The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts, today said:
“The Ministry of Justice’s reforms to the Probation Service carry significant risks. It intends to introduce new private and voluntary sector providers, bring in a payment by results system, create a new National Probation Service and extend the service to short-term prisoners, all in a very short period of time.
We recognise that the reform programme is still developing, but the scale, complexity and pace of the changes are very challenging, and the MoJ’s extremely poor track record of contracting out – such as the recent high-profile failures on its electronic tagging contracts – gives rise to particular concern.
The Ministry intends to pay Community Rehabilitation Companies by a combination of payment by results and fee for service. This is complex, untested and remains subject to agreement with providers.
The Ministry must ensure that the new contracts contain open-book accounting arrangements and allow the National Audit Office full access to contractual information, so that we can follow the taxpayers’ pound and be assured that value for money is being served and contractors are not gaming the system as has happened in the past.
The supervision and management of offenders is an essential public service that must be maintained in the event of a supplier failing or withdrawing from the contract. The Ministry pointed to the existence of the National Probation Service as a provider of last resort, but could not provide details of its contingency plans as commercial negotiations are still in progress.
The provision of rehabilitation services will be extended for the first time to those sentenced to less than 12 months in custody, an estimated 50,000 offenders. This represents a 22% increase on the 225,000 offenders managed by the probation service during 2012-13. However the Ministry could not tell us how this significant increase in the case load of probation staff would be managed.
The Ministry must ensure that the current ‘good’ standard of performance is maintained during the transition to new providers and the increase in offender numbers.
The new arrangements have not been fully piloted and the Ministry expects the new National Probation Service and the 21 Community Rehabilitation Companies to begin operating from 1 June 2014, allowing only a limited opportunity for parallel running of the new arrangements during April and May 2014.
We therefore welcome the Ministry’s commitment to only proceed at each stage of the programme if it is satisfied it is safe to do so and that value for money will not be jeopardized."
Conclusions and Recommendations
The probation service in England and Wales supervised 225,000 offenders in our communities during 2012-13, at a cost of £853 million. The service is currently delivered by 35 Probation Trusts which are independent Non-Departmental Public Bodies, reporting directly to the National Offender Management Service. As part of the Ministry’s Transforming Rehabilitation reforms, the Trusts will cease to operate from 31 May 2014 and will be abolished shortly afterwards, to be replaced by a National Probation Service and 21 Community Rehabilitation Companies. The Ministry anticipates that savings generated by the reforms will allow the provision of rehabilitation services to be extended for the first time to an extra 50,000 offenders sentenced to less than 12 months in custody.
The scale, complexity and pace of the reforms give rise to risks around value for money which need to be carefully managed. We welcome the Accounting Officer’s assurances that the Ministry will not proceed with the arrangements unless it is safe to do so. The Ministry expects the new National Probation Service and the 21 Community Rehabilitation Companies to begin operating from 1 June 2014 with only a limited opportunity for parallel running of the new arrangements during April and May 2014. The movement of staff, records and implementation of the arrangements required to make the new structures operate are ongoing. Initially the Community Rehabilitation Companies will be in public ownership pending a share sale, expected in time to launch a payment by results mechanism in 2015. The Ministry told us that it remains on track to deliver the proposals on the current timetable.
The Department must ensure that the current standard of performance is maintained during the transition to new providers and the increase in offender numbers to be covered by the reformed service. During 2012-13, the performance of all Probation Trusts was assessed by the Ministry as either ‘good’ or ‘exceptional’. The Ministry anticipates that savings generated by the reforms will allow the provision of rehabilitation services to be extended for the first time to offenders sentenced to less than 12 months in custody. The 50,000 offenders involved represent a 22% increase on the 225,000 offenders managed by the probation service during 2012-13, which will result in a significant increase in the case load for probation staff. The Ministry was unable to articulate exactly how the additional caseload will be managed, but believed it would be achieved as a result of structural changes and from new ways of working. The Ministry will need to avoid repeating mistakes which we have already highlighted in a previous Committee report.
