Prison Privatisation Report
International
No. 48, June/July 2002
Published by the Public
Services International Research Unit (PSIRU),
www.psiru.org/justice
This publication is
supported by a grant from the Foundation Open Society Institute.
IN
THIS ISSUE
ICPA CONFERENCE: INTERNATIONAL PLATFORM FOR INDUSTRY
Inspector critical of court
security contract
“The state authorities, apparently somewhat taken
aback by the bottom line costs, and AIMS, struggling to cover its shrinking
commercial base in
That was one of the comments
made by Richard Harding, the inspector of custodial services for Western
Australia, in his recent report on the contracted out prisoner escort service
for the state’s metropolitan court custody centres.
Corrections Corporation of
Describing this component of
the contract as the “most onerous” Harding raised concerns about the department
of justice’s handling of the contract - describing its oversight as
“superficial” - as well as the company’s implementation of it. To their credit,
both parties started to address some issues before a draft of the inspector’s
report had been made available. He also noted that “an assessment of the
suitability for purpose of all court custody centres needs to be completed by
the department. To varying degrees, all of the ... centres have issues that
require immediate attention to enable the contractor to properly fulfil the
terms of the contract.”
Amongst the inspector’s
findings were:
n a number of serious staffing issues including
a shortage of staff on busy court days at many locations, the absence of
ongoing staff training and lack of interaction and, therefore, control from
AIMS head office;
n at one site, Armadale,
the contractor had allocated 123 working hours per week but the supervisor kept
the allocation down to 110. “For actual hours worked to fall so far beneath
that allocated calls into question the contractor’s proper fulfilment of its
service obligations, as well as the capacity of the parties to negotiate
realistic contract variations.”
n “staff have developed
the confidence to cope in most circumstances, but this seems to have been as
much by good fortune as by design of the contractor...”
n at the Central Law Courts, however, “the
frequency of the use of force and restraints indicate that the staff see their
job as one of managing conflict and risk, rather than the delivery of a court
custody service.”
n AIMS management have “endeavoured to operate
its court custody management business from a head office in
n the absence of a formal complaints mechanism
for persons in custody was “a real matter for concern” and they had not been
encouraged to raise grievances with the contractor or the department of
justice. The inspector noted that “current contract arrangements are biased in
favour of authors of incident reports. This imbalance is neither in the
interests of the contractor nor the persons in custody and should not be
tolerated by the department.”
n the contract requires the contractor to
provide a transport service to the courts as required. “Currently, it is not
providing the service it has contracted to deliver.”
n “There is considerable disparity in the
service standards that have been achieved at each of the seven metropolitan
court custody centres, ranging from excellent to barely coping.”
The inspector made six major
recommendations for improvements. He also stated that “the most cogent need ...
is for a resolution of the commercial squabbles, so that in the public interest
a reasonably promising start may be consolidated.”
Report of an Announced Inspection of Metropolitan
Court Custody Centres - November 2001, Office of the Inspector of Custodial
Services, Perth, Western Australia, April 2002. www.custodialinspector.wa.gov.au
The
Meanwhile, the Australian
Capital Territory’s (ACT) plans for a new prison of its own are on hold as no
funding has been allocated (see PPRI # 41, 38, 35, 30 & 25). ACT
currently contracts with the state of
Frost report in Victoria
There have been dramatic improvements at the Dame
Phyllis Frost Centre since the prison, formerly known as the Metropolitan
Women’s Correctional Centre (MWCC), was taken over by the government of
Victoria (see PPRI #42, 38, 37, 35, etc)). According to the corrections
minister Andre Haermeyer, since October 2002 drug use
and the recorded rates of self harm and assaults have decreased. “Positive random
drug test results had been running at 9.2 per cent for the period July 1999 to
June 2000. The rate recorded for July 2001 to May 2002 has decreased four per
cent. Improvements in performance ... have vindicated the government’s decision
to take back public management of the prison,” he said in a media release
n A kilogram of high
grade cannabis worth some A$17,000 was found by prison officers at a property
next to the Australasian Correctional Management (ACM) - run Fulham
Correctional Centre recently. The property is used by prisoners engaged in
outdoor work. Two weeks before, the state corrections commissioner ordered an
investigation after a prisoner sentenced for drug dealing was able to meet with
a so-called underworld associate while on a supervised 12 hour community access
visit.
Acacia’s bad apple
A prison industrial officer employed by AIMS
Corporation at the company-run Acacia prison in
Private pay and conditions
A work value review process for staff at ACM-run
Fulham Correctional Centre in
Mike Rann, the premier of
The previous contracts for the operation of Borallon Correctional Centre - run by Corrections
Corporation of Australia (as was) from 1989 to 2000 - “were basic and did not
clearly define responsibilities and risk ... made no or limited reference to
best practice in the delivering of services” according to Helen Ringrose, director general of Queensland department of
corrective services (see PPRI # 46 & 38-36).
