Last August, Rory Stewart said he’d resign if, by August 2019, levels of violence and drug abuse in 10 target jails had not fallen. He said that meant a ‘substantial’ reduction, in the order of 10 or 25%. Here are the results after 4 months (August-December 2018), for assaults and, since this is one of the main concerns, and is after all a form of violence, self-harm, in the 10 targets prisons. We won’t be told the figures for drugs till July, at earliest.
They show a fall of 13% for self-harm, and 19% for assaults – in only 4 months. Remarkable progress! Stewart can likely keep his job.
But…. note a few things, if you will. First, there is nothing exceptional about the fall in the 10 target prisons. Here is the change over August for all prisons, compared to the target prisons.
In fact, the fall in assaults is much the same for the target prisons as for all prisons – and for self-harm, all prisons did better than the target prisons. So it seems that what did the job was not Rory Stewart’s personal focus on the 10 prisons, but the result of management action across the whole estate. Now, who was running prisons during that time….name slips my mind. Whoever it was, he did a good job.
(Although another explanation – one too seldom considered, nowadays, when every tiny change is considered the fault of achievement of those in power – is just that all trends come to an end. It may be that drug consumption for example has reached its natural limits because prisoners simply couldn’t take any more drugs. Or because of the same arcane changes in society that created the problem in the first place.)
The second thing follows from the first. Experienced staff, and £10m, were diverted from other prisons to the 10 targets prisons, robbing Peter to pay Paul. Yet the rest of the prison service, deprived of those resources, actually did slightly better than the prisons to which resources were diverted. Raising the question of whether that diversion was more than a political ploy.
The third thing follows from the second. What, then, can have changed in late 2018 that might account for falling assault and self-harm, across the whole estate? Well, just possibly the same thing which, in the opinion of everyone except Ministers, created the problem in the first place - staffing levels. In 2018, staff numbers picked up again, as the Grayling cuts were partially reversed. In other words, maybe this isn’t so much the triumph of Rory Stewart, as further evidence that the appalling collapse of safety and decency in prisons since 2011 is the work of Tory Ministers.
The fourth thing follows from the third. It is, simply, this horrendous graph.
Seen in this light, Rory Stewarts’ ‘achievement’ is to stabilise the system, so that prisons are now ‘only’ twice as violent as when the Tories came in. Not much of a boast, one would think, for a Tory minister to make.
The fifth thing follows from the fourth. Rory Stewart presents himself as a man of integrity. But he avoids ever saying what he believes caused the deterioration of safety in prisons, and specifically, whether the Grayling cuts are to blame, yes or no. At any rate, I haven’t found a clear statement from him on the matter. And of course, he can’t say that the staffing cuts are to blame, because he would be blaming a senior colleague, and because he’ll never get Treasury to fund MoJ to restore staff staffing levels. Likewise, he has said that the system can’t be run properly without cutting the courts’ use of custody, but he and Gauke have avoided doing anything about it. Finally, I note again the nauseating deceit of presenting the partial reversal of the Grayling cuts as a staff increase. Likewise it takes some nerve to trumpet a reduction in violence, when what the rest of us see is an appalling increase.
So while this is undoubtedly good news, I will hold off the champagne for the time being.
We're all aware of funding pressure on public services - prisons, probation, courts, legal aid, NHS, social care, schools, universities, roads, defence, you name it - none of them now able to offer acceptable services. The bill to restore something like what we used to think acceptable, maybe £100bn a year? Here, to make you really depressed, is the long term picture: the trend line shows the very slow but seemingly unstoppable decline of the rate of growth in the UK economy over 60 years. And that's before taking account of the post Brexit slow down, the ageing population, climate change....No, I dont know what to do about it either, except to say, the future has to be different. We don't know yet how different.
The refusal to see this is one of the reasons I am not a enthusast for Corbynism. The great Aneurin Bevan famously declared that "the language of priorities is the religion of socialism" (though the great Peter Simple pointed out that you can change the order of the nouns any way you like and it still sounds profound). Corbyn and Co, with their assumption that everything can be afforded if we just chuck out the Tories and switch the printing preses to over-drive, clearly do not know that language.
Research by Katherine Auty and Alison Liebling, just published (behind paywall – how can that be right, with research done with public money? – but message me if interested) confirms that unsafe prisons don’t reduce reoffending. It takes measures for the quality of prison life (generated through anonymised surveys of prisoners’ and staff) developed years ago by Alison, and relates them to variations in reconvictions rates for those prisons, by excluding other variables.