The Ministry’s poor track record of managing procurements and contracts raises particular concerns given the scale and ambition of this programme. The Ministry recognises that its performance in managing procurements and contracts has been poor, with the failures revealed in its electronic tagging contracts and the contract for providing interpreters to the Courts. The Department is addressing this through wider changes to contract management procedures, for example by bringing in better equipped people on short-term contracts who are commercially focused to manage the contracts effectively. The Ministry is recruiting and training staff who can manage contractors and contracting over the long term. The Ministry maintained that appropriate weight will be placed on assessing the quality of the bids received and the organisations putting them forward. Contracts will be designed to prevent Community Rehabilitation Companies changing ownership without prior discussion with the Ministry and contingency arrangements are being considered to ensure that continuity of service will be maintained during the procurement and after the sale of the Community Rehabilitation Companies. The Ministry also plans to apply the lessons from past PAC reports and ensure that contracts have appropriate penalty clauses up to and including termination for non-performance.
The supervision and management of offenders is an essential public service that must be maintained in the event of a supplier failing or withdrawing from the contract. The supervision and management of offenders is a vital public service. The Ministry acknowledges the importance of contingency planning for a supplier collapsing or prematurely leaving. As commercial negotiations were in progress when we took evidence the Ministry was unable to share the specifics of its plans in this area, but it pointed to the existence of the National Probation Service as a provider of last resort alongside the new companies.
Recommendation: The Ministry must establish a clear mechanism for identifying suppliers at risk of failing or withdrawing from their contracts that includes setting out what action it will take in these circumstances to maintain an adequate service.
The proposed mechanism for paying Community Rehabilitation Companies by results is quite complex, untested and remains subject to agreement with suppliers. Payments to providers will comprise two elements: a fee for service and payment by results. Payment by results will be on the basis of achieving statistically significant reductions in reoffending against a baseline. Over the life of the contract the fee element will reduce to maintain pressure on providers to focus on reducing reoffending to maintain income streams by increasing their payments for results. The proposed payment mechanism has been reviewed by consultants and by some probation staff, albeit not in an operational environment. The Ministry is seeking to address risks by including open book provisions in the contracts with providers, but these are subject to commercial negotiation.
Recommendation: The Ministry should set out how it intends to satisfy itself that the proposed payment mechanism is workable. As we recommended in our recent report on contracting out public services, the Ministry must include open book accounting arrangements and ensure that they are used effectively. We would also want the NAO to have full access to contractual information that is relevant to assuring Parliament that value for money is being served in these contracts.
PS - Don't expect any comment from Napo HQ - I'm fairly sure there will be continued radio silence.
The government will not listen to any of this.
ReplyDeleteSome observations on the excerpts from the PAC report above:
ReplyDelete"The provision of rehabilitation services will be extended for the first time to those sentenced to less than 12 months in custody, an estimated 50,000 offenders." Not true. It was previously the case that a service was available, albeit not on statutory basis. This is a revision of historical fact that NAPO and others have failed to correct.
"The Ministry was unable to articulate exactly how the additional caseload will be managed, but believed it would be achieved as a result of structural changes and from new ways of working." How can "belief" be an acceptable basis for the implementation of such a massive and risky policy?
"The Ministry anticipates that savings generated by the reforms will allow the provision of rehabilitation services to be extended for the first time to offenders sentenced to less than 12 months in custody." At no time has the MoJ claimed this is about making savings; they've cited reducing reoffending rates (based on skewed data) and ideology, but never savings. In fact when before the PAC the senior MoJ staff argued the savings would come from elsewhere within the MoJ budget to pay for these reforms. The reforms are vastly expensive and have generated the need for savings.
"The Ministry pointed to the existence of the National Probation Service as a provider of last resort, but could not provide details of its contingency plans as commercial negotiations are still in progress... the Ministry could not tell us how this significant increase in the case load of probation staff would be managed." Doesn't this speak for itself?
