How could it take the Serious Fraud Office 7 years to decide NOT to prosecute G4S for a £100m fraud against the tax payer?
Of course, the SFO is a byword for delay "For a thousand years in thy sight are but as yesterday when it is past". But even so...in this case, one of the most uncomplicated frauds one can imagine (2 contracts, one customer, one jurisdiction): 7 years? Longer than WW2?
There's a clue in the hearing a year ago on the agreement not to prosecute SERCO for a similar offence. "The SFO has argued that the public interest would not be served by [SERCO] being debarred from...any government procurement excercise...This would be the consequence....were there to be a conviction...." The SFO ie the MoJ had been desperately seeking ways to AVOID prosecution - because they need them as much as SERCO/G4S need Government.
Too big to fail = too big to prosecute. Beyond the law. Outsourcing has corrupted the British State.
Richard Heaton, Permanent Secretary of the MoJ, appeared before the Public Accounts Committee on 29 June to give account for his Department’s failures on management and expansion of the prison estate, set out in a recent National Audit Office report. The Chair and a member of the Justice Committee also attended, a useful innovation, since there is so much common interest.
Heaton was accompanied by the Chief Exec of HMPPS and the Deputy Director of Prison Maintenance and Change. He did not bring his FD, Mike Driver, surprisingly, since the talk was largely about money. [But perhaps someone had recalled that at a previous session, Driver told a gobsmacked Justice Committee “I would say that we have a very good financial management regime within the organisation.” That would not have gone down well on this occasion.]
The hearing was never going to be easy. Because what the NAO reported was that prisons remain dangerously overcrowded, with a big mismatch between the type and location of available and places needed, that the programme to create 10,000 new places by 2020 had created precisely 206 places, with not one new prison opened, that a ballooning budget deficit of near £1bn a year had meant available capital had to be switched to current, that plans to close old prisons with poor conditions had almost entirely failed, that MoJ had failed to keep pace with a rising backlog of essential maintenance, so that an increasing number of places had to be taken out of use while conditions in many prisons were appalling, and that contracting of FM had been an unmitigated disaster ending with the collapse of Carillion, and all this while prisons were less safe, less decent than they had been for many decades.
Now you might think that if that was the wicket you were going in to defend, you’d have sent hours and hours mastering the facts, preparing your response to the inevitable criticism and to shoulder responsibility for this avalanche of failures.
But not Richard Heaton.
In all my years as a civil servant, and my own appearances before the PAC and other Committees, I have never seen anything remotely like it. Heaton had not mastered quite basic facts, did not appear to feel that he personally had anything to answer for, did not seem to think that anything – including the Committee- mattered very much.
He was not, however, short on explanations for all these disasters. Turns out that it was either all someone else’s fault – impliedly, his immediate predecessor, Ursula Brennan's - or alternatively, the fiscal equivalent of the wrong sort of snow. Here is the complete list of his excuses:
“My predecessors landed me with this shit” plus “Fate was unkind to me”. Not me, Guv!
Heaton has obviously never heard the maxim that when things have gone really badly wrong, 10 excuses are 10 times less credible than 1. Or that the most powerful defence in the language is, “I’m sorry, I got it wrong”.
When Shabana Mahmood rightly pressed him to be a bit more precise about how the Department came to get so many things so wrong, Heaton replied: “Maybe we suffered from group think…maybe we were not rigorous enough, maybe our forecasting was not good enough, but without a historical exegesis…I do not think I can be more precise than that”. The mandarin equivalent of ‘whatev’. But I do believe him. I do accept that he is quite unable to be more precise.
For indeed Heaton is not a man for detail. How many places would the 4 new prisons just announced give? How many prisons hold women? Could MoJ do lease back of new prisons? How much had he got for Holloway? Don’t ask me. Why did you underspend on maintenance by £24m? The answer: “..we did not see the figure. We just cannot [inaudible] where the underspend was”. Don’t ask me, I’m only the Accounting Officer. If all his evidence had been inaudible, we might be better informed.
His language was striking. Heaton seemingly wishes to appear hip, relaxed, casual, none of that old-world Sir Humphrey stuff. In so doing, he seemed to me to signal a fundamental lack of seriousness and respect. The FM and probation contracts were ‘kind of doomed’. Oh, well, that’s really helpful. The 2019 budget “gave us the money we needed to keep the lights on” and “a good slug of capital” (Heaton the fiscal alcoholic. “Gimme anther slug, willya. And leave the bottle!”)
When it comes to the future – which Heaton much prefers talking about than all that dead old history, man – Heaton is as rhapsodic about the wonders to come as he is short on details, such as when, or at what cost, or what risk. The Justice Committee chair, pressing him, says ‘There’s no overarching strategy for dealing with any of these things, is there?’ Heaton replies that the Committee has had ‘the ingredients of a strategy’ and that “I hope you would not observe a lack of strategy if you were to revisit this, I say in 6 months” i.e. after I’ve escaped. Towards the end Heaton became quite the visionary: he hoped MoJ would carry on way beyond the 10,000 new places, building more and more prisons…glorious. (No sense at all of the fiscal, social indeed moral case for not having more and more prisoners. Or of the long experience that if you build more capacity, some politician will fill it up again, and then overfill it.)
