PRIVATE PRISON COMPLEX - PROS AND CONS

THE DRIVE TOWARDS PRIVATISATION IN THE PRISON SYSTEM ISN’T NEW. IT

BEGAN BACK IN 1986 THE PARLIAMENTARY HOME AFFAIRS SELECT

COMMITTEE CONCLUDED THAT THE PRINCIPAL ADVANTAGES OF

CONTRACTING OUT PRISON BUILDING AND MANAGEMENT TO THE PRIVATE

SECTOR WERE….

• It relieves the taxpayer of the immediate burden of having to pay for initial

capital cost

• It dramatically accelerates their building

• It produces greatly enhanced architectural efficiency and excellence.

“The Select Committee proposed that as an experiment the Home Office should enable

private sector companies to tender for the construction and management of prisons (Home

Affairs Select Committee, 1987). However, it did not recommend how extensive this

should be or give a time frame and no evaluation process was set out. The Conservative

government accepted the Committee’s recommendations and said it would take

privatisation ‘step by step so that we can test it properly’ (Financial Times, 28th January

1992). This decision fitted in with the Conservatives wider agenda to reform public

services and tackle the ‘restrictive practices’ of trade unions, in this case the Prison

Officers Association (Ryan, 2003)”

Following a tendering process in which the public sector

was barred from participating, Group 4 was awarded a

contract to manage HMP Wolds, a newly constructed 320 bed

prison for unsentenced male prisoners that opened in April

1992. The prison had a number of initial problems that were

highlighted in reports by the Chief Inspector of Prisons, Prison

Reform Trust and the National Audit Office. Despite the

Company’s and the Government’s claims, it was not an

unqualified success, and there was genuine cause for concern

about aspects of the regime in its early stages.

The Conservative government, however, pressed on without a full evaluation and in 1993

announced that all new prisons would be privately built under the private finance initiative and

privately operated. It was not deterred when Home Office commissioned research which

evaluated the Wolds concluded in 1996 that:

‘..similar, and some might argue, better achievements

are to be found in some new public sector prisons,

showing that the private sector has no exclusive claim

on innovation or imaginative management able to

deliver high quality regimes…’

(Bottomley et al, 1996).

During the Conservatives time in office, as well as the Wolds,

a further three prisons (Doncaster, Blakenhurst and Buckley

Hall) were opened that had been built with public funds but

were privately managed jails. The Conservatives also

commissioned the private sector to build and run two more

prisons, Parc in Wales and Altcourse in Liverpool.

(PrisonRefromTrust.UK)

On 8 May 1997 in a dramatic U-Turn from the Labour Party Jack

Straw announced:

“If there are contracts in the pipeline and the only way

of getting the [new prison] accommodation in place

very quickly is by signing those contracts, then I will sign

those contracts.”

Companies that profit from privatisation

Premier Custodial Group - This is the UK’s largest private prison operator. It was formed

in 1992 as a joint venture between the American private prison operator Wackenhut

Corrections Corporation and a British facilities management firm, Serco PLC.

Year ending 1994 annual turnover: £7.52 MILLION.

Year ending 2002 annual turnover: £127.4 MILLION.

Pre-tax profits: £9.98 MILLION

UK Detention Services (UKDS) - UKDS

was set up in 1987 by Corrections

Corporation of America (CCA) - then, as now,

the largest private prison operator in the USA

- as a joint venture between two long

established British construction companies, Sir

Robert McAlpine and Sons Ltd and John

Mowlem and Co. UKDS was instrumental in

lobbying the then Conservative government to

privatise prisons and for MPs to vote for

enabling legislation. In 1996, CCA bought out

the two British firms and eventually sold half

of UK Detention Services to Sodexho, a Paris-based multinational corporation. In September

2000, Sodexho became the sole owner of UKDS after CCA sold out for £3.5m. CCA (UK)

made a profit of more than £2m on the sale to Sodexho and shareholders received a £3.16m

dividend in year ended 31st December 2000 (CCA (UK) Ltd company accounts, 31 December 2000).

1995-2001 UKDS turnover: £97.6 MILLION

Pre-tax profit: £4.74 MILLION.

Year ending 2003: £30.3 MILLION

Pre-tax Profit: £1.95 MILLION.

Matter of interest: UKDS first won a contract to manage a prison, HMP Blakenhurst, in 1992. The

company became the first to be fined (more than £41,000) for failure to comply with its contractual

obligations. Ten years later it lost the contract after the Prison Service was allowed to bid in a market

testing exercise. In 1998 UKDS won a further contract to finance, build and operate Forest Bank, a

local prison near Manchester. More recently, UKDS and its construction and banking partners were

awarded contracts to finance, design, build and run the country’s first private women’s jail with a

combined value of more than £478m.

