Competition for prisons - Public or private?
Julian Le Vay
Policy Press 16 Dec 2015
"This is an intelligent, challenging analysis demonstrating very clearly what has been lost, in terms of making prisons more effective and more humane, by the abandonment of competition. Much the best history of the period I've read."
Sir Martin Narey, first CEO of National Offender Management Service and adviser to the Secretary of State for Justice
"A fascinating book relevant to all interested in politics. Its superb analysis of the development of private sector prisons provides an excellent case study demonstrating the weaknesses of our political system."
Philip Wheatley CB, former Director General of the National Offender Management Service and former Director General of HM Prison Service
About This Book
"This is an intelligent, challenging analysis demonstrating very clearly what has been lost, in terms of making prisons more effective and more humane, by the abandonment of competition. Much the best history of the period I've read."
Sir Martin Narey, first CEO of National Offender Management Service and adviser to the Secretary of State for Justice
"A fascinating book relevant to all interested in politics. Its superb analysis of the development of private sector prisons provides an excellent case study demonstrating the weaknesses of our political system."
Philip Wheatley CB, former Director General of the National Offender Management Service and former Director General of HM Prison Service
A quarter of century has passed since Margaret Thatcher launched one of her most controversial reforms, privately-run prisons, and the role of the private sector in delivering public services continues to be one of the big political issues of our time. This book, by a critical professional insider, re-assesses the benefits and failures of competition, how public and private prisons compare, the impact of competition on the public sector’s performance, and how well Government has managed this peculiar ‘quasi-market’. Drawing on first person interviews with key players, including Chief Executives and prison managers in both sectors and Chief Inspectors, Julian Le Vay uses his former role as Finance Director of the Prison Service to give a wholly new analysis of comparative costs and of the impact of constant changes in competition policy. He draws out lessons from the parallel stories of the SERCO/G4S billing scandal, privately run immigration detention and the more radical approach now being taken on outsourcing probation, and looks in detail at four prisons, publicly and privately run, that ‘failed’. Concluding with a critique of the future shape of competition, he also draws some general conclusions on the way government works. This is vital reading for anyone interested in the role of competition in public services, implementation of public policy, or the state of our prisons.
Author Biography
Author Biography
Julian Le Vay was Finance Director of HM Prison Service for five years, responsible for competitions to build and run prisons, then Director for Competition in the National Offender Management Service. Later he worked for two companies providing criminal justice services to Government. He is well placed to write about competition, having worked at different times on both sides of the fence.
Contents
Origins
Development
Part 1: Immigration: two sectors, no competition
Evolution: juvenile custody
Part 2: Electronic monitoring: the Fall of Giants
The quasi-market: characteristics and operation
Comparing public and private sector services
Comparing quality of service
Part 3: Four prisons in trouble
Costing the uncostable (1): pensions
Costing the uncostable (2) : PFI
Comparing cost
Impact on the public sector
Opposition on principle
Part four: Probation: how not to do it
Conclusions.
Contents
Origins
Development
Part 1: Immigration: two sectors, no competition
Evolution: juvenile custody
Part 2: Electronic monitoring: the Fall of Giants
The quasi-market: characteristics and operation
Comparing public and private sector services
Comparing quality of service
Part 3: Four prisons in trouble
Costing the uncostable (1): pensions
Costing the uncostable (2) : PFI
Comparing cost
Impact on the public sector
Opposition on principle
Part four: Probation: how not to do it
Conclusions.
--oo00oo--
I'm extremely grateful to Mike Guilfoyle for supplying the following review:-
Chapter 14 - Probation - how not to do it!
After demolishing many of the well known arguments advanced by Grayling and his acolytes on the flimsy grounds for TR at the outset of the chapter - he makes the following salient but far from exhaustive observations:
Proposed Reinvestment: long term 'invest to save' promises in complex systems are always problematic & if the PS is too prescriptive what was to stop Government lightening the controls - if the public sector is not good enough at its job, why give it the very highest risk cases?
Failure to cost programme: very unusually for such a major government change programme the MoJ has consistently refused to give estimates for costs & savings. The leaked risk register for the programme states up to 80% risk that expected savings will not be reduced - THERE CAN BE FEW EXAMPLES OF GOVERNMENT SO COMPREHENSIVELY IGNORING BASIC FINANCIAL DISCIPLINES OR FOR THAT MATTER OF PARLIAMENTARY COMMITTEES SO SUPINELY ACCEPTING SUCH SECRECY.
The organisational model for the new system is untried, over-complex and highly risky: the risk of confusion, argument and delay are obvious, the Criminal Justice System is not historically known for the fluency of information flow across institutional boundaries.
