The Ministry of Justice has run out of money. If it were a business, it would have to declare itself insolvent. If it were a local authority, its members would be be liable to disqualification. But don't worry: it's only a Government Department, and you, dear reader, will keep the MoJ going, come what may!
The MoJ's increasing financial desperation is the story of austerity across the public sector. Can spending possibly be cut further? Has austerity simply run out of road?
Let's go back to the 2015 Spending Review. By 2015, the last Justice Secretary but 4 - or is it 5? - Greying or Failing, some such name - had already made unprecedented deep cuts, getting rid of 1 in 4 prison officers, closing 20 prisons (though without reducing the prison population), cutting prison officer starting pay, and cutting the probation service into many pieces and flogging off half it, closing over 100 courts.
Then, in SR 2015, the then Justice Secretary - some bloke called Glove or Rover, possibly? - promised still further heroic cuts, in return for massive spending upfront (1). Given £700m to 'modernise' courts, MoJ would save £200m a year by 2019-20; given £1,3bn to build 9 new prisons, it would save £80m a year by closing old ones, plus an unspecified amount from escorting contracts, as more court cases were dealt with by video links to prisons, instead of actual physical presence.
That has now all unraveled pretty much completely.
First, it was found that the earlier cuts had gone too far - prisons were spiraling out of control and it was impossible to recruit and retain staff. So the cuts were partly reversed, though the larger part remains in place (2).
Then it was found that the new probation service contracts weren't sustainable, and it became necessary to pay the operating companies more that the contracts specified (3).
So the SR 2015 figures had to be revised upwards for the 2017-18 budget (4).
Then the 9 prison building programme fell apart. Not one brick has been laid. The programme is now so delayed that no prisons will be fully operational by 2020, perhaps two fully operational in 2022 (5). As a result, running costs can't be reduced. indeed for the next 5 years, running costs must increase, because of double running and transitional costs of closures (6). [Edit: looking back, I see that in my time, we managed to open eight new prisons in just four years. But that was using PFI, which we now realise, was entirely wicked, neo-liberal, useless - unless, that is, you really, really need prisons built quickly].
But the reality is that closures of any kind look increasingly problematic. On MoJ's own projections, there will be 1,700 more prisoners in 2021 than there were in 2017. And there is a 1 in 3 chance that that will actually be 2,600 more (7). Well, 2 new prisons should do it – if heavily overcrowded from day 1. But of course, MoJ won't have the money to run them, because you can no longer close the old ones. Meanwhile capital funding, unused because of the slippage, was diverted to meet MoJ's higher than budgeted running costs.
Then the court 'modernisation' programme turned out to cost more than expected, helping to cause an overspend in 2017-18 (8). And according to the NAO, the planned savings from the programme are now looking.....dubious. So, more expense, but possibly less savings (9).
Moreover, there is growing evidence that obliging more defendants to accept court appearance via video links instead of being physically present - a vital element in MoJ's planned savings both in court escort contracts and court management - may in various ways disadvantage the defendant and result in serious, institutionalised injustice (10).
Then, pay: SR 2015 budgeted 1% for pay inflation but MoJ smashed the 1% ceiling with a 1.7% settlement for prison officers last year - and does anyone seriously think the POA can be shoved back within a 1% ceiling this year, or next? But where will the money for more than 1% come from? Hardly 'efficiencies' - those have all gone to pot.
Meanwhile, there were other pressures: delays in implementing new fees, demand for legal aid up. It's all very difficult, Minister!
Thus the original budget for 2017-18 had to be increased during the year by half a billion pounds (8).
(I daresay many local authorities would like the opportunity be able to go back to Treasury in year with their bowl: “Please Sir, can I have some more?” But Government reserves that right to itself).
And MoJ is still unable to say just how much it will spending this year, 2018-19: it is still busy discussing things with Treasury. We'll let you know later what we need, MoJ's Permanent Secretary tells us – and Parliament. The Estimate says £6.9bn (11): my guess would be the final figure will be around £7.4bn.