As a result, we can now say definitively, what common sense surely told us previously, that a safe, stable, decent prison is likely to reduce reoffending and a violent and chaotic one is not. It is the measures of safety and security that are most strongly associated with reduced reoffending, especially ‘prisoner adaption’ (the prisoners perceived need to trade or make alliances within the prison, presumably relating to drugs and so on): “for every one-unit increase in the prisons mean score for prisoner adaptation there would be a 10.67 decrease in rates of proven reoffending”. An astonishingly high figure, larger I recall than most offender programmes (of course, they are linked: if a prisoner feels safe, he/she will benefit more from such programmes). Other strong correlations were with measures of prisoner safety, policing and security, and drugs and exploitation.
The message for MoJ is that if prisons remain violent, chaotic places full of drugs, as is the case in many now, you won’t reduce reoffending. Indeed, I wonder if one could use this work to estimate how many more hundreds of thousands of crimes have been caused Grayling’s cuts? If anyone can manage this in a statistically convincing way, I am happy to raise funds to put up posters around his constituency!
Fig 1: an intelligent Grayling
Impressive journalism by the FT has uncovered the scandal of Berwyn Prison, costing £220m (say, a thousand homes unbuilt) - but still half empty two years after opening, because of multiple cock ups. It has the dubious claim of being the first prison actually designed to be overcrowded, thus ignoring all the lessons of the Mubarek Inquiry (a teenager horribly murdered by a racist with whom he was forced to share a cell), just to undercut the private sector and so avoid open competition. It is more violent, yet more costly, than other such prisons.
Since the prison opened, 338 ambulances have been sent there, the police have been called 135 times and the fire service 27 times, the FT’s FOIs show. Use of force, supposedly a last resort, is running at an exceptionally high level. “The partner of the prisoner seeking a transfer said she thought some young staff had “got a bit of power and it’s gone to their heads” says the FT.
The healthcare unit is a disaster. The health team’s report described a “lack of compliance with infection prevention and control standards……and unsuitable design of facilities ”, which made treating patients “unsafe” and “required a complete rebuild of some areas”. Further, the FT reports that prisoners have been taken off prescription anti-depressants, anti-psychotics and painkillers without their consent, which some inmates say has driven them to self-medicate with illegal drugs.
An independent report lambasts the design of the prison generally, including no proper ventilation in the house blocks and problematic noise levels.
The workshops are another disaster. “They were not ready when the prison opened, and lacked basics like electrical work, fixtures and fittings. “The lack of work spaces has probably been the greatest challenge for everyone who lives and works at Berwyn,” the then Governor wrote in his anniversary message to staff a year after the prison opened. “The procurement process has not yet gone as we would have hoped or planned [and], consequently, there are too many men left on the communities during the day.” Today, two full years after the prison opened, the workshop buildings are still not ready. “There were just so many delays, it was ridiculous,” said Mark Gilbert of recycling company Emerald Trading, one of the original subcontractors, who became fed up of waiting and pulled out.
Imagine how the Guardian, Labour, unions would be frothing over this if G4S ran it! Obviously, they would say, the private sector is incompetent, wasteful, even wicked! But it’s public sector - so they keep quiet. If there is one thing I utterly despise, it is keeping quiet about wrong-doing because done by ‘your’ side. The National Audit Office and Justice Committee ought to look into this.
Probation privatisation: MoJ's incompetence exposed, yet top official becomes chief inspector of probation
Earlier this month one of the most damning National Audit Office reports I have ever seen detailed the disastrous damage done to a previously reasonably well performing public probation service by a privatisation botched from the start, every which way, predicted by everyone to fail, and which has now utterly failed, with contracts ended early, wasting stupendous amounts of public money. But there is still more to this scandal:
The Government has published its ‘Outsourcing playbook’, an effort to stop cocking up major contracts. ‘Playbook’ – isn’t that so, well, ‘hip’? (‘Outsourcing’ here is used much more widely than I would, to apply to any service that Government contracts for, including those that have never been done in house, and which it is utterly inconceivable that they should ever be done in house, such as construction of prisons, tempting though it is to envisage mandarins laying brick upon brick, like Ivan Denisovich.)
It’s all good stuff, based discussion with contractors (Rupert Soames of SERCO has been bravely saying this sort of thing for some years) and on learning from what has gone wrong with so many major contracts in recent years: electronic tagging (3 times), Carillion, probation, Birmingham prison (and that’s just the MoJ).
The text is supplemented by voluminous ‘toolkits’ (sometimes mere ‘tools’), templates, scorecards, guidance notes, Green and indeed Orange Books, Codes of Conduct.
The document sets 11 key principles, which I will translate into English:
It’s is basic common sense. Indeed, some of it is quite banal. We need measures of performance – are we really stating that, as a new insight, fully a third of a century after Thatcher’s Financial Management Initiative made that its central theme? Risk allocation, payment mechanism and pricing are to be ‘subject to greater consideration’? Verging on bathos. ‘We screwed up a lot, but in future we will give everything greater consideration’. So there!