It beggars belief that this has not been highlighted, challenged and dismantled by NAPO, the professional organisation and trade union looking after the interests of probation service staff. It looks a no-brainer on paper. Unless... ????
If someone was prepared to give me £80k a year I'd be all over the moj's pisspoor TR policy like a rash. What the feck do they do in Shivery Row?
Delete"The Ministry pointed to the existence of the National Probation Service as a provider of last resort, but could not provide details of its contingency plans as commercial negotiations are still in progress... the Ministry could not tell us how this significant increase in the case load of probation staff would be managed."
DeleteThis bit makes me laugh in an angry sort of way. There will be barely enough capacity/staff in the NPS to manage there own circumstances. With being asked to write psr a week, manage high risk offenders, do all the risk assessments, cut budget. Experienced staff leaving or retiring how the hell are they going to take this back.
The government doesnt give a fuck, this will be a disaster but what do they care.
The lies are manifest and manifold. Even the PAC have been bamboozled.
Delete"The Ministry anticipates that savings generated by the reforms will allow the provision of rehabilitation services to be extended for the first time to offenders sentenced to less than 12 months in custody."
The PAC were told in March 2014:
Q3 Chair: Hang on a minute. You have a 10% savings target for 2014-15. Does that not cover the probation service?
Dame Ursula Brennan: We have deliberately concluded that we want to protect spending around probation in order to be able to extend it.
Q4 Chair: So you do not have to find 10% in 2014-15?
Dame Ursula Brennan: No.
Chair: Okay. But once the new service is set up, the way you will fund the 50,000 extra offenders is by finding savings elsewhere?
Dame Ursula Brennan: We will be obliged to find savings in the Ministry of Justice budget, and we have been doing that.
I raised the 'last resort' issue as a FOI a while ago - got nowhere, as usual - they really do not know what they are doing at MoJ and worse, NAPO cannot find their way out of a storeroom somewhere at the aptly named Shivery Row!
ReplyDeleteGood article on'weightless society' by Guardian
ReplyDeletehttp://www.theguardian.com/commentisfree/2014/may/20/cameron-weightless-state-public-services-beyond-control?CMP=twt_gu
Quote extracted from that article by Polly Toynbee linked above: -
Delete"From 1 June the probation service will be abolished and parcelled into 21 community rehabilitation companies to be sold off to private businesses, partnered by fig-leaf voluntary groups. But today the parliamentary public accounts committee flashes a red-light warning. Margaret Hodge, the committee's chair, warns that "the scale, complexity and pace of the changes are very challenging" following the "Ministry of Justice's extremely poor track record in contracting out"."
Sadly the last 3 DHRs that I'm aware of didn't hit the criteria of 'National Probation Service the provider of last resort' and Children's Safeguarding doesn't really get a mention in the changes!
ReplyDeleteDHRs = ??
ReplyDeleteThere is nothing preventing practioners communicating directly with the PAC, or communicating with them via their own MP to alert them to the reality of TR so parliament does not have to rely on the MOJs 'belief'.
It seems to me the ways TR can be stopped is by The Government changing its mind or being opposed and defeated by MPs and/or Peers, by it collapsing - which is what I predict is inevitable unless practitioners collude so it 'works' in an inferior way to how probation previously worked, or finally practitioners - even now - publicising the reality and the media finally take notice and investigate and publicise the results.
Mr A S Hatton - the 'reality' has been highlighted many times over on this site and elsewhere. I have written to the PAC and others on a regular basis with my concerns. I have raised FOI requests, only to have them batted off or delayed or ignored. They are being pursued. I have written to my MP (waste of space, time & oxygen). I have written to the press. I have copied most of these efforts to napo. Not a peep from anyone - except the unhelpful tactics of the FOI handlers.