Group 4 Securicor - This company was created in July 2004 when

Securicor was acquired by Group 4 to create the world’s second largest

security company, Group 4 Securicor. In the same month Group 4 sold off

its international corrections business. Securicor’s UK corrections businesses

were operated by a subsidiary, Securicor Justice Services, and this is now

a subsidiary of Group 4 Securicor.

Securicor won the contract to finance, design, build and manage Parc, a local prison in Wales

which opened in 1998. In May 2001, Securicor refinanced Parc making £1.4m. The Prison

Service did not share in this windfall (Hansard 31st March 2004).

Year ending 2003 turnover: £70.6 MILLION

Pre-tax Profits: £8.3 MILLION

Falck A/S - This company came into existence in July 2004 when Group 4 Falck sold off its Global

Solutions international corrections business division to private equity firms Englefield Capital and

Electra Partners for £207m. Englefield and Electra each now own 50 per cent of Falck A/S which, as

part of Group 4’s restructuring, became the Denmark based holding company for the corrections

businesses run by GSL. This included the operation of Altcourse, Rye Hill, and Wolds prison.

Financial Penalties

A system of financial penalties is in place to ensure prison operators comply with their contracts.

However, this is not enforceable and numerous financial penalties have been overlooked or waived in

favour of the private companies.

Premier was fined £426,597 for problems at Dovegate in the first

nine months of 2002. It has also been fined £94,865 but has had

£11,865 waived in respect of Lowdham Grange on condition that it

provide additional services. (Hansard, 6 May 2003) Premier-run

Ashfield Young Offenders Institution. In May 2002 the Prison Service

took the unprecedented step of removing the jail’s director and

installing public sector management because of concerns over the

safety of staff and anxieties that Premier might lose effective

control. Premier incurred financial loses, including penalties, of £4.2

million but control was subsequently handed back to the company

(Public Accounts Committee, 2003)

Group 4’s accrued penalties at Altcourse were £0.5 million but were offset against the company’s £1

million refinancing settlement with the Prison Service (NAO, 2000). The company was also fined £65,589

for two escapes and failure to implement recommendations made by the Standards Audit Unit at Rye

Hill.

Securicor accrued penalties of £1.02 million for problems at Parc. However, £750,000 of that was

subsequently waived ‘to take account of early problems with contract monitoring’

(Hansard 6th May, 2003)

Commercial confidentiality and secrecy

Due to commercial confidentiality the key financial and operational details of the contracts drawn up

between the private companies and the Home Office are not available for public scrutiny. The process

remains secretive. This was highlighted by the parliamentary question put forward by Simon Hughes in

December 2001 when he was the Liberal Democracts Home Affairs spokesman:

‘To ask the Secretary of State for the Home Department if bid

and tender documents relating to the (a) design, (b) build and

(c) management of prisons are published; and if he will make a

statement.

Beverley Hughes: The Invitation to Tender (ITT) issued by the

Prison Service at the start of a competition for the design,

construction, management and financing of a new prison is

freely available. The bids made in response to the ITT are

commercial in confidence and therefore not published’

(Hansard, House of Commons written answers,11th December 2001).

Despite claims that privatisation of the prison system would offer a new a refreshing aspect to the

system where there could be a more efficient and positive outlook and adoption of primary innovative

reform in the best interests of the public sector, this has, on numerous occasions proven to be false as

found by the Chief inspectorate of prisons in 2003. His comments were as follows…

‘There was some welcome innovation, and good staff-prisoner

relationships. But there was also a worrying lack of experience and

confidence amongst a young, locally recruited staff, few of whom had any

previous prison experience, and who were operating with low staffing

levels and high staff turnover. By contrast Dovegate’s prisoners were not

inexperienced’ (HM Chief Inspector of Prisons, 2003)

The Profit Motive

The private sector is motivated by the need to make profits, a fundamentally different

motivation from the public sector. It inevitably leads to cost cutting and a desire to ‘grow’

markets. This was made evident in the Chief Inspector of Prisons report on the Dovegate

therapeutic community. It stated:

‘..there was concern that in order to keep up the numbers on the TC [Therapeutic

Community] required by the prison’s contract……prisoners from Dovegate main

prison were taking precedence over those from elsewhere on the waiting list….and

it was of concern that selection was apparently being skewed by commercial

imperatives’

(HM Chief Inspector of Prisons, 2004a)

A false declaration came from the then chancellor Gordon Brown….