Still, if actually followed, it would have prevented many previous disasters. It’s useful to test the document against that walking, talking procurement disaster, Chris Grayling. Principle 6 would have forced him to pilot probation outsourcing (as we did indeed pilot prison outsourcing, in the early ‘90s). Principle 4 would have forced him to justify his belief that companies with no experience of running probation services, indeed that were only formed to bid for these contracts, could nevertheless be assumed to do much better than the public sector (the reverse has since been proved by repeated audit and inspection). Principle 11 would have required him to explain how services would be maintained if the contracts proved impossible and/or contractors went bust (as has indeed happened). Principle 2 would have stopped dead successive attempts to procure tagging services using a technology which did not then exist and using a delivery structure that was a nonsense in techincal and oepraional terms. Might also have stopped him to contract for ferry services with a company that has not got, and never has had, any ferries. And so on.
Why, then, am I less than optimistic that the future of outsourcing is rosier in the light of this document?
Mainly because we have been here before. This exact same spot. Instructions, guidance, bought in expertise, training, independent external checks at different stages, you name it. Take, for example, the Office of Government Commerce, established with much trumpeting in 2000, with its elaborate structures to ensure distinct roles and responsibilities for major projects, its detailed guidance notes, its hierarchy of independent expert Gateway Reviews. Or the Major Projects Authority, set up in 2011, to provide independent assurance at different stages of major projects.
And yet the disasters have gone on. You see, it’s not that people didn’t know they were doing the wrong things, and not doing the right things. They did know. They just didn’t take necessary action.
Examples from MoJ, where people knew what they should do, then didn’t do it:
The question Government ought to be asking is, why, when we keep doing the same things to ensure things are done right, do they keep going wrong? That’s tricky to answer.
Part of the problem is how far you can idiot-proof projects when you have idiots like Grayling in charge. Arrogant, bullying ministers who think it weakness to listen to advice. (As we all know, bullies are fundamentally weak people: strong ministers, like Straw, listen courteously to advice because they didn’t feel their manhood threatened by conceding the possibility that they don’t know everything. And if they are wrong, they want to know that now, not later.) Who exactly is going to face down the sublime arrogance of a Grayling (and don’t suppose there isn’t a limitless supply of them on both sides of the House)? The centre of Government i.e. Cabinet Office and Treasury, simply isn’t strong enough, at official level, to say ‘no’ to such people? And at Ministerial level PM’s are more likely to listen to their loyal or at least essential political allies than to worried officials. Just look how May stands by Grayling now, even after the ferry contract fiasco, the railway fiasco, the probation fisaco...
Another way into this is to ask is, what actually happens when projects go badly wrong? Well, usually the National Audit Office produce a report saying what went wrong (but never naming officials); the Public Accounts Committee have an enjoyable morning roasting the officials; a critical report is published: Government says ‘we are busy learning the lessons’; and those concerned sail on through their careers and into well paid retirement. And of course, if those responsible have moved jobs, or retired, when the auditors have finished their work years later, they aren’t even hauled before the Committee, they are never asked to explain themselves, as they have ‘moved on’. I am not a fan of management by scapegoating, having seen that practised close up by Michael Howard. We all make mistakes, and hopefully, learn from them, certainly I did, and anyone who says otherwise is a danger to himself and others. But surely there is something wrong, if in terms of pay, promotion, career trajectory and retirement, there is no difference in the career path of those who hashed things up badly and wasted public money, and of those who did the job well and achieved benefits for the public?
Then there are problems of expertise, and culture. Is there, even now, enough procurement expertise in Government, and of the right calibre? Earlier this decade, inquiries into MoJ management of the tagging contracts, which involved officials paying out £200m over many years or work which was never done, noted that this occurred against the background of severe cuts in procurement staff, difficulties in recruiting and retaining such staff – in 2009, MoJ did not even have a central procurement department (1). Maybe it’s better now but somehow, with the cuts in administration spending in Departments, I doubt it.
Then there is the Civil Service culture, which traditionally has found ‘policy’ more attractive and career-friendly than the ungentlemanly tasks of running things, or buying things. Thus, the risk is that the bought-in expert is always positioned slightly to one side, rather than inserted into the heart of the business, as they surely should be in a Department like MoJ, spending over half its entire budget on contracts (2).
Looking to the future, there are four reasons why I don’t see a bright future for outsourcing, even if Corby never graces No.10.
First, the boom is over. Around one third of Government expenditure is on outsourced service – a fantastic amount. Plainly, there can be only a marginal further increase in outsourcing volumes in future. (And all those contracts, however imperfect, are out there now. How does the new ‘Playbook’ help with that?)
