Public 'could buy shares in prisons'

Friday, 1 December 2006 12:00 AM

Home secretary John Reid is considering allowing members of the public to invest in new prisons, as he struggles to deal with a bursting jail population.

The scheme would see investors buy shares of the new real estate investment trusts (Reits), which would build prisons and then rent them out to the Home Office.

Mr Reid announced this summer that he would be building 8,000 new jail places to deal with an overcrowding crisis which has seen police cells used to house prisoners.

Earlier this week, new figures showed the prison population had topped 80,000 in England and Wales, for the first time ever.

There were 79,908 people held in jails and a further 152 in police stations under emergency plans, and 85 of the 139 jails are now officially overcrowded.

Mr Reid said building new prison places would help ease the pressure but the Home Office budget has been frozen for the next three years and resources are scarce.

According to reports in the latest edition of Building magazine, investors would be encouraged to put their money into new prisons and would benefit both from the regular rents from the Home Office and from the increase in property prices.

The Home Office stressed there had been no official evaluation of this kind of scheme but said it was open to new ideas on how to construct the new prison places.

However, Harry Fletcher, assistant general secretary of probation officers' union Napo, condemned the move as "desperate".

"The Treasury refused to finance new jails by conventional means so Mr Reid is having to go to this length to find a way of getting the new spaces," he said.

Under this scheme shareholders would have a vested interest in seeing that the jails were full as the more rent that would come in, the higher the dividends."

Shadow home secretary David Davis said this situation had come about because of the government's "failure" to address the lack of capacity and the Treasury's "miserly approach" towards the Home Office.

"As a result we see John Reid reduced to begging the public to stump up even more of their cash to pay to deal with Labour's failure," he said.

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• prison officers
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• prison overcrowding
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• prisons
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• private prisons
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• public services