‘we can show that the use of private contractors is not at the expense of the

public interest or needs to be at the expense of terms and conditions of

employees…’

(Gordon Brown, 2003)

While overall savings to the taxpayer are yet to be proven, companies appear to have made

substantial savings - and higher profits - through inferior pay and conditions for staff compared to

their public-sector counterparts.

Average wage for an officer in the public sector: £23,071

Average wage for an officer in the private sector: £16,077

‘According to the National Audit Office there was a

very high turnover of staff in most private prisons and

in each case the turnover was higher than in

equivalent establishments in the public sector.’

Basically all savings that were initially promised with the privatisation have been at the expense of

staff hired from public sector sources. All Other promises have failed miserably in delivering even

slight changes to support their content. One of the negative results of the cuts and changes to the prison

system has been a severe drop in staff competent in carrying out their jobs as effectively as those in

the public sector. This puts those members of staff at higher risk of manipulation, violence and other

negative impacts experienced in the prison system as part of the everyday way of life associated with

prison life….for less money and more hours. It also undermines the strict disciplinarian regime that is

expected of from a system that is built to punish serious offenders. Or individuals who are considered

a threat to the general public, reducing the chances of any positive impact on rehabilitation of

offenders.

Innovative work options

“The private sector has been eager to be innovative and

enterprising initiating a variety of projects that have

benefited prison regimes”

This is also evident in American prisons where the eventual

outcomes for long term prisoners is double edged. They do

learn skills in the prison environment but those skills are then

used by the state to reduce the workforce costs in society

by using prisoners to create workforces at minimal pay

scales, some scales set as low as $2 per hour. That is more

reminiscent of slave labour than innovation. Almost like a

form of paid community service, or modern day slavery

with a twist.

Looking to America

Now, here is where it gets a little more concerning. Despite the mixed performance of American

companies that have operated in the UK, which I highlighted in the company profiteering list, and their

record in the United States, where independent research has found that, overall, the claims for cost

savings, efficiency and innovation remain unproven, the Government still turn to the United States to

generate ideas that they class as best practice. Four such companies that our guiding lights focused on

are already present here in the UK.

Correctional Services Corporation (CSC) –

Youth offender management.

Cornell Companies Inc – Expressed

interest but then held back.

Management & Training Corporation

(MTC) – Now have a London office. A

company criticised in America for previous prison

involvement.

GEO – Previous joint owners of Premier.

Adopted from the American Penal system and other penal regimes globally, is a directive where

there is a contractual agreement that is called a 'lockup quota' where the prison system is held

accountable for filling the empty beds. Beds that are left empty, under this contract, are paid for by

the taxpayer.

This is a new contractual agreement that is fairly fresh and in process in the majority of private

prisons guaranteeing prison occupancy rates. Some of the contracts require an unrealistic 90%

occupancy quota. This drive-in America is resulting in privatised companies offering to buy up public

prisons in exchange for a 25-year contract which demands 90% occupancy for the full term of

contract.

At present, there is minor resistance but if government cuts get any worse there will be no other

option but to take the offer. These contracts counteract the desire for prison reform and less

incarceration for minor 'victimless' crimes, and in fact directly contrasts the argument for support rather

than punishment. It's not a new idea, in fact it's been tabled since 2012.

This puts the defence in a position where instead of acting leniently they will have to become harsher

in sentencing. The argument here is that prison sentencing should be based on a criminal justice system

that protects the public’s interest rather than ensuring corporate profits. The general gist of this is that

long term, prison offers no set rehabilitation, nor does it reduce recidivism with the revolving door

spinning faster than ever currently 70% of inmates in the prison system are vulnerable and require

supportive measures to break the cycle, increased sentencing can be detrimental to family life, mental

state and increases the prima activity of the brain creating barrier towards effective community living.

At present in USA 65% of the prison system operating this 'quota' contract require substantial extra

funding which currently, is met by taxpayers. The lowest occupancy quota is sat at 80%. So, eventually

if the prison system becomes successful in meeting new targets set out to reduce re-offending, then the

tax payers will inevitably have to pay out for that success.

Another pitfall is that prisons are becoming overcrowded as a safety measure to ensure they do not

drop below the required quota. This is resulting in prisoner’s health and wellbeing needs being

stripped, health and hygiene issues, unsatisfactory conditions in the prison system and... eventually

rioting.... which is covered up by blaming the uprising on the increased use of substances in prison... and

so it goes, round, and round, and round.....

This adds to the dilemma for support rather than punishment in

a number of negative ways, the savings of placing someone into

effective rehabilitation, or similar alternative, as a means of

reducing crime and drug use, theoretically, is considerably

cheaper than continued criminal activity and recidivism, but, if

we go down that route in its entirety, then the cost of the empty

beds effectively recover any potential savings to the public

sector and eventually cost the tax-payer extra funds. So, not

only will it cost the tax-payer £35,000 to house and look after

an inmate for the year but if there are empty beds there will be an additional charge. So current

prison system is not effectively one that benefits the public sector or more so the tax payer in any way.