Second, related to that, Government has learned so little from this vast experiment. To give a couple of examples: DH told me that they have no research to point to, in house or external, that compares public and private healthcare providers. They simply do not know; and it hasn’t occurred to them that they should know. Likewise, on prisons, there has been no substantive study by Government comparing public and private operators since 2000 (3). There is a vast amount of experience in Government, and local Government, about making, shaping, and managing the many utterly different types of outsourcing market – from the single customer/3 supplier model of prisons to social care, with hundreds of suppliers, hundreds of customers and millions of users. But what has Government learned from all that experience? Practically nothing. The Institute of Government, and NAO, have done some good work examining different sorts of outsourcing and different kinds of quasi-markets, but it never seems to have occurred to Government itself to reflect on such matters.
It is incredible that there simply does not exist a body of evidence to tell us where and how outsourcing has brought benefits, and where it has not, in what sectors or environments it appears to work and where not, what sorts of market work and how are markets best reregulated, and so on. It is willed ignorance on a colossal scale, and surely the root reason is that the advocates of outsourcing fear that impartial assessment would show, in many cases, that it has not brought any public benefit at all, indeed has done real damage. The consequence of this willed ignorance is that the case for outsourcing is not made, and that the practice of outsourcing does not improve.
Third, it is unclear how outsourcing can work well in an age of austerity. If there simply isn’t enough money to run services to an adequate standard, how can outsourcing help? In prisons, we showed in the 1990s and 2000s that private companies could run decent prisons at lower costs because the existing public service was so wasteful – we didn’t use staff efficiently, overpaid many of them, dint have the slightest grip on procurement, and so on. There is no reason to think that the problems of the NHS or schools are down to too many doctors and teachers, paid too much, not working hard enough. And there is unbelievably, almost no evidence that the private sector can run services better. In which case, what is the case for outsourcing?
Fourth, the game is completely lost politically. Poll after poll (4) shows remarkably high levels of public opposition to many forms of outsourcing, and remarkably high levels of support for Labour’s promises to re-establish public sector monopolies. The argument that outsourcing can work better for the public than state monopoly has been lost. And that has been entirely an own goal. It has been lost because Government has simply asserted private sector good, public sector bad, without ever bothering to produce evidence. It has never explained to the public what benefits they are enjoying because of outsourcing. Yet at the same time the public see endless stories of corporate greed and incompetence, of Government botching contracts and contract management and then failing to do anything about it, of failing contractors bailed out by government.
To me, as someone who believes that competition, properly targetted, intelligently and responsibly run, can in some cases do more for us than monopoly, this is sad. Because it means that we will then go around the track again. Labour state as a self-evident truth the surely equally daft mantra, public good, private bad. A generation who never knew British Rail at is worst, never waited for months for the Post Office to put a phone in, never knew the scandal of the publicly run prison service of the 1980s, or the horrendous NHS waiting lists of the early 1980s, will have to learn again that monopoly power tends to be high cost, tends to be self-serving, is often resistant to new ways of doing things, and is often in reality barely more accountable than G4S or SERCO. Which is where Mrs Thatcher came in.
(1) Details in my book
(2) ‘Government procurement: the scale and nature of contracting in the UK’. Institute of Government, December 2018
(3) The excellent comparative study of service quality by Alison Liebling and others was not conducted for Governmen. There have been no comparisons of cost since 2000
(4) Populus 2012, YouGov 2017. Actually the polls show the public to be much more discriminating than one might suppose. They think it OK for buses and airlines to be run privately but not trains, phone services but not mail, banks but not the Post Office.
Rory Stewart on BBC News, 17 August 2018
“I will quit if I haven’t succeeded in 12 months in reducing the level of drugs and violence in those  prisons.”
Asked how much of a reduction he would consider a success – 25 per cent or 10 per cent – Mr Stewart said it would be “something of that sort”.
Rory Stewart before Justice Committee 11 December 2018
“The graph on violence is very worrying; it is rising. As you know, I have promised to resign unless we turn that graph around on violence in those 10 key prisons. At the moment, the graph is going in the wrong direction for me. In fact, over the last 12 months—in fact, if you take it from 2012—the graph is almost going straight up at the moment. If you were to project it forward, unless we manage to grip this, it will continue to rise…..I believe that we will turn it around…”
Will he resign if he doesn’t reduce violence and drugs by August 2019 below what it was in August 2018?
Will he resign only if the graph, by August 2019, hasn’t started to move downwards - however much it has risen since August 2018?
All 10 prisons? Or just some? Or just one?
Violence and drugs? Or just one?
The appointment of Jo Farrar to replace Michael Spurr as Chief Executive of HM Prison and Probation Service ends a quarter of a century of professional leadership of the prison service i.e. by people who had been prison governors – Richard Tilt, Martin Narey, Phil Wheatley and lastly Michael Spurr. Prior to that there had been one total outsider – Derek Lewis, ex Granada and Ford – and before that, a succession of senior civil servants who had never worked in prisons and who in most cases had spent their working life in Whitehall.
