Government announces ‘preferred bidders’ for probation contracts: service in chaos as privatisation goes ahead

The government has announced a list of the 21 ‘preferred bidders’ to run probation services as the new ‘Community Rehabilitation Companies’ or CRCs, replacing the former publicly-run Probation Trusts. CRCs will be responsible for low to medium risk offenders, comprising 70% of probation services, while high risk offenders will remain the responsibility of the much-reduced publicly run probation service. Despite repeated warnings from a range of sources, mass dissatisfaction from the workforce and mounting evidence that the reforms are unsafe, untested and unnecessary, Justice Secretary Chris Grayling is rushing ahead with government plans to privatise probation services, under the Transforming Rehabilitation programme.

As probation trade union Napo has made clear, the fact that so few organisations have actually won contracts suggests that the competition for contracts has been flawed with little or no real interest from providers in taking these contracts on. While there are joint ventures with voluntary sector organisations, the usual suspects of large private sector companies Sodexo and Interserve, for example, are prominent in the list of preferred bidders.

In contrast to the announcement by the Ministry of Justice (MoJ) – ‘Voluntary sector at forefront of new fight against reoffending‘, large private companies, not staff mutuals or charities typify the list of preferred bidders. Of the 21 contract areas, 11 are to be led by large private companies Sodexo and Interserve, in partnership with charities and social enterprises. Of the remaining contracts, private companies feature quite prominently – Ingeus UK in a partnership with two charities is the preferred bidder for two contract areas, while private company Seetec (without a partnership), is the preferred bidder for the Kent, Surrey and Sussex contract area.

This means that Sodexo and Interserve will be put in charge of over 50% of the contract areas, and the supervision of 200,000 low to medium risk offenders in England and Wales, while private companies are leading or prominent in 90% of the contracts to be awarded. Three joint ventures are preferred bidders for seven contract areas, all of which but one have a private company as a prominent partner. The remaining contract area – Durham Tees Valley, has as a preferred bidder a Community Interest Company – Achieving Real Change in Communities, the only preferred bidder without a private sector partner.

As the Public Accounts Committee has noted in their thorough investigation, the government ‘must get its house is order’, in regard to public service outsourcing, and condemned the concentration of provision into the hands of a small number of contractors. Asylum accommodation, the Work Programme and private prisons are particular areas whereby provision is by a few large contractors, in contrast to government rhetoric regarding the role of voluntary organisations. Based on the list of preferred bidders and the process so far, there are very serious concerns that probation could end up in the same situation.

Concerns raised
While the nature and probable outcomes of the process raises serious questions about the risk to public safety in the rush to adopt untried and untested reforms, the way in which the process is being conducted by the government smacks of a serious lack of transparency and an intention to avoid public scrutiny. The list of preferred bidders was presented to parliament in a written letter by Chris Grayling MP, rather than being put to parliament for questions.

Napo is launching a legal challenge of the privatisation process. The MoJ faces a deadline for disclosure of information for the official ‘risk register’, which assesses the public safety implications of the privatisation under the possibility of a High Court injunction.

Probation staff of all grades have raised serious concerns with the reforms about public safety, in relation to offenders not being supervised properly, continuing IT failures, staff shortages and ever increasing workloads. As the Public Accounts Committee made clear in their damning report, the Ministry of Justice (MoJ) has an ‘extremely poor track record in contracting out’, which does not bode well for the future.

The two probation pilots that the government has undertaken in recent years were ended early amidst criticism as to the disappointing nature of the interim findings, as well as the flaws inherent in their design. Napo consistently argued that any comparison between them and national probation services are completely wrong to make, and challenged the government on their rationale.

Together, Sodexo and Interserve are due to run over half of probation services in England and Wales. Two companies who were on the list of bidders previously, G4S and Serco, withdrew their bids following an investigation by the Serious Fraud Office, which found that they were significantly overcharging the taxpayer for the provision of electronic tagging for offenders. G4S and Serco had to repay the government over £180m.

To top off the concerns, as we have blogged previously, the contracts will include so-called ‘poison pill’ clauses, preventing future governments from undoing the contracts without taxpayers paying £3-400m to the contractor, as bidders are guaranteed profits over the 10 year lifespan of the contracts.

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For more information, see Napo’s news piece, ‘Chaos reigns as CRC bidders are announced‘ and the Guardian article Travis, A. ‘Two companies to run more than half of privatised probation services‘, The Guardian, 29 October, 2014.

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