DeleteNo-one gives a flying fig about the scandalous behaviour and outright lies of the MoJ, the SoS, NOMS or the Trusts. No-one cares abut the pay-offs, the back-room deals, the criminal history of the bidders, the utter silence of napo, the shafting of a professional workforce.
Parliament feeds parliament feeds parliament. Rich get richer, poor get poorer. Care of the most damaged children will soon be sold off to the same shysters who are bidding for probation work.
The deed is done Mr A S Hatton. The Collaborators have ensured it is so. Those who have been silent, who have enabled, who have taken the shilling, who have profiteered, or who say they were only following orders.
I wrote to my MP and received a response about how important it is to cut costs and reduce the strain on public finances etc etc. I live in an out and out Tory area and unfortunately Tory MP's in particular love outsourcing. Its part of their plan to drive down wages (apart from their own and their friends in the city) so that this country can become 'more competitive' globally. Lib Dems appear less keen but it seems that this is one of the deals they have done so they can push through their free school lunches for middle class children plan.
ReplyDeleteTrouble is that the people who DIE as a result of these policies will invariably be the children of poor people so, in the minds of the parasitic elite, the is nothing more than collateral damage. Entirely defensible in their skewed eyes. Damn them, I say.
ReplyDeletehttp://www.varsity.co.uk/comment/7231
ReplyDeleteChris Grayling: the worst Cabinet minister in recent memory?
DeleteA bold claim, I hear you cry - but Chris Grayling is something special. This is a man who’s walked the unusual path from middle management at the BBC to the heady heights of Secretary of State for Justice – as well as being the first Lord Chancellor without a law degree for 400 odd years. Grayling comes from an illustrious political background: he’s previously been implicated in the expenses scandal, and is known for misusing statistics and making homophobic comments. But let’s take a walk around the carnival of incompetence he’s put together in his two-year tenure at his current post.
Being Secretary of State for Justice is generally a good position to be in for a politician, especially a Conservative one. The majority of people don’t particularly care about the welfare of prisoners and you can enact pretty much any policy you want as long as it’s seen as “tough on crime”. Of course, that’s as long as you make sure to forget that prison is supposed to rehabilitate, and not merely punish. In this vein, Grayling enacted a harsh new incentive programme in 2013 that made it harder for prisoners to access “luxuries” unless they behaved to the guards’ satisfaction. Controversially, the list of luxuries included books that had been given them by family members, and there was also a cap on how many books prisoners were allowed in their cells. If this doesn’t sound so bad, I invite you to sit inside a closet for 22 hours a day with only the Reader’s Digest condensed version of Moby Dick, and see if this improves your state of mind. We don’t yet know what effect this incentive programme has had on re-offending rates and general prisoner behaviour. We do know that in the years since Grayling was installed, prisoner suicide rates have soared to a ten-year high, and instances of prisoner homicides are at their greatest since 1998. Say what you like about Michael Gove but I don’t think his policies have resulted in any deaths yet. Perhaps this is the Lord Chancellor’s novel way of solving prison overcrowding.
More recently, Grayling has been swimming in the pool of pig waste he produced by bafflingly deciding to cut large amounts from the legal aid budget. This caused a series of strikes by members of the legal profession and has even caused the complete abandonment of one case. At the start of this month the Prime Minister’s brother, Alexander Cameron QC, convinced a judge that the defendants in a relatively minor financial fraud case could not be tried fairly because, due to fee cuts, no lawyer would take their case. The Financial Conduct Authority (FCA) appealed that decision this week but if the judgement is upheld then it could set a precedent for other prosecutions, including those resulting from Operation Tabernula, the FCA’s largest ever investigation into insider trading.