It is a very tough job to fill, because it is at once one of the most testing hands-on management jobs where things can and do go wrong any time of day or night, and highly political, with Ministers directly personally accountable in a way they aren’t in the NHS, for example. So, you need someone who both knows prisons from deep personal experience as a manager, and who at the same time understands and can operate in the political and media world. Managing both down and up. We’ve been lucky to have had 4 chief executives who could do both.
Why the change now? There were some first-rate candidates with both senior prison operational experience, and experience outside of prisons. The decision to choose a generalist civil servant from outside the service, for the first time in a quarter of a century, could have come from two quarters, or both. Rory Stewart seemed ill at ease with a strong operational leader from the start – the body language between the two at their first public appearance together was unmistakable. Happily, it soon transpired that Stewart himself miraculously understood all about prisons and knew how to run them and, indeed, meant to run them. Spurr ceased to be visible, became an unperson, and the difference in role between minister and chief executive seemed at times non-existent. So, a civil servant used to public invisibility would suit Stewart well.
Then there is the historic tension between the Worshipful Guild of Permanent Secretaries and strong operational managers, which I saw up close in my time, and have heard much of since. Most Permanent Secretaries have never run a public service directly, I mean a service where you actually deal with face to face, serve directly, with them, the public – that appears true of Heaton, a career lawyer. They know of course that such management experience is a good thing, but up close they find it a bit challenging. There was often a tension with operational managers like Lewis and his successors, who clearly knew things that Permanent Secretaries didn’t, but for that very reason was a threat to their grip on the Minister. It was also an article of faith that mere operational oiks couldn’t possibly master the esoteric arts of advising Ministers, though when I was there, successive Ministers were just so glad to have someone around who actually knew what they were talking about and could get things done. There was also the perpetual fear that a chief executive might actually answer back.
So, Heaton’s predecessors played with such devices as having a generalist civil servant ‘mark’ the chief executive and supply suitably ‘mandarin’ advice to Ministers in parallel to that from the chief executive, and in a busy and risky service you might imagine how helpful that was. More recently it was seriously proposed that a senior civil servant next to Heaton should be in charge of ‘policy’ and negotiate ‘contracts’ with Governors which the chief executive would be bound to ‘deliver’, thus ensuring Ministers got two lots of advice all the time, from ‘buyer’ and ‘operator’. Playing at shops. Quite how long it took to knock that lunacy on the head I do not know.
So, the idea of ending professional leadership or at least subordinating it to a generalist civil servant with no prison management experience, who’s a reliable member of the club, so to speak, and who would interpose between operational managers and Ministers, must have been very attractive to Heaton.
Does the change matter? It does, for two reasons. It matters to people working in prisons, especially Governors, whose job is a lonely and exposed one, that the person at the top, the one handing down policy and performance demands and budgets, even if they don’t agree with his decisions, at least knows what the job is like, understands the dynamics of their peculiar world and the risks being run, not because they have been told it, but because they once did the job themselves. And it matters in the other direction that the person telling Minsters that such-and-such a policy or budget runs unacceptable risks, or that there is a better way to do things, or the true priorities are otherwise, has credit with Ministers. I know from experience that that on occasions enabled the chief executive to prevent Ministers making serious errors of judgements, that would in the end have rebounded on them. Good Ministers, like Jack Straw, appreciated this – weak Ministers resented it. A generalist civil servant knows when to shut up and do as told, however risky or impossible the demand. It helped too that professional heads of the service had no further ambition – they had no need to please the Permanent Secretary, just because they hoped to be one themselves one day.
So I think the change is a loss.
On top of that HMPPS has lost control of much of its business – for financial, HR, procurement legal, estates, ITC and other services, which it used to run itself, it must now rely on the centre of MoJ, to which the resources previously managed directly by HMPPS when it was a real Agency have been withdrawn. I know how important it was when I was FD that I was an integral part of the business and not outside it. Given the chaotic state of MoJ finances and its numerous procurement disasters, the end of self-management is a huge blow, and means that the chief executive no longer has the information and control required to run these services.
About Farrar I know very little. She has experience in local government at senior level, so she knows a fair bit about managing, albeit on a smaller scale. For the past 3 years she has been Director General for Local Government and Public Services in the Ministry of Housing, Communities and Local Government. The MoJ spin people say that in that job “she has helped local government to deal with significant increases in demand in a difficult financial climate.” That’s one way of putting it. The councillors I know put it rather differently! The cuts in local government have done enormous damage to vulnerable people. Here’s what the National Audit Office say:
None of this is Farrar’s fault, needless to say. Any more than the catastrophic cuts that have overtaken prisons is Spurr’s fault. Goes with the job nowadays. It’s just that the spin, pretending nothing bad is happening, we’re just finding ‘new ways of doing things’, is so sickeningly dishonest, and of course, no-one believes it. Reminds me very much of the history of Soviet Russia which I am reading. (1)
Anyway, one wishes her well. She will be utterly captivated by these services, as most people are. But please, not too many gimmicky initiatives. We know what needs to be done to restore safe and decent prisons: more money, more staff, fewer prisoners, stable, professional management allowed to get on with their job and sure, held to account for it.
