How the government can cut prison costs: privatisation
Blair Gibbs 6:17pm
The spending settlement agreed with the Treasury last October requires the Ministry of
Justice (MoJ) to make budget reductions of £2 billion up to 2014-15. And, until this morning, the settled approach was that only by reducing demand on prisons would the necessary savings be
found. After Downing Street’s intervention, the revised plans published this afternoon upend that approach.
There will still be substantial cuts to the legal aid budget and some changes to remand, but some key (though ill-conceived) measures to trim the prison population have been excised completely, with no changes to guilty plea discounts and no relaxation of the release conditions for dangerous offenders serving indeterminate sentences. Serious violent and sexual offenders will actually spend longer in prison than they do now, and the mandatory life sentence will be extended to cover a second serious offence. Crucially, the objective now seems to be to “stabilise” the prison population at around 85,000, not to reduce it.
The Government is still right to aim to reduce the prison population by cutting reoffending, but that is a ten year project. For now, the package appears to have filled a public confidence gap but created a large financial one. Even if the MoJ can bank the other savings (from legal aid, court closures, and huge administrative efficiencies), after this handbrake turn the whole package still falls short by about a quarter of a billion pounds. Ministers may be able to arrest some of the projected growth of the prison population, but only if courts can be persuaded that the reformed community sentences (with new sanctions and longer curfews) have enough bite to be used more readily.
This leaves only one option to deliver the savings: reduce the cost of prison. Reducing demand matters, but efficiencies save money too. We have tolerated for too long the high cost of our current prison system, which has risen steeply. If a prison system costing £45,000 per cell per year is unaffordable, and the system cannot be made smaller, then it will have to be made much cheaper. Commercialising prison industries to create more purposeful regimes and generate revenue to cover estate running costs — as we proposed in our latest report — is one option in the long term. But only a mass programme of prison privatisation will deliver the scale of efficiencies required to plug the hole in the MoJ’s finances before 2015.
The operational cost of HM Prison Service is around £2.3 billion a year, and average private sector running costs are (according to the CBI) between 10-15 per cent lower (excluding staff pensions). The private sector has the capacity and a good track record on performance, and the prospect of widespread privatisation would force the Prison Service to make further efficiencies, driving the costs down across the whole estate. This would be a continuation of a process that began under Jack Straw. Five prisons were “market-tested” earlier this year, with one of the largest public sector jails — HMP Birmingham — going over to the private sector. This competition process could be expanded and speeded up. Instead of putting up another round of five prisons, Ken Clarke could put the pedal to the floor and issue tenders for 25 existing prisons this year, and another 25 next year.
The new providers could take ownership within six months, and the in-year savings would start accruing almost immediately. In a free and fair competition and on the basis of the last results (which saved £21 million with just 3 prisons), after two rounds the private sector might run just short of half of the prison estate (including the 11 prisons it operates already). Whoever won individual bids, we estimate that market-testing 50 prisons could yield savings of between £180m and £320m by 2015.
The industrial relations implications are predictable but could be planned for. The Prison Officers Association — whose members would keep their jobs in the short-term — would struggle to win a public argument that was framed as a choice between cutting prison or cutting the cost of prison. The POA’s ideological opposition to the private sector — also a staple of the penal reform lobby — has been largely neutered by almost two decades of companies successfully operating prisons and driving up standards. Ken Clarke admits to having no “hang-up” over the private sector and the political opposition would not be worse than keeping prisons expensive and as a result having to ration the jail cells in unpopular and risky ways.
There is still much for prison reformers to welcome in today’s balanced package, including the emphasis on work in prison. Ultimately, the Clarke reforms failed the public permission test, and the revised ambition to stabilise the prison population is a more credible, more deliverable objective that will help the Prime Minister maintain his reputation on law and order. But the money still needs to be found, and it seems that only the private sector can save the Ministry of Justice from needing a Treasury bail-out.
Blair Gibbs is head of Crime and Justice at Policy Exchange
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Rhoda Klapp
June 21st, 2011 6:42pm Report this commentAnyone know why they cost the same as a four-star hotel?