The FCA is understandably annoyed by this, and it’s made worse by the fact that the Lord Chancellor had an entire year to solve this problem, longer if you count warnings that this would happen before the cuts were even enacted. Leaving it until the last possible second, Grayling took the extraordinary step of intervening in this week’s appeal. Hypocritically, he appointed a high-priced lawyer to argue that, although the Lord Chancellor was “entirely neutral” to whatever the outcome of this trial, the defendants would get a lawyer soon because he will place job advertisements in newspapers "as soon as this weekend" to expand the Public Defender Service. The Judge then refused the Lord Chancellor’s desperate request to add new evidence, leaving Grayling’s advocate to give a paltry two minute statement that added nothing to the case, all at the taxpayer’s expense. The FCA may very well win the appeal, but then the government will be left in the embarrassing position of paying more money to public defenders to work the case than they would have paid to independent lawyers even without the cuts.
The most revealing quote to come from this appeal was that the Lord Chancellor expected that “matters would be somehow be resolved” without any of his input during this year of dallying. This will probably sum up Grayling’s legacy; imagine him, a man who’s jumped off a run-away steam roller only to land right in front of it, silently staring, as it inches over him at a snail’s pace. I understand a Conservative minister taking a laissez-faire approach to the economy, but a laissez-faire approach to the justice system is a step too far. Grayling embodies all the worst aspects of this government: cutting for the sake of cuts, the blind ideological zeal of Michael Gove, Iain Duncan-Smith’s contempt for the worst off in society, and on top of all that a healthy dollop of unthinking idiocy all his own. I defy you to find someone who has done more harm with their position of responsibility.
DeleteMatt Cooper
http://www.theguardian.com/commentisfree/2014/may/20/cameron-weightless-state-public-services-beyond-control
ReplyDeleteThe most terrible power the state can wield is to take children away from their parents for ever. The idea that companies such as Serco and G4S, already under investigation by the Serious Fraud Office, should be invited to make a profit from these agonisingly sensitive judgments horrifies the leading experts who wrote to the Guardian last week.
DeleteIn writing commercial contracts there can only be perverse financial incentives either to take more or fewer children into care. Last week I reported on a private equity company promising an 18% return on investment in children's care homes, the sales representative relishing how the "naughtier children pay more". Everything can be monetised, even acute distress. But this one is the ultimate test: if Michael Gove can privatise child protection then anything and everything goes.
This government's privatisation revolution is accelerating at breakneck speed. In just the first three months of this year, the value of public-sector outsourcing has shot up by 168%, as monitored by the specialist Arvato's outsourcing index. A quarter of these contracts went to offshore companies – state funds flying abroad, of no benefit to UK employment or tax revenues. From prisons to the NHS, from the work programme for the unemployed to running military bases, from training RAF pilots to Serco's management of Yarl's Wood immigration removal centre,"the outsourcing industry is in good health", reports Arvato.
From 1 June the probation service will be abolished and parcelled into 21 community rehabilitation companies to be sold off to private businesses, partnered by fig-leaf voluntary groups. But today the parliamentary public accounts committee flashes a red-light warning. Margaret Hodge, the committee's chair, warns that "the scale, complexity and pace of the changes are very challenging" following the "Ministry of Justice's extremely poor track record in contracting out".
Backed by the full weight of a government majority on her committee, her excoriation of the plan is formidable. "High-profile failures" of MoJ electronic tagging and court interpreter contracts "give rise to particular concern", Hodge says, noting that there are no contingency plans for failure. The committee says that "this complex, untested" system of payment by results and fee for service needs more transparency to stop "contractors gaming the system, as has happened in the past".
The committee expresses profound scepticism that privatisation will yield such savings that within its existing £835m budget, companies will be able to treat an additional 50,000 offenders released from short sentences.
The month when a man nicknamed Skullcracker and two other murderers went on the run from prison is a moment to consider that probation is a serious matter. Utility firms cheating their customers is a disgrace, but if commercial probation services cut corners for profit by monitoring offenders less intensively, that would be a public danger.
