Why private prisons don’t work

When the Ministry of Justice released figures about prison performance yesterday there was one finding which did not surprise anyone: private prisons are very often the worst performers.

Oakwood prison in the West Midlands and Thameside in south London, both opened in 2012, were both rated 'of concern', the second worst rating available in the National Offender Management Service (Noms) categories. It's actually a slight improvement. In 2012/13 they were in the lowest category – "of serious concern".

Private prisons are consistently over-represented in the lower categories. They are more expensive than public prisons and less effective.

Private prisons have held a higher percentage of their prisoners in overcrowded accommodation than their public equivalents every year for the last 15 years. In 2012/13, the private average was 29.3%, compared to 21.8% in the public sector. Forest Bank, Birmingham, Doncaster and Altcourse were particularly bad, with the latter holding 67% in overcrowded accommodation.

The average gross salary for a private sector prison officer is 23% less than their public sector equivalent.

A report into Oakwood by the chief inspector of prisons this year found the staff were so inexperienced they were unable to challenge inmates and had basically entered into a system of collusion with them. "On more than one occasion we were told by prisoners that you can get drugs here but not soap," he said.

This, however, is justice secretary Chris Grayling's favourite prison.

"I am very optimistic for Oakwood," he told the Express & Star. "It is a first-class facility. It is the most impressive set of facilities I have seen on a prison estate."
G4S, which runs the £150 million jail alongside HMP Birmingham, has been fined £135,552 for failing to reach targets on drug testing, prisoner employment and prisoner complaints.

It's not as if ministers haven't been warned. The consistent failure of private prisons has been in evidence since 2008, when the Noms performance categories were introduced.

The evidence from overseas is consistent with the UK experience.

A 2010 Arizona’s Office of the Auditor General report found minimum security prisoners cost 33 cents (20p) a day more per prisoner than public ones. Medium security prisoners cost $7.76 (£4.60) more.

As ever with privatisation, the system throws up perverse incentives.

In the US, 'lockup quotas' guarantee private firms that their prisons will be filled at the rate of 90% or higher. Three for-profit prison contracts in Arizona guarantee 100% occupancy.

Some 65% of private prison contracts contain the quota. This grotesque contractual obligation precludes improvement in society or communities' abilities to save money by pursuing successful policies. No matter how much you reduce crime, you'll still be shelling out to the private sector.

Britain is a world leader in private prisons. With 16% of the prisoner population behind private bars, we have more than anywhere else in Europe and more even than the US, where just 8.7% of inmates are in private facilities.

But we shed cash on this experiment just as the Americans do. Market testing alone cost £3.5 million between July 2011 and September 2012. There are rumours that even where the private bid for Birmingham prison cost more than the prison service bid, it was still handed to G4S.

Even the savings made on public sector pensions provide only a false economy. As private firms fail to contribute to their staff's pensions, they often end up relying on the state. Either way, the taxpayer always gets the bill. Heads they win, tails you lose.

Even though the ratio of staff to prisoner is usually lower in private prisons, overall each prison place costs more. We think Serco, Sodexo and G4S aim for a £4 million profit from the prisons, but of course the details of the deals are kept under wraps by commercial confidentiality rules.

The continued experimentation in private prisons is testament to the faith of free-market advocates. No evidence, no disaster, restrains them. The truth is free market incentives do not work in this area. The drive for profit does not encourage experimentation. It encourages the cutting of costs, the stuffing of inmates into overcrowded jails, with a reduced and under-paid staff of inexperienced young people, and the disorder and lack of rehabilitation that ensues.

The data is clear, but it means little to ministers, who remain blinded by baseless dreams of free market efficiency.