The steady upward drift of MoJ spending plans since SR 2015 can be put thus:
2017-18 2018-2019 2019-20
SR 2015* 6.7 6.2 6.0
budget 2017* 7.0 6.6 6.4
Est 2017-18 7.8
2018-19 6.9 (prov)
Actual 7.4 (??my guess)
Note * These figures were published excluding depreciation: I've added £400m, about the average in the accounts for depreciation, to make them comparable with the other figures).
Thus, the MoJ is now plainly totally adrift from plans agreed in the last SR. What next?
Well, the real terms cut in MoJ spending since 2010-11 has been in the region of 20-25%. The cost of those cuts is that the reasonably decent prisons and probation services we had in 2010 have been devastated, violence in prisons has doubled, self-harm has doubled, maintenance contracts in prisons have collapsed, Inspectors report widespread, unacceptable failure of both prisons and probation services, 100 barristers chambers are boycotting legal aid work, 258 courts have closed. All informed people (outside of the MoJ, naturally) agree that the entire criminal justice system of this country has been very seriously damaged by years of cuts.
Surely austerity must now have run its course.
Except that the criminal justice system is very unlike the NHS, or schools, or social care in one crucial respect, when it comes to spending. Demand can in part be controlled – as it cannot, realistically, for hospitals or schools or social care.
Not only that, it should be controlled. Since the mid 1990s, the prison population has doubled: at just the point where crime has halved. (For an account of why we can be sure rising prison numbers did not cause crime to fall, see below, http://www.julianlevay.com/articles/doubling-prison-numbers-did-not-halve-crime ). We have been building prisons almost without a break for a quarter of a century, opening 31 new prisons, and building around 25,000 places within existing prisons. Building has cost some £3bn, enough to build 25,000 new homes. Running costs have risen by over a £1bn a year, enough to recruit 40,000 extra teachers or nurses. And all this spending has precious little good: over-crowding is not reduced, re- offending rates have barely budged. Yet community punishments are much cheaper than imprisonment and in many cases, achieve just as much.
Government can reduce use of imprisonment. It has been done before - by Tory Home Secretaries (12).
If then, why not now?
(1) Spending Review and Autumn Statement 2015, HMT Nov 2017 Cm 9162
(2) Financial Times, Nov 2, 2016. Hilariously, Tory Justice Ministers have to make sure they never admit they are doing this because they cut too deep in the first place, oh no. Less hilarious is the grotesque misrepresentation of this partial restoration of a cut as an increase or additional staff, though in fact numbers will remain about 15% lower than in 2010. That's still a cut or fewer staff. These people will share the same circle of Hell as estate agents. (Actually, they probably were estate agents.)
(3) See NAO investigation here: https://www.nao.org.uk/wp-content/uploads/2017/12/Investigation-into-changes-to-Community-Rehabilitation-Company-contracts.pdf
(4) Autumn budget 2017: https://www.gov.uk/government/publications/autumn-budget-2017-documents/autumn-budget-2017
(5) Latest information is that work will begin in November 2018. A large prison cant be built and made fully operational within 25 months.
(6) See my report for the Prison Reform Trust: http://www.prisonreformtrust.org.uk/Portals/0/Documents/Julian%20Le%20Vay%20paper%20FINAL.pdf. In fact, the new prisons wont open before 2021 and that is outwith the period of the SR 2015 settlement, so the issue of how these costs are to be funded has yet to be addressed.
(7) See tables at https://www.gov.uk/government/statistics/prison-population-projections-ns
(8) MoJ Memorandum on Supplementary Estimate 2017-18, 7.2.18
(9) See National Audit office investigation here: https://www.nao.org.uk/report/early-progress-in-transforming-courts-and-tribunals/
(10) An important issue exposed by Penelope Gibbs, whose article I republished with permission here:
(11) See MoJ's Memorandum on the 2018-19 Estimates here:
(12) In the wake of the catastrophic riots of 1990, and the Woolf report, Tory Home Secretaries Kenneth Baker and Kenneth Clarke reduced the prison population by 4,000, by encouraging use of community sentences, enabling the closure of 2 small prisons. Then Michael Howard discovered that 'prison works', and Jack Straw agreed, triggering the steepest rise in numbers in history, with consequences we are still grappling with.
I was formerly Finance Director of the Prison Service and then Director of the National Offender Management Service responsible for competition. I also worked in the NHS and an IT company. I later worked for two outsourcing companies.
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