Serco in £415m deal for new jail at Belmarsh

Outsourcing giant Serco signed a deal today to run a new London jail — despite concerns that public spending cuts could mean less work for support services firms.

Serco, which runs the Docklands Light Railway, said its consortium agreed a £415 million contract with the Ministry of Justice to build and manage Belmarsh West prison.

Situated next to high-security Belmarsh jail, it will house 900 male prisoners. “Construction works will begin immediately, with completion expected in the first half of 2012. Equity and debt finance has been secured from third parties,” the company said.

The complex will be built with Serco’s construction partner, Swedish firm Skanska, for whom the deal is worth £100 million.

The consortium involves two voluntary sector organisations, social care group Turning Point and youth charity Catch22. The deal will run for 2 1/2 years. The consortium has also been named preferred bidder to run a prison in Liverpool. It expects to sign that contract later this year.

Last week, Justice Secretary Kenneth Clarke said deep cuts in public spending would require a new approach to dealing with crime and punishment, with more emphasis on community sentences to curb reoffending rates. Britains’ prison population reached a record 85,201 May.