Uncertainty and risk about PbR: a recent cross-governmental study of PbR schemes concluded that the rationale of using PbR schemes was often lacking & with TR carried financial risks that were not always properly understood (NAO 2015)
Doubts about competence: The MoJ capacity to manage the new system is questionable - it is hardly credible that the degree of sophistication needed to manage relationships in a formidably complicated set of new relationships from a department which has just emerged from an audit of its contracted management function and is unable to cope adequately with its existing responsibilities can take on huge new and far more sophisticated contracts - the decision not to mandate qualifications & training, but to leave it to each CRC to decide on skills required & training levels risks competence & professional standards.
Dealing with failure: it is unclear how government would deal with supplier failure either of performance or outright financial failure or withdrawal other than by rapid market consolidation, which would lead to market domination by Sodexo or Interserve - None of the possible contingency plans proposed by the MoJ were very clear to us (Justice Select Committee).
Approach to risk: many involved in the programme comment on the way it is simply asserted that issues will be fixed and managed, and there is a wishing away of difficulties which is the reverse of reassuring - the TR programme was the ONLY one examined by the Major Projects Authority where no information whatsoever is given due to commercial confidentiality.
Comparison with competition in prisons: the book criticises as too slow, too conservative, the approach to contracting out prisons BUT COMPARED TO THE TR PROGRAMME THAT LOOKS LIKE WISDOM!
Conclusion: the TR changes lack compelling rationale or evidence, are uncosted, require extremely rapid implementation of new, highly complex organisational & relational models for all participants simultaneously, use payment mechanisms that are entirely untested & carry major risks of unforeseen consequences, rely on new & untested suppliers, require high levels of competence in contracting & contract management that the MoJ has recently been shown to lack and are being implemented at break neck speed for no reason - and there seems to be no recovery plan if TR goes badly wrong!
IT IS LIKE WATCHING PEOPLE DOING THEIR BEST TO ORGANISE THE PERFECT TRAIN CRASH!! (p 251)
I'm extremely grateful to Mike Guilfoyle for supplying the following review:-
Chapter 14 - Probation - how not to do it!
After demolishing many of the well known arguments advanced by Grayling and his acolytes on the flimsy grounds for TR at the outset of the chapter - he makes the following salient but far from exhaustive observations:
Proposed Reinvestment: long term 'invest to save' promises in complex systems are always problematic & if the PS is too prescriptive what was to stop Government lightening the controls - if the public sector is not good enough at its job, why give it the very highest risk cases?
Failure to cost programme: very unusually for such a major government change programme the MoJ has consistently refused to give estimates for costs & savings. The leaked risk register for the programme states up to 80% risk that expected savings will not be reduced - THERE CAN BE FEW EXAMPLES OF GOVERNMENT SO COMPREHENSIVELY IGNORING BASIC FINANCIAL DISCIPLINES OR FOR THAT MATTER OF PARLIAMENTARY COMMITTEES SO SUPINELY ACCEPTING SUCH SECRECY.
The organisational model for the new system is untried, over-complex and highly risky: the risk of confusion, argument and delay are obvious, the Criminal Justice System is not historically known for the fluency of information flow across institutional boundaries.
Uncertainty and risk about PbR: a recent cross-governmental study of PbR schemes concluded that the rationale of using PbR schemes was often lacking & with TR carried financial risks that were not always properly understood (NAO 2015)
Doubts about competence: The MoJ capacity to manage the new system is questionable - it is hardly credible that the degree of sophistication needed to manage relationships in a formidably complicated set of new relationships from a department which has just emerged from an audit of its contracted management function and is unable to cope adequately with its existing responsibilities can take on huge new and far more sophisticated contracts - the decision not to mandate qualifications & training, but to leave it to each CRC to decide on skills required & training levels risks competence & professional standards.
Dealing with failure: it is unclear how government would deal with supplier failure either of performance or outright financial failure or withdrawal other than by rapid market consolidation, which would lead to market domination by Sodexo or Interserve - None of the possible contingency plans proposed by the MoJ were very clear to us (Justice Select Committee).
Approach to risk: many involved in the programme comment on the way it is simply asserted that issues will be fixed and managed, and there is a wishing away of difficulties which is the reverse of reassuring - the TR programme was the ONLY one examined by the Major Projects Authority where no information whatsoever is given due to commercial confidentiality.
Comparison with competition in prisons: the book criticises as too slow, too conservative, the approach to contracting out prisons BUT COMPARED TO THE TR PROGRAMME THAT LOOKS LIKE WISDOM!
Conclusion: the TR changes lack compelling rationale or evidence, are uncosted, require extremely rapid implementation of new, highly complex organisational & relational models for all participants simultaneously, use payment mechanisms that are entirely untested & carry major risks of unforeseen consequences, rely on new & untested suppliers, require high levels of competence in contracting & contract management that the MoJ has recently been shown to lack and are being implemented at break neck speed for no reason - and there seems to be no recovery plan if TR goes badly wrong!
