National Chairman

February 2014 | 06.02.2014

Privatisation of HMPs Hatfield, Lindholme and Moorland cancelled

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Following the decision to cancel the privatisation of these prisons, Christopher Grayling, the Secretary of State for Justice said: "I have therefore decided that the competition for these prisons will cease and that all three prisons will be managed by HM Prison Service."


Members may recall that the award of the contract to Serco to manage these prisons had been delayed in July 2013, in order to investigate overcharging and the mismanagement of contracts within the public sector. With the above announcement the many months of uncertainty endured by our members has finally ended.

In the written Ministerial Statement the Secretary of State for Justice pointed to two reasons for the cancellation of this contract. He pointed to the understandable impact of the on-going delay on the operational needs of the three prisons. He then went on to say that the three prisons would now be a part of the new public sector benchmark: “This approach provides a workable solution and in the circumstances is the best possible option both for the prisons involved and the public.”

We all recognise that benchmarking is a difficult and unrelenting process. In my opinion, without benchmarking the Secretary State for Justice would have re-tendered the contract for HMP Hatfield, Lindholme and Moorland. I need not remind you that the public sector has not had the best record to date in its bids for competed prisons.

The National Executive takes its lead from the membership through Annual Conference. Annual Conference has instructed the Executive to engage with the employer to achieve the best possible outcome for the membership. I hope you would agree that to retain HMP Hatfield, Lindholme and Moorland within the public sector is the best possible outcome for the membership.

The Executive will now work with the three committees to support them as they prepare to work within the strictures of the public sector benchmark but also to adapt to Fair and Sustainable.

For the avoidance of doubt; the POA will continue to campaign to secure the return to the public sector of HMP Birmingham and HMP Northumberland.

Has the POA defeated privatisation?

The loss of the contract to run the three Yorkshire prisons, with a value of between £375 and £450million, is a significant setback for Serco. In November, Serco Chairman, Alastair Lyons, told MPs at the Public Accounts Committee that their operation of the tagging contract had been “ethically wrong”.

Again, with regard to the tagging contract, G4S Chief Executive, Ashley Almanza, apologised to the taxpayer for their inability to distinguish between “right and wrong” in overcharging for tagging criminals. The Chair of the Public Accounts Committee, MP Margret Hodge, commented: “If you hadn’t been caught out you would have carried on charging until the year 3,000”.

Serco appears to have reached a settlement to repay circa £60million to the taxpayer with its total costs for the tagging scandal now almost £105million. Meanwhile G4S has been unable to agree an appropriate repayment with the Government. The Coalition Government, following legal advice, has referred its concerns with regard to G4S to the Serious Fraud Office.

Has the privatisation of criminal justice has been defeated?

Against all expectations and alongside a debilitating recession, the POA has succeeded in persuading the Coalition Government to retain core custodial prison work within the public sector.

This is a significant and hard-won achievement against the background of the privatisation of the probation service and the Royal Mail. Whether we like it or not; Fair and Sustainable and the Benchmark process prevented the wholesale privatisation of the prison service in 2012 and has positioned the POA to take advantage of a series of setbacks resulting from the over-reliance on the private sector.

However, although the performance of Serco and G4S remains under intense scrutiny, anyone who claims that the private sector has been defeated is being somewhat optimistic as we enter 2014. Yes, the commercial reputation of Serco has been damaged but they have been astute enough to agree compensation with the Government. This sensible and pragmatic approach is based on the economic reality that Serco is dependent on contracts sourced from the Government amounting to some £1.2billion.

Privatisation can no longer be seen as efficient or cost effective

Despite the breakdown in trust between these two companies and the Coalition Government, politicians continue to insist on the need for a reduced public sector and an increased private sector. We would be naïve to believe that the battle to maintain and expand public sector employment is at an end. We have of course learnt from bitter experience to avoid over-reliance on promises from any incoming Labour Government.

Again, to date other private sector companies have yet to suffer the reputational damage to the same extent as G4S and Serco. These companies will without doubt see the travails of Serco and G4S as an opportunity to increase business and by association their profit margins. Privatisation can no longer be seen as efficient or cost effective but it remains an ideology favoured by politicians.

The POA must remain vigilant and determined to follow Conference policy to ensure that the work we do on behalf of society is at the behest of the public not as a profit and loss consideration within a share portfolio. To that end I take this opportunity to remind you of POA Circular 197/2013 and the forthcoming rally and lobby of Parliament on 19 March 2014.
 

PJ McParlin
National Chairman