I’ve already said my piece about Michael Spurr here. I guess he will be forced into early retirement. I wish him a long and happy retirement, a long way from prisons. And Ministers.
(1) For an uptodate, informed and objective account - by the National Audit Office - of the ways in which decisions, and indecision, by Government are devastating local services and pushing local authorities into bankruptcy, see this.
In July last year the Criminal Justice Alliance sent a paper, How to start reducing the prison population, to Rory Stewart. They argued that the population could be reduced by 12,000 in 4 years, saving £900m. Some of their ideas can be done without legislation, some not.
I am in in favour of this sort of pragmatic ‘how to’ approach and we badly need to get prison numbers down quickly.
However, it is marred by mistakes and weaknesses which are all too common when pressure groups are keen to explain that this or that policy change will liberate huge amounts of dosh, as follows:
(In one respect, the CJA may have underestimated savings, in that a reduction of 12,000 or even 6,000 would be enough to close prisons, so there would be capital income as well. But that assumes the CJA is content to leave overcrowding at its present near record levels, with all the damage that does. On the other hand, if you keep all prisons open, so that overcrowding reduces as prisoner numbers fall, you much reduce your savings per unit, as it were. And in any case, on latest projects the population will continue to rise, making it problematic to close prisons only to have to reopen or rebuilt them later.)
It seems a little harsh to criticise the CJA since they have at least shown some of their their workings and tried to net of some new costs. But it’s very clear that the real net savings achievable through this plan are a fraction of the £344m a year claimed, that the £900m figure is misleading because arbitrarily accumulated over years, and that any net savings that can be made must stay in the prison system itself, if we want to alleviate their current disgraceul state at all.
As FD, I always thought smaller amounts based on realistic assumptions had more impact than big numbers resting on dubious foundations. And it matters much more now: because in the post Brexit world, where there is good reason to believe that the economy will slump for many years, and no reason to think rates of growth can ever recover to pre-2008 levels, the only way we can improve services – or preventing them deteriorating – will be through radical, but utterly realistic, ways of doing thiings differently. And we know, from so many examples, how difficult it is to realise savings in services through deliberate changes in policy and practice, rather than arbitrary cuts.
For the terrible truth is, we aren’t almost out of austerity – we are about to re-enter it, courtesy of the monstrous self-harm of Brexit.
Rory Stewart's plan for re-introducing competition for running prisons, announced in November, is the most ambitious and is some respects, most sophisticated ever attempted. But can it work?
For the private sector, there are three main deterrents to entering this market. First is the stop-start, hand-to-mouth nature of such competition, with no assurance of any long-term prospects – indeed, many competitions have been aborted or petered out half way through. Second is suspicion that, when the public sector is allowed to compete, there will be some sort of bias in its favour. Third, no company wants to win contracts at such unfeasibly low prices that failure is all but inevitable.
Stewart's plan addresses the first point with a 10-year programme, comprised 10,000 places in new prisons to replace ageing, cramped prisons with poor facilities, together with the re-competition of existing private prison contracts when they end (the first of the 25-year PFI contracts will end in 2022) – so, not far short of 20,000 places in total. It dwarfs anything that came before.
The 10-year planning horizon is unprecedented in this sector, and highly unusual in any area of public policy. It offers a long term 'pipeline' of commercial opportunities which is exactly what the private sector, particularly aspiring new entrants, need. This is not appreciated by those with no understanding of how the private sector works, which sadly includes many ministers as well as civil servants, who tend to regard the private sector as a tool for Government to switch on or off as convenient.
The need for a pipeline isn't greed: it's a commercial necessity. Bidding is costly: it requires the bidder to assemble a team, which must include a credible Governor or two who, if you are a new entrant, generally has to be poached from the public sector: and good governors will be hard to attract, especially if this is a first ever bid, since if unsuccessful, there may never be a prison to govern. A good bid team, plus lawyers etc, costs around £500k minimum, much more for PFI; moreover, these are people who could be bidding for prisons in other countries, or for other opportunities in the UK, so there are big opportunity costs also. There are huge diseconomies in operating one prison only. Prisons are a highly specialised market, so the company's board will need persuading that there are long-term opportunities. Government's habit of announcing competitions as one-off, abandoning many of them part way through (an astonishing 11 out of 14 market tests since 1992 have been aborted), and invariably awarding contracts to the existing big three operators, is massively discouraging to companies contemplating entry to the market, as I well know, having worked for two.