IT IS LIKE WATCHING PEOPLE DOING THEIR BEST TO ORGANISE THE PERFECT TRAIN CRASH!! (p 251)
And standing amidst that scenario as it unfolds is more like watching the perfect storm of several simultaneous crashes as the system, what's left of it after being so ignorantly butchered, creaks and snaps under the strain. But if something is broken purely for ideological purpose, logic and sense are irrelevant. The financial waste is there, the broken communication is there, the distorted agendas are there, the unrealistic, unachievable, meaningless targets are suffocating, and underneath all of this, gasping for breath, is any sense of the former profession of probation. But in my opinion the politicians and capitalists (interchangeable concepts) wanted their dirty hands all over the justice system to wring the life and breath out of it to further enable and secure their wider agenda.
ReplyDeleteOne is tempted to agree with Anon at 06:59's analysis.
DeletePLUS it is a train crash that was predicted before the train even left its factory.
PLUS can those interchangeable capitalists and politicians really be so stupid not to know that ultimately a nation's criminal justice system underpins the whole of a nation's social stability, which in a British, not just English & Welsh way might otherwise be described as something like "The Queen's Peace"?
there is interesting criticism of the Parliamentary Justice committee which on behalf of The House of Commons, has oversight of all the work of HMGov's Ministry of Justice - The committee chaired by Labour Leicester MP Keith Vaz.
Since Lord Janner's death more has been written about Vaz, noted for leading support of Janner since the early 1990s, could there be a connection?
Let me again express surprise and outrage, that the main stream media and wider parliament, seems to by and large, ignore the progress of "the train" (see my comments about and Twitter exchange recently with the BBC's Joshua Rozenberg's latest "explainer"). That is despite the fact that if the consequences of the train crash are sadly severe, the media and parliament will be the one's attempting instant analysis of the causes of the train crash, as happens whenever there is any significant societal break down.
It is the simple point that makes the case against this TRain crash so effectively.......IF public sector probation was so poor WHY was it the case that it was left to manage Very High and High ROSH offenders?
ReplyDeleteA PO ( NPS)
That seems precisely the question every member of parliament (Commons & Lords) should be asking of the secretary of state for justice.
DeleteIf probation in England and Wales was doing such a poor job, before 2014 why was it allowed to advise the courts and parole board and oversee the lives of those who have committed the most serious and harmful offences - is the secretary of state confident that the English and Welsh public are now better protected after the changes to the previous arrangements have been completed and the companies contracted to supervise the majority of criminals can set their own standards about the training their employees receive, with no control of those employees by the secretary of state?
I don't think it was ever a question of public probation not being good enough. All the evidence was that it was doing a good job.
DeleteAs we never tired of hearing, the argument that spearheaded TR was always the £46 pound-in-your-pocket - and no supervision. The high-risk stayed in public probation because the political risk was too high to entrust these cases to the private sector.
Yes - the evidence was there - Gold Standard as I recall. I also recall the maxim from my Trust-funded middle manager distance learning course with the University of Hicksville, Appalachia that one should "never mess with success". Sort of related too - having been involved in an actual train crash I struggle with the notion of a perfect one.
Deleteyou are missing the irony in the 8:43 post...that is indeed the question to ask. It is the reliance of Grayling on public sector probation (NPS)to quell any descent to TR that might have raised at the outset that undermines his whole argument for the destruction he created. £46 ? C'mon event posters here seem to have fallen for that argument....IT WAS A RED HERRING!!!
DeleteFrom an interview with Le Vay in FD magazine, 2001:
ReplyDeleteThe private sector lure of fat profits and high salaries doesn't do it for Le Vay, although he wouldn't say no to the right offer. He appreciates the idea that making money, instead of juggling the finances of a berated public service, has its attractions. "I can see that it would be easier to feel that you've got a result as the FD of a private sector business.
But that is not what motivates me, or my colleagues. We are trying to get the best result for the taxpayer. One of my goals is to get the value for money part of that really embedded in people's thinking in line management," he says.
"To some extent the relationship between four people determines funding: The Prime Minister, Home Secretary, Chancellor and Chief Secretary. To use Stalin's phrase the "Who's Whom?" - those who hold real power. But we also try over a period of time to get Treasury officials to understand the business issues. They are often several levels removed from prison operations," he says.
One way of distancing the business of running prisons from government is by encouraging private investment. Out of headline figures of £2bn spent last year by the service, about £700m were goods and services brought in from the private sector. The big contracts were £115m for escort services and £170m for prison operations. Le Vay is especially keen on Private Finance Initiative (PFI) schemes, where the service makes a payment to a private company that is partly in respect of the repayment of capital borrowing that the contractors undertake, and partly for operating costs.