Heaton has however given us more insight into the extraordinary catalogue of failures in MoJ in recent years than he thinks. An organisation headed by such a man, a man without the least concept of what leadership entails, a man so disdainful of detail, so unable to take personal responsibility, could never flourish. The MoJ rotted from the top down.
The story extends to two other serious failures.
As ever when someone fails in a job by so wide a margin, questions must be asked about those who appointed him – and who kept him in office when it was clear it was quite beyond him: Cabinet Secretaries Jeremy Heywood and Mark Sedwill. Why did Heywood appoint someone so unsuitable by reason of his experience – Heaton was a Government lawyer of no real management experience – and temperament, to a massively difficult management job, £8bn complex spend and a huge variety of services, employing 70, 000 or so staff right across the UK?
This is more than bad judgement in one case. The mandarinate have never really squared two completely different jobs at Permanent Secretary level: giving advice to Ministers (not that they seem to want it much, nowadays) and dealing with Parliament, media etc on the one hand, and managed huge, complex, costly public services under great stress. The Agency concept was an attempted solution: separate the two out. That worked well until MoJ brought all the corporate and support services, including procurement, back to the centre of MoJ, with on the whole, bad results. This matters: insiders tell me of crucial discussions about funding andmanagement of prisons from which those with operational experience were excluded. And I know from my own time how necessary their input was when the going got tough.
Second, there is another failure here: the failure of the PAC and Justice Committees to do their jobs. As an interrogation of the chief of Department where financial control has broken down, where public services had been badly damaged, where contract after contract has gone bad, their sessions were laughably shallow. As I have noted before (1), this is partly this is the inevitable result of rushing through so many inquiries in a Session, and of interrogation by a Committee of members, each with their own personal interests and issues. It is also the case that so long as Committees only call those currently in post, and absolve their predecessors, it will be to easy to maintain, as Heaton did, that it was all the fault of those who came before, and that all he did was try to clear up the appalling mess they left, disgusting, isn’t it, some people! Committees should have power to call predecessors in post (but then they’d have to call Grayling, wouldn’t they?). It would have been interesting, for example, to hear Ursula Brennan's response.
And that exposes a delicate cultural issue too. The PAC has the reputation for being fearsomely tough and critical. And appearing before it is quite a challenge. But I’ve noticed again and again, how Committee members, especially chairs, seem to want to avoid too direct a challenge. I noted that in my book, regarding the misappropriation of £200m by SERCO/G4S (1). I note it again here. Here’s the chair to Heaton: “glad to hear you are so upbeat” and offering him “muted congratulations from the PAC” (for what!?). And then cutting off Mahmood, who seems one of the sharper minds on the Committee, in mid-sentence as she told Heaton that MoJ’s litany of failures were ‘inexplicable’: “I think, Ms Mahmood, this is also about, once a mistake is made, how long it takes to unpick it, which is a salutary lessons for Whitehall and Westminster indeed”.
“Whitehall and Westminster indeed”. Indeed. As I have often noted, for all the conflict that their can be between Ministers and top civil servants, there is also a profound and (for the laity) sinister congruence of interests. Neither are keen for awkward truths to get out, or to spend too much time analysing the fruits of their actions and decisions. That was surely the real burden of ‘Yes Minister’. It is the price we pay for not separating out Executive and Legislature. Not much less than afifth of MPs are the Government payroll - and maybe another fifth hope to be soon. The watchdog is self-neutering.
In talking of Heaton’s and the MoJ’s failure, I do not - of course - suggest that failing is in itself morally blameworthy. I am not Michael Howard. Anyone who thinks they’ve never failed is a dangerous fool. In my book, and since, I’ve made it clear that I made mistakes in my time. The question is, do you scrutinise your own record, do you own your failure, do you show remorse, do you put it right, do you learn. I don’t think, on this showing, that any of those things can really be said of Heaton.
Heaton will shortly, leaving almost every part of the justice system in a worse state than it has been in living memory. Likely he will be replaced by some creature of Cummings choosing. MoJ must be dreading his or her arrival. But then, could they really do any worse?
(1) My book, ch. 5
Robert Buckland is going to build another 4 prisons. Unfortunately, he has forgotten quite why.
A degree of amnesia is perhaps understandable. A succession of Tory Ministers has been announcing plans to build 10, 000 new prison places for such a long time, it’s almost become a ritual divorced from reality, like Harvest Supper.
Let’s help restore that memory!