So, Stewart's 10-year programme is welcome indeed. Trouble is, the UK system of government makes such long-term strategies entirely undeliverable, especially where there is no bi-partisan agreement. By 2028, there will have been at least two General Elections, but probably several more – there is every likelihood of one being called in the next month! Labour strenuously oppose competition and are committed to re-introducing monopoly provision. Even within a single Parliament, Government spending planning has a maximum horizon of 3 years, so there is no guarantee of funding beyond that – especially as we approach the uncharted seas of Brexit, with likely further deep cuts in Government spending as the economy tanks. On top of that, there is the rapid turnover of ministers, and the strange convention nowadays, that continuity of policy within an Administration means nothing, rather we have a succession of distinct policies by different Tory minsters. And Stewart himself has pledged to go if he can't reduce violence in prisons by August 2019 (but expect some re-engineering of that promise: 'reduce' meaning 'stop rising further', 'prisons' meaning 'some prisons' etc).
So, the chances of his strategy lasting 10 years are vanishingly small. Proof of that is what has happened to previous strategies: the 5 year programme to compete a quarter of prison and probation spending launched in 2006 (1), or the grand plan in 2009 to increase capacity to 96,000 places and replace ageing city centre prisons with new ones, but with competition to run new prisons limited to the private sector (sound familiar?) (2) or Ken Clarke's competition for 9 prisons launched in 2011 (3). None of these lasted more than a year or two, or came anywhere near the volumes promised, for all sorts of reasons: lack of persistence and nerve by Government, change of minister or Government, the Crash, disgrace of bidders.
On the second issue, the public sector is apparently to be excluded - it isn't totally clear that Stewart means they will never be allowed to bid in any of these competitions, but that is seemingly what he says. This too will greatly encourage bidders. But is it in the public interest? If the private sector gain 7 or 8 new super jails, replacing perhaps 12 or 15, old public sector prisons, then the private sector share of the prison 'market' would rise from about 18% at present to around 30%. Why exactly is that desirable, given that as Stewart rightly says, there is no consistent difference in performance between the two sectors? Stewart does not say. Of course, the answer he should make, is to increase competitive pressure on the public sector. But if all the competitions for the next 10 years exclude the public sector, and if the growth in the private sector is entirely through new builds and new-for-old, and not through market testing of existing prisons, then where is the competitive pressure on the public sector? Successive heads of the Prison Service have said that an important driver of improvement in the public sector was knowing that if you persistently failed, another operator be brought in to take over your prison. On Stewart’s strategy, the public sector face steady erosion of their market share - but are never challenged to show how they could improve performance. 'Competition', yes - but never between sectors. Missing the point, surely.
This brings us to the question of the purpose of this strategy. Here Stewart is less than clear, and seems content with the usual platitudes that have been offered in every competition for a quarter of a century now. He says it 'is not about the difference between the public and private sector'. Rightly, because on quality, there isn't, and never has been, a clear consistent lead of one against the other; on price, there probably still is a significant private sector advantage but we don't know how much, and the main cost difference, pensions, is unknown, indeed unknowable.
So, what is Stewart trying to achieve? ' Driving quality and innovation'. But he has admitted that there isn't a difference on quality. As for innovation, the evidence is that innovation by the private sector, though useful, has been of marginal importance and certainly not a game changer, and not just in this country. (In my book, I make the argument that prisons are simply not a particularly suitable sector for innovation, for various reasons.) And there is nothing inherently good about innovation, it isn’t some sort of magic powder you sprinkle over everything – it can be harmful, as we have seen in probation.). The private sector did innovate in prisons, two decades ago, by cutting building times and costs in half and reducing operating costs by around 30%. But they no longer have quite the same edge now. And that was about cost, not what they achieved with prisoners.
Stewart also wants competition to reduce re-offending. On this, there is no evidence that private prison operators do so better than the public sector, here or in any other country. Nor privatised probation. I believe that looking to 'innovation' to reduce reoffending is a mistake, resting on an uncritical belief that innovation is invariably the route to improvement (it wasn’t in the 2000s: we just started managing. Though for Government, OK, that was an innovation.) We know very well what sort of things reduce risk of reoffending: we just don't do them very well, because they cost money. Indeed, as I have argued elsewhere, it is my growing conviction that for various reasons, no correctional service can reduce reoffending by more than a few percentage points, and any such success is likely to be drowned out by fluctuations in the reoffending rate due to societal and other changes which we do not control and do not understand. To be sure, to help the offender in front of you lead a more law-abiding, satisfying and self-reliant abiding life is always a moral imperative: but the correctional services are not a machine for changing society.
So, I am not much impressed by the supposed aims of this strategy. Yet surely, it isn’t too hard to describe what we really want. Not shiny gizmos or clever new panaceas. We want prisons that aren't desperately overcrowded or full of drugs, prisons that are safe, decent, and provide the regimes and activities which, we already know very well, help prisoners stay out of crime on release. Prisons we needn’t be ashamed of and which, if they don’t do much good, at least don’t do much harm. But all that costs money.
