales’, 2003, p.19; HM Inspectorate of

Prisons, ‘Report on . . . HMP and YOI Ashfield’, 1-5 July 2002, p.5; HM Inspectorate of Prisons, ‘Report on . .

. HMP Parc’, 9-13 September 2002, p.4.

152Institute for Public Policy Research, ‘Building Better Partnerships’, 2001, pp.91&177.

153Institute for Public Policy Research, ‘Building Better Partnerships’, 2001, p.91.

154HM Inspectorate of Prisons for England and Wales, ‘Report on . . . HM Prison The Wolds’, 1998, p.9.

155Lord Laming, ‘Modernising the Management of the Prison Service’, 2000, p.5.

156HM Inspectorate of Prisons for England and Wales, ‘A Second Chance. . . ’, 2001-2002, p.45.

157HM Inspectorate of Prisons for England and Wales, ‘Report on . . . HM Prison Altcourse’, 1999, p.12.

158Stephen Pryor, ‘The Responsible Prisoner’, 2001, p.68.