Problems with probation contracts will cost £467m

Will Green is news editor of Supply Management
3 May 2019

The UK Ministry of Justice (MoJ) created an “underfunded and fragile probation market” when it outsourced parts of the service, according to MPs.

In a report the Public Accounts Committee (PAC) said the MoJ “failed to realise that a payment by results model was not appropriate for probation” and attempts to stabilise contracts with Community Rehabilitation Companies (CRCs) will cost taxpayers an additional £467m.

The PAC said reforms to probation services, introduced in 2014, were conducted at “breakneck speed” and they created an “unacceptable level of risk”. The reforms involved the creation of 21 CRCs to manage low and medium risk offenders, while the public sector National Procurement System was established for those posing a higher risk.

But as highlighted previously by the National Audit Office, income for the CRCs has dropped due to fewer community sentences being issued by the courts, while reoffences per offender have increased. Contracts originally designed to run until 2021-2 will end early in 2020.

The report said Working Links and the three CRCs it owned went into liquidation in February 2019, with these services transferred to Kent, Surrey and Sussex CRC. The NPS is “dealing with intolerable workloads”. Interserve, which went into administration in March, owned five CRCs and it was “unclear what impact this will have on the future of these contracts”.

The PAC said voluntary sector organisations were “frozen out of bidding” because of onerous parent company guarantees, resulting in the “loss of better quality specialist services that had been provided at no cost to the taxpayer”.

PAC chair Meg Hillier said: “Despite warnings from this committee and the National Audit Office over the past three years, the Ministry of Justice has failed to bring about the promised revolution in rehabilitation.

“Rather than deliver the savings hoped for at the start of the programme, the ministry’s attempts to address the failures in the reforms have cost the taxpayer an additional £467 million while failing to achieve the anticipated improvements in reoffending behaviour.

“Over-optimistic initial forecasts left the Ministry of Justice fighting fires of their own making since the programme’s inception.

 “The Cabinet Office, HM Treasury and the Major Projects Review Group share responsibility for these failures by providing insufficient challenge at the early stages of the project and allowing it to proceed too quickly with insufficient safeguards or testing.”

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