Which brings us to the third concern – the risk of the race to the bottom. Stewart says he wants 'value for money' but what does that even mean nowadays, when the entire system is in a bad way? Grayling cut public sector staff/prisoner ratios, and staff starting pay, to something much closer to private sector levels; staff ratios were cut in some private prisons too. Meanwhile there has been no relief from high overcrowding. Add to that the new drugs, and the result has been catastrophic: a prison system which in 2010 was in as good a state as it had been in living memory, has become, in local prisons particularly, a violent, drug-fuelled chaos that shames this country and, of such a thing were possible, this Government. (In 2011-11, not one prison received the lowest performance rating, giving 'serious concern'; last year, 15 prisons were so rated, with no great difference between public and private sectors).
So, the question is, can extending the private sector be helpful, in a system so damaged by austerity? I can see how it just might. Bigger, newer jails will mean significantly lower operating costs; and in addition, it looks to me that the private sector is still significantly more efficient than the public sector, not necessarily because the staff: prisoner ratio is lower, but because they get more work time out of staff, pay lower pensions, can be more sensitive to local labour markets, and so on. Put those things together and the operating cost of a new big private v old smaller public prison might be 25 or 30% lower per place. If those savings are reinvested in staffing levels and decent regimes, it might be that the private sector will have a better shot at running decent, safe jails, which moreover will have sufficient, modern regime facilities.
But will those savings be re-invested in the new prisons? I can’t see that happening. MoJ is currently running a structural deficit of £1bn a year, almost as big as MoD's. That is to say, current operations are under-funded by £1bn, which is being covered in various hand-to-mouth ways. If MoJ were a business, it would be required to file for bankruptcy. Brexit will for some years drive down GDP and hence spending, while driving up spend on benefits and support for what was previously EU funded. The court reform programme, which promised savings, is already in deep trouble and looks set to be next MoJ failure.
And there’s another obstacle, of Stewart’s own making, to retaining and reinvesting savings: rising numbers. Gauke and Stewart have talked a good talk about cutting short sentences, but done nothing. If the number of sentences under 6 months were halved, that would cut numbers by only a couple of thousand. On current projections, we need more capacity by the early 2020s. That suggests that 'new for old' will be impossible – we will need to keep some of the old prisons going to meet demand. But if the old prisons in reality cannot be closed, then where are the operating costs for new prisons to be found from? So, my guess is the Treasury will want its pound of flesh and any savings from ‘new for old’ will go to offset the MoJ's frighteningly huge operating deficit and to keep existing prisons going. Making the race to the bottom the only game in town.
A further question, that I’ve raised before, is who will bid. SERCO and G4S are still (after 5 years!) under investigation by the SFO, leaving only one operator, Sodexo, as an acceptable bidder. The obvious source of new bidders is the privatised probation service, in particular MTC, who operate prisons in the United States, and Interserve, who build and service prisons here. Both companies have been marched up and down this hill previously, but may reckon that their CRC experience, which means they are used to dealing with offenders in the UK, justifies the triumph of hope over experience, especially with £5bn or so of contracts potentially on offer. What is their track record? Privatised probation has been a failure: its contract has been terminated early, its performance has been much poorer than the public sector, innovation has, says the chief inspector, been marginal and some of it downright harmful. MTCs record in America is not terribly attractive; private prisons generally in the US have not been as much a success as here, and there is the nagging worry that American methods of running prisons are nothing like ours (The Shawshank Redemption v Porridge, if you will). And Interserve have been teetering for some months on the verge of becoming the next Carillion – and a hefty Brexit-driven recession could well tip them over. So, it’s not clear where Stewart’s transformative effect will come from.
Prison operators, existing and new, are therefore being offered the prospect of running huge new jails, that will be perpetually overcrowded and near the limits of control and decency, with the sort of blowback on reputation that G4S has suffered, and on tighter than ever margins. Some offer! Still, a pipeline with a value of maybe £5bn will get very serious attention. And companies looking for public service outsourcing contracts can’t pick and choose – they are stuck with government, as customer, for better or worse. So bidders will come forward, smelling the big money in an increasingly bleak world.
I am just not sure that it’ll do much good – I mean, deliver any real public benefit, which is the only justification for outsourcing. When most prisons were doing OK, the threat of competition helped keep them that way. But when both sectors struggle, in a system so badly damaged by deep cuts in funding, but none in prisoner numbers, and in much worse shape now than for the past several decades, does competition promise any more than a choice of operators who can barely cope?
(1) “Improving prison and probation: public value partnerships” Home Office 2006
(2) “Capacity and competition policy for prisons and probation” MoJ 2009
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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