Nearly 5 years ago, Michael Gove announced plans to build 10, 000 new places in 9 new prisons. That would have allowed old prisons with poor conditions and facilities, and high running costs, to be closed, demolished and those sites used to build 3, 000 new homes, the sale receipts partly paying for the prisons. In the process, the estate would be configured to better match demand and supply. New gizmos would make new prisons whizzier. It really was a most cunning plan. A few months later, his successor, Liz Truss, confirmed the plans, promising 5 new prisons would be open by 2020. That is to say, today. The number actually open today is…none. Just two are being built. They will open in 2021.
Why did the plan fail so spectacularly? After all, in my day we built and opened new prisons within 40 months of going to tender. Though we were never quite so stupid as to plan to open 5 prisons in one year, knowing how difficult it is to open a new prison (none more so than the last publicly built and run prison, Berwyn, which remained troubled and half empty for years after opening). But back then, HMPS was headed by people who knew all about prisons, as opposed Jo Farrar, who knows all about running Bath Council, and prison building was handled by HMPS itself, not the incompetents who inhabit the centre of MoJ nowadays.
The reason for the failure was MoJ’s almost unbelievable incompetence. As the NAO helpfully documents (they’ll have to go, won’t they, Dominic?), two full years was spent shuffling paper back and forth between MoJ and Treasury. MoJ’s disastrous loss of financial control (see here) meant that capital had to be switched into current to plug the £1bn deficit in the budget. MoJ therefore had to look to private finance, not because it was better value, but because the cost could be spread over 25 years (prisons on the never-never). But (as I explained in my book!) PFI was never going to look as good as it had in the ‘90s, now that the public sector had got much improved its ability to build faster and cheaper, while the cost of public borrowing had plummeted. So HMT rejected their proposal. And then pulled the rug out from under MoJ by abolishing private finance altogether. So, back to the drawing board….
Last August, Buckland, Truss’s successor but two (do keep up!) announced (again) a programme to build 10,000 new prison places. No, not those 10,000. Another quite new 10,000. No dates promised this time – someone had learnt a lesson, indeed they only have one site as yet. And the reason for building them had changed. Not to close intolerably inefficient and unsuitable old prisons – what an idea! But to accommodate Johnson’s plan to lock prisoners up for longer. Although no estimate of how many places would be needed has ever been produced.
The latest announcement is still with the 10,000 figure: but the rationale has largely disappeared. It’s not to relieve overcrowding (surely no-one would build prisons just for that remnant of liberal hand-wringing! Overcrowding is nothing to worry about, bar the occasional lethal pandemic, of course), not to close old prisons, not to accommodate Johnson’s extravaganza – which is no longer so much as mentioned. (Why not, I wonder? Cummings was so proud of it only last year. Caution stirring in HMT at last?)
The ‘reasons’ now advanced are…well, absurd.
First, to reduce reconvictions. The idea is that shiny new prisons with shiny new gizmos in them (politicians, like children, are irresistibly attracted to shiny new gizmos that whirr and buzz) will be ever so much better at preventing reoffending. (Not, however, so much better than we can ever stop building new prisons – oh, dear no). The evidence for this is, well, nil.
In fact, we know perfectly well that this rationale is nonsense:
And it can’t boost local economies quite so much as they boast. Because as Treasury claim, a tad unfortunately, in the same press release, the prisons will in fact be prefabricated and transported to the site to be assembled (“Components, such as concrete walls, and pipework for water and electricity are built by companies around the country using modern, standardised processes and assembled on site.”). So, not locally. (Treasury, in that blissful state of near total ignorance of what Government’ have done previously which characterises Government today, clearly do not know that the first PFI prisons did that a quarter of a century ago. Prefabrication off-site is as exciting an innovation as cardboard.)
The wilful ignorance, serial incompetence and cynicism of the MoJ is unforgivable. Particularly since this programme, like everything else done by Government nowadays, will be paid for by forced borrowing from future generations. Johnson plans to lock up more of the younger generation and for longer, then force them and their children to pay for it. Government Debt, which the Tories made such a fuss about when it was only 80% of GDP, and used to justify destructive cuts in prisons, the police, legal aid, has in recent months reached 100%, a level last seen in the early ‘60s when we were still paying off war debt. And as Johnson builds, and the economy slumps, and millions are unemployed the debt will rise much higher. War debt was finally extinguished only by the rapidly rising growth rates of the late 50s and 60s. Does anyone seriously expect to see such growth again – post COVID, post Brexit, post global warming? This debt may even outlast the prisons we are now building.
This plan disgraces everyone involved.
From latest Inspection report on Berwyn, HMPS' flagship brand new state of the art rehabilitative prison, opened just 3 years ago
"One of the greatest challenges...was the lack of activity places. It is difficult to understand why and how the procurement of work and training places for a new prison could be so delayed...some [places] were of inadequate quality...Even those that were available were not fully used. Many prisoners were unemployed...staff did too little to support a sound work ethic. The prison was struggling to develop its approach to offender management and resettlement.....There had been no assessment of current need.....Too few offending behaviour programmes to meet need." Etc., etc.
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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