Dan Grover
June 21st, 2011 7:13pm Report this commentRhoda, that's like asking why a Challenger Mrk II costs more than a brand new Porsche - They're very different buildings, with very different staff and very different purposes. The only similarity between them is that they both house people. But hey, tanks and cars both drive, too!
Hugh
June 21st, 2011 7:57pm Report this commentCost equates to appx £75 per day while the US system costs $74 on average http://www.doc.state.nc.us/dop/cost/
at USD 1.62/£ that is £ 46/day
i.e. 40% more. If we could gt our daily cost down to that of the US we would save £900m pa.
Rabyrover
June 21st, 2011 8:33pm Report this commentThe cost of our prisons is a good example of "Rip-Off" Britain. The cost of keeping a prisoner in America is much less than here. We should adopt their practices.
Anne Wotana Kaye 1
June 21st, 2011 9:26pm Report this commentChain gangs could provide several positive effects on the State, First, prisoners would be employed in labour that is usually done by foreigners. Fruit picking, etc. Thus, instead of paying aliens to do this work, money would be paid to the prison, saving the taxpayer the expense of board and lodgings and other expenses. No more soft options, just hard work, nourishing food, and healthy outdoor work. Rather than worrying about overcrowded prisons, the judiciary would be actively encouraged to demand custodial sentences. Road building, garbage removal, plenty of opportunities to keep occupied. The EU and Human Rights? They can be shoved where the sun doesn't shine!
Verity
June 21st, 2011 9:55pm Report this commentI am not going to bother to read the entire article becsause the whole system is antediluvian and should have been changed around 20 years ago.
It is too expensive to keep prisoners in Britain. Prisons should be outsourced to places like Thailand, which has low building costs, low labour costs and low maintenance costs. Or Somalia, or similar dumps, where the cost is even lower.
There is no justification for blowing taxpayer pounds on expensive British buildings, expensive British labour and expensive British food.
It wouldn't be pleasant for the prisoners. Who cares? The guards wouldn't be politically correct. Who cares? The food wouldn't be what they're accustomed to, but they will get used to rice. Who cares? They would be required to provide labour, like road building, in return for their keep. Who cares?
Another bonus is, their families would't be able to smuggle drugs in.
The British government would have to pay a fee for the warehousing of our scum, but it would not be even in the same universe as the cost of keeping them in Britain.
When they had served their sentence, it is unlikely that they would ever commit another crime.
Prisons are a waste of taxpayer pounds.
Fatbloke on tour
June 21st, 2011 11:22pm Report this commentBG @ Right Wing Dog Boiler Central
I've got a great idea ...
... why don't we get Southern Cross into show us how its done?
Away and bile yer heid ya rocket.
Baron
June 21st, 2011 11:58pm Report this commenta fail-proof three step cost reduction plan
move all those with mental disabilities from prison into secure private accommodation, house arrest with strict conditions for those for possession,
quadruple sentences that currently attract more then a year imprisonment, have the prisoners do at least 8-hour work, all privileges to be earned.
re-introduce capital punishment for crimes that currently attract genuine life sentences.
The cost of implementation - negligible, the cost savings for the service - huge, the benefit for the law abiding - immeasurable.
ozconspiracyhouse
June 22nd, 2011 7:40am Report this commentIf you privatize it, the taxpayer will be raped even further. Now it has to run at a very large profit. Locking up drug users is a large part of the problem in reality and the economy being screwed up further leads people to crime. Privatizing is not the solution, its a leaky band aid that only helps further promote a police state. Now there is incentive to lock people up. Its all an Orwellian nightmare, when will people wake up?
Yam Yam
June 22nd, 2011 9:29am Report this commentI always remember how one week during the Major administration the Left made great headlines out of the fact that prisoners often escaped from the private security companies that were transporting them to and from court... until someone spoiled the fun by inconveniently pointing out that the state's own court transport guys actually lost even more prisoners!
JimW
June 22nd, 2011 10:03am Report this commentWhile you can argue that the cost per prisoner in the states is less, the US has by far the highest proportion of an incarcirated population of any country on the planet. That is what happens after lobbyists slowly get their way after a number of decades. Any industry where the interests of profit are counter to the interests of society should not be privatised. Handing out small contracts to the private sector is fine - mass privitisation is not.