Only ideology drives this privatisation, as the committee points out that all 35 existing probation services to be abolished are rated "good" or "exceptional". If serious crimes committed by offenders while on probation start to rise, this will be embarrassingly newsworthy. Just consider the multiple privatisation failures so far: Iain Duncan Smith's outsourced Work Programme firms miss their targets by miles, while A4e's contract for mandatory work activity was terminated as "too great a risk". Yet A4e is passed as fit to take on a probation contract – despite having zero experience in the field.
Another Work Programme contract crashed last week when Bright International was disqualified for "malpractice". The company, retraining the unemployed for £1.3m, boasted a 100% pass rate but is accused of handing out qualifications to those who failed or never completed courses.
But bad contracts for complex services are endemic, and not a Tory preserve. Plenty of privatisations failed under Labour – the worst being Gordon Brown's London Underground debacle. Labour had to abolish individual learning accounts in a hurry when massive scams were found in training companies. Labour's intermediate treatment centres, outsourcing NHS surgery to private companies, did cut waiting lists, but at hugely inflated cost.
DeleteThe public account committee's report has a weary, seen-it-all-before tone about many previous privatisation failings. Contracts, they say, "have been too large and too complex". Experts in contract writing are being rushed in by the MoJ to negotiate the private probation contracts, shoring up a depleted civil service that is usually outsmarted by the private sector.
The committee warns that "Large companies such as Serco and G4S hold major contracts, creating the problem of over-dependency", so a few contractors risk becoming "too big to fail". The temporary ban on Serco and G4S lasted a very short time, though both are still under investigation. Avarto notes that despite the committee calling for diversity, the dominant position of the "big four" – Serco, G4S, Capita and Atos – is under no threat. David Cameron says he will "release the grip of state control", but he is replacing the state with a few firms that could become beyond anyone's control.
The government is deaf to warnings, as Cameron, Oliver Letwin and Francis Maude's propel their plan for "the weightless state" at breathtaking speed. The sweeping scale of this ambition is barely remarked on in the reporting of politics. For now it passes unnoticed by most citizens, few seeing how fast firms like Virgin Care are devouring new contracts, as they cannily keep the NHS branding.
The pace of this outsourcing revolution is set by the fear of being a one-term administration. As Margaret Thatcher sold off the nationalised industries, so her political heirs are intent on leaving an even more radical legacy – selling off the state itself.
Polly Toynbee
Fit to bid again because of excellent corporate renewal?
ReplyDeleteG4S loses third UK chief executive
By Gill PlimmerG4S, the world’s biggest security services group, has parted company with its third UK chief executive in less than two years, underscoring the continued turmoil at its British division.Eddie Aston, who had been recruited from Deutsche Post DHL less than a year ago, has left the security company after just six months in the post. G4S declined to outline the reasons for Mr Aston’s departure but confirmed that he left the business at the end of last week.He will be replaced on a temporary basis by Peter Neden, who was previously regional managing director of G4S outsourcing services for the UK and Ireland.The departure means that G4S’s British division will have four UK chief executives in less than two years and comes after yet another torrid six months for the security company, which employs 620,500 staff in 115 countries and is the world’s biggest private sector employer after Walmart.The company remains under investigation by Britain’s Serious Fraud Office – along with rival Serco – for overcharging the government for tagging criminals who were dead, in prison or never tagged in the first place.It has also faced criticism for its management of Oakwood prison in Wolverhampton, central England, which has faced serious problems, including rooftop protests, since it opened in April 2012.Mr Aston took up his post at G4S at a time when the company was banned from winning new public sector contracts.The company has since been given the all clear and there are signs that it has started to repair its relationship with the authorities. Last month it won the largest batch of contracts running the Department for Work and Pensions’ new community service programme for the long term unemployed, which is worth £300m over several years.But a restructuring of the businesses UK division, including job losses, is said to have left many staff demoralised.The series of scandals that have dogged the company has claimed a series of scalps, starting with David Taylor Smith, who was fired as chief operating officer after G4S failed to deliver the required number of security staff to guard the 2012 Olympic Games in London, forcing the army to make up the shortfall.He was replaced by Richard Morris, who quit last October in the wake of the discovery that G4S and its rival Serco had been overcharging the government for tagging criminals.The departure of Mr Aston, who replaced Mr Morris, will come as a blow to Ashley Almanza, chief executive, who has been trying to restore the company’s fortunes since taking over the job in June 2013, just a month after being appointed chief financial officer.His predecessor, Nick Buckles, stepped down after delivering a profits warning in the wake of the Olympic Games blunder, which he admitted had been a “humiliating shambles”.The company has also come under pressure over its contract with the Australian government to run the Manus Island detention centre for asylum seekers in Papua New Guinea. It also faced allegations of abuse and torture by staff at South Africa’s Mangaung prison, which is run by G4S, at the end of last year. The company denies the claims.G4S remains one of the biggest suppliers to the British government, and booked revenues of £1.3bn from UK public sector and central government contracts in 2012-13, while Serco booked £3bn.