Under PFI schemes, private sector companies do everything - design and construct the prison, finance the operation and also run it. This reduces the problem of government short-termism. "The government never plans capital investment more than three years ahead, and this is just about the lead-in time for building a new prison," says Le Vay. "We have something like £700m in backlog of maintenance and repairs - at very best we might just keep our heads above water, but we would never drain that sort of backlog. This is where resources and private sector involvement becomes an issue. There is a lack of freedom to use resources in the public sector, and there is not just a lack of focus, but a lack of sustained focus over time on key results. I feel very passionately about this subject."
I assume Julian Le Vey won't be adding FPInst after his name anytime in the near future. As we already knew from the start, Grayling and the MoJ implemented TR and sold off probation KNOWING it would fail. This book, however, is very damaging and I'd like to think it will prompt academics to write against TR, but probably not until they've climatised to the fact that Sodexo & Co have no intention to put bums on university course seats. The question id like to ask is when Grayling & Co's personal/collective gain from intentionally smashing up the probation service will be made public?, because it's obviously not reputation all and so must be financial. What's worse is that everyone went along with TR, including probation chief officers, and they're STILL going along with it! The NPS probation directors Sarah Payne, Sara Robinson et al, continue to be silent MoJ lapdogs that are killing off what's left in the NPS, and the CRC probation directors John Wiseman et al are doing the same to the CRC's on the behalf of their privateer bosses. The ball is in Michael Gove's court now.
ReplyDeleteI suspect Le Vay is long gone, has probably a couple of very tidy pensions (incl his civil service jackpot) & is just fillng his retirement years musing on his past emloyment. Its unlikely he'll be upsetting any applecarts. But the observations are helpful.
DeleteAs the train crash unfolds, maybe some other disgruntled or dismayed MoJ/NOMS employee might now pluck up the courage to open Grayling's box of dirty little TR secrets? And it would make my 2016 to see a class action taken against Grayling, Wright, Brennan, Romeo, Spurr & the whole pack of TR acolytes who sold us all out - and who continue to sit on their hands & say nothing whilst the profiteers tear everything to shreds. It would be poetic justice to see them have to cash in and share out their ill-gotten gains by way of compensation to those who lost their health, their careers & more as a direct consequence of the TR myth.
That might put the brakes on wreckless privatisation by greedy, numbskull politicians & their eager-to-please minions.
The real TRagedy of this whole mess is the impact on those who are required to use probation services it's very sad to witness the fallout
ReplyDeleteWere the people who use our services involved in any way in the decision making processes? Will any academic research focus on consumer perspectives? Notice that Le Vay doesn't have a section referring to 'service user' involvement? How does one achieve a holistic and balanced evaluation of the impact of TR on all parties concerned?
ReplyDelete'Service user' is an inaccurate term. It is not voluntary so I doubt any on probation consider it a service. It is more accurate to think of the Courts, prisons, victims and the public/community as the consumer and that's who I'd like to hear from. Given the nature of the book it's silly to think offenders would/should have been consulted. In any case if the impact of TR is to be reduced contact, lacking enforcement and losing people in the system then I doubt many of the supervised will be concerned. I'm sure, however, some may be concerned probation officers no longer have time, resource or authority to support them.
DeleteThe reason I opened my post referring to 'people who use our service's and placed the term su's in quotation marks was to highlight the dilemma over terminology. To be pedantic too, I would refer to courts etc as 'stakeholders' rather than consumers and remember that we are all 'members of the public and community's whether or not labelled as'offenders'.
DeleteIt's a shame that when one makes an observation on this blog that other readers are more concerned with semantics than the general theme of the message? Having worked in Probation for over 20 years, this tendency to 'nitpick' and waste energy over trivia is a trait I've observed many times amongst colleagues. Better to focus on a multi-dimensional, inclusive approach???
The points of my reply remain. And it's a shame when people in probation, like you, can't have a conversation without stating how long they've worked in probation!
DeleteI see nothing wrong is posters saying how long they have worked in probation. The ones who have been in, say, one or two years seem to cause some less upset then those who have been in twenty-plus years. According to 23.16 the longer you have been in the greater the tendency to nitpick. But this is only the observation of 23.16 and, to my knowledge, it has not been proven. I think nitpicking is not age specific, as I have observed it across all cohorts.
ReplyDeleteIf you're referring to TR, cuts, redundancies, etc the it is wrong to say there's less impact on those "one or two years in". Those "20 years in" should stop thinking they have a monopoly on "being upset" too, as I am observing.
Delete10.52. Talk about tilting at windmills: read the posts! No one is saying anything about cuts, etc... or comparing 2 with 20 years.
ReplyDeleteAnd so they shouldn't!
Delete