What the Public Accounts Committee should ask about Transforming Rehabilitation

This week feels like the denouement of the Government’s reform of the Probation system in England and Wales.  This morning Chris Grayling addressed Policy Exchange on the wider question of Privatising Justice. This afternoon the Lords considered the Offender Rehabilitation Bill which needs to enter into force before short term prisoners can be supervised on release. Tomorrow the Public Accounts Committee will question Ministry of Justice officials about a rather weak NAO landscape review of the Probation service.  The three events give us an idea about whether the Government will change course themselves or might be pressured to do so for political or administrative reasons. 

Justice Secretary Chris Grayling certainly showed no sign of any "policy exchange". He seemed discomforted maybe twice, once when he revealed he did not know the extent of a private company’s liability if one of their prisons was burned to the ground – he’d have to check with his contracts people.  He also saw no paradox in the fact of private companies proving successful in the rehabilitation world if they shrink rather than grow their market.  He thought they would be in demand overseas- a successful work programme provider apparently now plies its trade with the government of Saudi Arabia.  Otherwise he assured his audience that privatisation was not a dogma; he had after all scaled back on the proposed outsourcing of prisons. Bringing in new providers was not about profits to shareholders but about innovation and private sector management skills.

In the same breath, he told us that nothing much would change. The rehabilitation revolution was, after all, an evolution. Grayling has no truck with those who say payment by results is untried and untested- it’s no more than performance related pay. As for private providers, he could not say as much as he’d like about G4S and SERCO because they might yet be prosecuted. But no private company would henceforth be able to play fast and loose with government contracts which had been subject to a root and branch review.

Grayling assured his audience that failures in the management of contracts go back many years and were in fact picked up by his new broom. He was not asked why tagging company Buddi found their relationship with his department so “unproductive and frustrating” that they withdrew from their contract nor had what lessons been learned from the Ministry’s failures in respect of the Court Interpreter contracting during the coalition government.

Unproductive and frustrating might well describe the relationship between parliament and the ministry during the last twelve months, with requests for more information about costs and risks repeatedly denied to legislators. The House of Lords seems to have fired its last shot in the battle for more transparency. With this afternoon’s narrow defeat of their attempt to subject the probation changes to greater parliamentary scrutiny, responsibility for extracting more details about the plans moves to Mrs Hodge and her colleagues on the Public Accounts Committee.

There are three basic questions areas that the PAC should probe if they are to fulfil their obligation to test the economy, effectiveness and efficiency of the changes.

On economy the simple question is whether the government plans are affordable. Grayling may say that contracts will be let on quality not price but in order to supervise 50,000 more offenders with the same resources, something has to give. His own strategy says that “from previous competitions for Offender Management services, we have seen evidence of the potential to generate efficiency savings, which allows us to invest in support for short sentenced offenders and those who need it most. The private sector is driving savings within the CJS.” The permanent secretary needs to tell the PAC for example whether the  estimated £25m saving on the Community Payback bill in London after SERCO took over in October 2012 is still valid- presumably not since the contract is being terminated early. The NAO should also press on the costs and performance of HMP Oakwood – allegedly operating at half the annual cost per prisoner place of comparable prisons.  The MoJ see this is an example of how the private sector can cut costs. But performance so far has been very poor. Is this a genuine or responsible benchmark for costings in criminal justice and if not what is?

On effectiveness, the key questions relate to the manageability of the new arrangements. How and with what resources, are the Ministry going to ensure that contracts are delivered properly? And how will the Department make sure that that the crucial operational interfaces are properly managed between the public Probation service on the one hand and the Rehabilitation Companies on the other and between the Companies and the range of other relevant agencies. The NAO last week published a separate report on criminal justice which found that governance and management arrangements are complex and that delivery partners “need to be working well together at national and local level, focusing on how best to achieve the overall objectives of the criminal justice system, rather than optimising the performance of their own organisations.” In probation, arrangements are about to get a whole lot more complex and the PAC should want to know how they will work.

The third focus of the PAC is efficiency. The NAO criminal justice report found that “changes to one part of the system can have unexpected consequences for others”.  The PAC should ask about unintended consequences of the Transforming Rehabilitation changes. Grayling told Policy Exchange that if he were running a CRC he’d want to set up a housing operation. He’s right of course that prisoners need a place to live but do we really want to develop offender specific services that could inadvertently reinforce rather than diminish their social exclusion. Is there not a risk that mainstream services will see an opportunity to wash their hands of offenders safe in the knowledge that their needs are to be looked after by these new private agencies? 

On the sharing of good practice, the PAC will want to know how the Ministry will develop a contracting regime that encourages encourage providers to share what works when there is a commercial advantage not to do so.

When Grayling first announced his changes, he was reported to have said that you don’t pilot a revolution.   By contrast, his junior minister told the Sunday Mirror at the weekend that the government has  always been clear that the changes “will be rolled out in a controlled way, with robust testing at every stage”.  Although they are interrogating officials rather than ministers, the PAC has the right to press them hard about the results from of this alleged testing so far  and the plans for the future . In fact they have the duty to do so.