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Payment-by-results could prevent small charities' involvement in prison service, says PRT director

Finance | Niki May Young | 19 Jul 2011

The director of the Prison Reform Trust has warned that smaller charities could be pushed out of service delivery in the justice system by the introduction of payment-by-result contracts.

Juliet Lyon spoke with civilsociety.co.uk following her public warning against putting the management of prisons out to competition. This followed the government’s announcement last week that it would close two prisons and put a further nine out to competitive tender.

“No other government in the world has attempted to contract out so many of its existing prisons, making this an essentially untried and risky strategy,” said Lyon in her statement.

PRT advocates a reduction in prison numbers. Lyon explained that “the only way to achieve a moderate justice system in which the punishment fits the crime is to reduce our over-reliance on imprisonment”.

Profit motive could increase prison numbers

But she fears the element of competition would lead to an increase in numbers: “With the profit motive expanding across the custodial estate, vested interests could create pressure to grow the market and inflate prison numbers,” she said.

Speaking to civilsociety.co.uk Lyon said that charities running prison services would relieve the profit motive, but said that the payment-by-results programme “could be problematic for anyone other than the very large charities”.
 
“The Prison Reform Trust welcomes the involvement of the voluntary sector in the justice system from its work on prevention, through to engagement with people in custody and on release,” she said.

But while “larger charities and multi-national companies have the scope to scale-up their operations”, “smaller charities offering useful local connections or specialist expertise may be the ones who feel most the chill wind of cutbacks and the new climate of payment-by-results”, she said.

Lyon’s warning came just days after the Ministry of Justice published its guidelines on competitive tendering for the prison service which outline a number of recommendations for voluntary sector involvement.

“We recognise the value in making the best use of the innovation, capacity and diversity of voluntary and community sector (VCS)and small and medium-sized enterprises.

"We will continue to work to reduce the barriers faced by these organisations to participation in the offender services market. For example, the refreshed Compact on relations between government and the VCS also includes undertakings to help level the playing field,” the MoJ's Competition Strategy for Offender Services promises.

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