I just looked at NAPOs website. The last press release from them was 30th March. What is going on?
ReplyDeleteZilch - time for DIY
DeleteTania Bassett has just Tweeted "just heard it will be put on in the morning. IT issues."
Deletehttps://twitter.com/taniabassett/status/468785379135721472
Really?
DeleteAnd I have JUST had Email with link to "Campaign Bulletin 39" Here - http://email.napo.org.uk/index.php?a=D4C23408AAE3A4EE9C307F84A45C07E0AC050C1C7A3B98206F819F6A97F4C55E&f=CAMBULL39.doc
DeleteIt's not exactly a campaign bulletin. More a GCSE ICT desktop publishing project, only without the content.
DeleteOoohh ouch! lol
DeleteTwo more legged it from cat D prison, this is yet another good day for Grayling.
ReplyDeletePapa
The more intolrable you make prison life the more attractive fleeing from it becomes.
DeleteHeard on the news that one guy was on remand... in a Cat D?
Deletehttp://m.bbc.co.uk/news/uk-wales-27471666
DeleteRules on criminals in open prisons will be tightened up after police broke up a £1m drugs ring run from inside jail.
DeleteSeven men involved in conspiracy to traffic mephedrone were jailed for a total of more than 30 years after a trial at Swansea Crown Court.
Surveillance footage given to Week In, Week Out shows gang leader Matthew Roberts, 42, taking a package of drugs while out driving a prison van.
Prisons Minister Jeremy Wright said public safety must not be compromised.
Police secretly filmed the gang in a joint operation between south and mid Wales regional organised crime squad Tarian and the National Crime Agency during Operation Pierre.
It shows how Roberts, an inmate at Prescoed open prison in Monmouthshire, was allowed to drive the prison van off-site, which gave him the freedom and opportunity to organise the gang's operations.
The undercover footage shows him buying a mobile phone - against prison regulations - and meeting a courier, Colin Beck, who gives him a consignment of drugs.
Roberts, from Maesteg, was also secretly recorded talking to another member of the gang - in a secure prison with a mobile phone - about buying drugs worth tens of thousands of pounds.
The footage shows another of the convicted men, Matthew Pugh, 27, from Port Talbot, carrying a barrel of benzocaine, which is used for mixing with cocaine, into a house in the town.
The Ministry of Justice has promised to make changes to open prisons "as a matter of urgency" in the wake of the trial and a series of escapes.
Glyn Travis, of the Prison Officers' Association, said: "The risk assessment when a prisoner is in an open estate is too late because that's when failure is already occurring.
"That's when a prisoner may well go underground and be an ideal prisoner within a prison setting but actually they're running organised crime from the open prison estate."
Supt Rhiannon Kirk, who leads Tarian, said the police, the Prison Service and other agencies had identified ways of working better together.
"We need to make prison a really hostile place and a disruptive place for this sort of crime, and any kind of crime," she said.