Baron
June 22nd, 2011 11:34am Report this commentVerity, amazing isn’t it, this brilliant idea of yours has been suggested before, the aged buffoon that calls himself Clarke says he’s listening to suggestions, never heard him mentioning the outsourcing of the scum offshore, why not, it would kill two birds at once, securing cash for the developing country, lowering the cost of the prison service for us, the public would welcome it, I reckon.
and another thing: for me it ain’t primarily the cost, it’s the lack of efficacy that irks most, we have as a country by far the highest recidivism rate, the bloody set-up ain’t fit for purpose yet the political gnomes keep yapping incessantly about re-this and re-that, just punish the bastards, make them pain, when everything has been tried that’s the only re that works, trust me, I know, I’ve checked.
Fatbloke on tour @ 11.22:
It’s thee fat what make you lose sanity, lad, slim, you’ll get better
Hexhamgeezer
June 22nd, 2011 5:00pm Report this commentHow we can save costs? Revoke the Human Rights Act. Deport all foreign criminals with no right of return. Any families (fake or otherwise) are given the right to accompany them to their homeland (we will pay). Prisoners work to earn the right for additional food or privileges (TV etc) to assist rehabilitation. Execute around 600 murderers p.a to save about £27m each year.
The savings available ditching the HRA will be enormous and I cant think of any sensible argument why we shouldn't do it.
Verity
June 22nd, 2011 5:25pm Report this commentBaron - I guarantee that three or four or 10 or 20 years (is anyone in Britain even sentenced up to 20 years any more?) in a Thai prison will have them straightened up and flying right by the time they get released in Britain again. I understand it is an experience that people don't want to repeat.
Even in highly civilised Singapore, the prisoners are fed primarily on rice. No three course meals with a choice of entré. I believe I remember reading that they sleep on mats on the floor.
Anyway, that's by the way. Singapore is rolling in gravy and would never let our scum off a plane.
However, I have just thought of an additional advantage of Thailand! Most of the prisoners will hang around in Thailand, once they get out, visiting the bars to watch unusual stunts with ping pong balls.
Inevitably, they will coincidentally meet a Thai woman. She will agree to marry him but insist that she doesn't want to live with her family (he will agree whole heartedly), so they will need to a buy a house.
Sadly, foreigners are not allowed to own property in Thailand, so the bride will reluctantly agree to have the property in her name.
Within a year, he will be having dizzy spells and feeling a bit off. It will get worse. I need not continue. When I was living in Asia, I read too many of these awful stories from Thailand.
However, it is one way of reducing the prison population.
Anne Wotana Kaye 1
June 22nd, 2011 7:45pm Report this commentVerity
June 22nd, 2011 5:25pm
Verity, I love it. "Anna and The King of Siam" had nothing on this!
Mr Oulton
June 23rd, 2011 2:58pm Report this commentHow are we going to reduce the cost of our prisons?
Yes, let's privatise them. Let's introduce a profit motivation to locking people up. That's a good idea. And I'm sure the companies who step in to run these things will do so with absolutely problem whatsoever. They're bound to be run effectively and efficiently.
Oh yes, and I'm absolutely certain that the taxpayer won't be required to step in, at enormous expense when they bore of the tiresome task of running prisons, or realise it just isn't profitable.
Hold on, how about instead we reform our sentencing arrangements, maybe look at how sensible it is to lock up pathetic drug addicts left, right and centre? Oh wait...
Mr Gibbs. Please declare your interests and that of the Policy Exchange.
jon hoey
June 27th, 2011 5:44pm Report this commentBlair Gibbs wants to take a look in a private sector prison they put the profits of their shareholder before the safety of staff or prisoners. Blair Gibbs has not got a clue what goes on in prisons, they are not safe places anymore staff safety and control and order are being severely jeapordised with the year on year cuts to budgets - i can only predict one outcome and that is a return to the scenes we saw in manchester in the 90s riots,disorder and anarchy. The article is totally flawed based on the right wing ideology. You should be ashamed of yourself Mr Gibbs with your immoral argument what next the police or Army?
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