Reid Plans Mixed Economy in Criminal Justice System

The home secretary, John Reid, has drawn up far-reaching plans to create “a true mixed economy” in the criminal justice system, including putting entire local probation services out for competition. A “privatisation prospectus” quietly drawn up by the home secretary envisages a five-year programme of “competitions” during which £9bn-worth of probation and prison services – a quarter of the total spent – are to be offered to the private security industry and voluntary organisations.

Half the 8,000 new prison places promised by Mr Reid to cope with the record prison population will now be provided in jails built and run by private security companies, with the rest of the extra places built within existing jails.

On top of this programme, bids are to be invited from the private and voluntary sectors to run prisons or local probation areas which fail a performance test or fail to deliver agreed improvements.

The threat is far from academic as five of the 42 local probation areas have already failed “fit for purpose” capability tests and have been given six to nine months to improve or face being privatised. Those involved are London, Gloucestershire, Norfolk, Cambridge and Thames Valley.

The scale of the programme shows that Mr Reid wants the Home Office to be at the forefront of the government’s attempts to accelerate the pace of public service reform before Tony Blair leaves Downing Street. In the jargon he calls it using “public value partnerships” to create competition to drive up standards.

Mr Reid says performance testing and competition for prison contracts has already had a big effect: “I want to build and extend on this approach in a rapid and vigorous way to the probation service and raise standards there too.”

In the Home Office document setting out his intentions, Mr Reid says he values the public sector and wants it to have a continuing role. “However, all current providers should be open to challenge and able to demonstrate that the services they offer are the best available. We must do all we can to get the best possible service provision.”

But the unions fear it will lower standards: “The government’s obsession with targets and privatisation is undermining frontline work with offenders,” said Harry Fletcher of the National Association of Probation Officers. “There is a real fear that fragmentation of probation will lead to less cooperation between agencies, confusion, and will lower the standards of supervision.”

The former home secretary Charles Clarke decided to postpone legislation opening up the probation service to competition in the face of hostility from some Labour MPs. But Mr Reid hopes to use existing powers and coercion to expand the market in the criminal justice system. Local probation areas are now to be “required on a voluntary basis” to double and double again this year and next the proportion of services they contract out, with a goal of 10% or £50m-worth of adult offender services run by the private or voluntary sector providers by 2007-08.

These will include some of the unpaid work programmes carried out by offenders in the community, routine forms of supervision of offenders and even victim contact services.

Although there are about 1,100 different organisations already providing probation and prison programmes for offenders in England and Wales, the value of their contracts represents only about 2%-3% of work with offenders.

But Mr Reid says he will try again with legislation to go much further. He envisages that from April 2008 around £250m a year of probation work, mostly involving direct interventions with offenders and services with lower risk offenders, will be privatised. This will include private companies organising unpaid work schemes – which used to be called community service – including monitoring attendance, with voluntary organisations actually supervising offenders on the schemes. Offenders now do about 5m hours of unpaid work each year, with contracts worth around £100m.

The idea is that the public sector probation trusts which are to take over the running of each local probation service will concentrate on managing only higher-risk offenders in the community.

Graham Beech of Crime Concern, one of the voluntary bodies most likely to take over probation work, said: “With reconviction rates remaining unacceptably high and increasing in the recent past, now is the time to turn to some radically different models of delivery.”