With statistical data and coverage of ‘full’ and productive sustainable rehabilitation reflecting low

standards and low positive outcomes.

Current example: Colorado crime statistics have

dropped by one third since introduction of legalised

medical marijuana, the result of this has been that

the occupancy rate in the three 'for-profit' prisons

has dropped below quota, and this has therefore

cost the taxpayer in Colorado an additional $2

million dollars. This then hits home and more and

more people then start to reject the positive

aspects of the decriminalisation demanding a

return to criminalisation in order to make savings in

their own pockets. Hence the battle for legalisation

being fraught with complications.

Matters for Public debate

‘In its report two years ago the European

Committee for the Prevention of Torture and

Inhuman or Degrading Treatment or Punishment

‘underlined the importance of ongoing

monitoring systems of privately managed

prisons, capable of ensuring that the State

remains in a position to discharge all its

obligations vis-à-vis persons deprived of their

liberty’ (CPT, 2002).’

This is still not securely in place and there is still no openly transparent monitoring system in

place. What is monitored is still not evidence enough to support the extension and growth of

private sector prison complexes. There needs to be more transparency and accountability and

the initial savings promised must be scrutinised.

‘The balance of evidence suggests that only a small part of the cost savings achieved

by private prisons are a result of innovative management practices. By far the

largest part can be related to employees working longer hours, with fewer holidays,

for lower pay and inferior pensions and other benefits’

(Sachdev, 2003).

The ongoing issues in the prison

system surrounding mental health

and their inability to cope with the

complex needs of those living with

mental health conditions has been a

long standing area for concern.

The Government has openly

admitted that it does not know how

many people in prison have a mental

illness, nor does know how much it is

spending to ensure adequate mental

health support and provision. More

concerningly it has absolutely no idea

whether or not it is achieving its

objectives in this particular area of

high risk.

It is therefore questionable as to

how Government can be achieving

value for money in its efforts to

improve the mental health and well

being of prisoners.

Self-harm rose by 73% between

2012 and 2016.

In 2016 there were 40,161 incidents

of self-harm in prisons and 120 self-

inflicted deaths. This reflects a dismal

failing on behalf of our government

with regards to an elevated level of

complex needs being unmet in a

potentially volatile and uncaring

environment.

The Prisons and Probation Ombudsman found that 70% of prisoners who had

committed suicide between 2012 and 2014 had mental health needs. The National Audit

Office estimate the total spend on healthcare in adult prisons for 2016-17 was

approximately £400 million. The Ombudsman does not monitor the quality of healthcare

it pays for in the privately-managed prisons it oversees.

Funding in criminal justice was reduced

by 13% between 2009-10 and 2016-17,

and staff numbers in public prisons

reduced by 30% over the same period, this

fits in with the strategy favoured by our

current government that seeks to disinvest

in public sector until it is struggling to

survive, then provide private sector

‘options’ to consolidate a seemingly

‘failing’ system. When a prison is starved

of funding and short staffed, the governor

of the facility will restrict free flow. This

can mean restricted access to healthcare

and a heightened tension within the prison

population.

Officers in the prison system have minimal to no training regarding mental health

conditions and when short staffed even if there is an awareness that is based on changes

in behaviour, there is little chance of officers being able to notice these changes. With

continued restrictions to much needed resources this is only going to get worse.

To give a better idea of the breakdown of the prison population in general….

The criminal justice system becomes a safety net for vulnerable people who are not

supported by other services in the community. And with the continuation of cuts to the

public sector outside the wall, inside the wall is at breaking point. This is becoming more

and more evident with the numerous prison riots occurring up and down the country.

“Improving the mental health of those in prison will require a step change in

effort and resources. The quality of clinical care is generally good for those

who can access it, but the rise in prisoner suicide and self-harm suggests a

decline in mental health and well-being overall. The data on how many

people in prison have mental health problems and how much government is

spending to address this is poor. Consequently, government do not know the

base they are starting from, what they need to improve, or how realistic it is

for them to meet their objectives. Without this understanding, it is hard to see

how government can be achieving value for money."

(Amyas Morse, head of the National Audit Office, 29 June 2017)

With the Government keen to

extend the model of private

provision to health and

education and to extend the

involvement of the private

sector in the criminal justice

system it is more important

than ever for there to be an

open and vigorous public

debate on the issue

Case dismissed…..no further questions