Speaking at a conference
earlier this year she also said that the new contract with Management &
Training Corporation (MTC) which commenced in January 2001 is designed “to
create an environment where the provider will strive to be innovative, to be a
lead agent for change...” and “performance is linked to a bonus.... a
fundamental shift away from penalty clauses.” However, “as this is the first
year of operation for Borallon [under MTC] it has
been too early to award an innovation bonus. The centre is demonstrating
innovation in programme delivery...”
Striving Towards Financial Best Practice: Correctional
Facilities Management, Helen Ringrose, Queensland
Department of Corrective Services, paper presented at International Quality and
Productivity Centre, Cost Effective Correctional Facilities Management, 6-7
March 2002, Sydney.
ILANUD takes issue
Participants of the ‘IV International Course on
Effective Assistance Measures to Facilitate the Reinsertion into Society of
Persons Deprived of Liberty’ meeting in
* noting with great concern the frequent inefficiency
of the rules that protect [these] fundamental rights of persons deprived of
liberty, with the weak role of judges, attorney generals and defending lawyers
that have the obligation to control the constitutionality of the laws and
penitentiary rules, and the practice of the penitentiary administration;
* concerned about the fact that, in such situations,
there are private enterprises proposals to control the execution of the
sentence, being this the final phase of the criminal procedure, which is an unquestionable
duty of the State, [we] proclaim that sentence execution is an exclusive and
obligatory duty of the democratic state of law.
The course was organised by
the United Nations Latin American Institute for Crime Prevention and Treatment
of Offenders (ILANUD), with the cooperation of the Japanese Agency for
International Cooperation (JICA), and the United Nations Asia and Far East
Institute (UNAFEI). The course was
attended by penitentiary experts, judges and attorney generals from
n A public meeting on prison
privatisation organised by ILANUD and attended by the vice minister of justice
was held in the supreme court auditorium on 18 July.
The meeting unanimously called for the government to reject the former
administration’s attempt to privatise a new prison (see PPRI # 47, 46 & 42).
Looking at options
“With the growing need for new
prison beds as one component in the battle against crime, the primary question
becomes ‘what methods of financing are the most feasible to foster improvement
of the prison system?’ say Stephen Carter and Sofia Tata
of Carter Goble Associates.
Writing in the summer 2002
issue of Prison Review International they describe how “a role for the private sector is
being considered well beyond the managing of prison workshops. Through a study
sponsored by the Comision de Promocion
de la Inversion Privada (COPRI), alternative methods
of design, construction, management and financing of new prisons are being
evaluated.” The need for 13,000 new prison beds by 2015 has been identified.
Requests for tenders are expected to be issued later this year.
Escort contractors fined
Prisoner escort contractors in
In answer to a parliamentary
question, prisons minister Hilary Benn said: “Contractors, prisons and the
police are all aware of the late deliveries to court and the potential cost to
public funds. Each contract is monitored by a team of prison service staff
against a series of performance measures. These cover a range of issues
including delivery to court. Failures against the performance measures result
in the application of penalty points and if these exceed a prescribed total in
any single year they result in the application of financial remedy,” (Hansard, 1 July 2002).
He added: “The £500,000 in
financial remedies imposed upon Securicor related to
performance shortfalls during the years 1999-2000 and 2000-2001, when shortages
of staff contributed to a number of failures to meet the requirements of the
contract, including the timely delivery of prisoners to court. The situation
was the subject of a discussion between home office ministers and members of Securicor’s senior management, as a result of which an
improvement plan was produced by the company. This has now been implemented and
there are indications
that it is beginning to achieve positive results”.
A survey carried out by the
Criminal Bar Association earlier in the year showed that there were widespread
problems with privately run escort services. Lord Justice Judge, the senior
presiding judge of
Securicor operates the escort service
in
Securicor preferred for child jail
contract
Securicor STC Ltd, a subsidiary of Securicor Custodial Services, has been chosen as preferred bidder
for a new 80 bed secure training centre at
Announcing the decision on
Securicor runs one prison and operates
prisoner escort and electronic monitoring services in
nRainsbrook secure training centre,
operated by Group 4 subsidiary Rebound, has expanded from 40 to 76 beds.
Medway, also run by Rebound, is expanding from 40 to 72 beds and the 32 bed
unit is due to open in November 2002. The Youth Justice Board is also looking
for a site in
The Scottish Parliament’s
Justice 1 Committee has dismissed the Executive’s proposals for three private
prisons (see PPRI # 47, 45-43, 40, 37& 36). Christine Grahame MSP, the convenor of the Committee said: “We
recognise that, for many, the question of private versus public provision of
prisons is an ethical matter. Our task, however, has been to consider the
prison estates review in its own terms, looking simply at the cost and quality
of provision. Our investigation found that the Executive’s review was based on
inadequate financial and performance information, making accurate comparisons
between private and public provision almost impossible. We believe they need to
look again at the evidence before making any significant changes to the way in
which prisons are run in
The Committee found that there
had been a “paucity of research” into the option of semi-private prisons and
called on the Executive to commission further research. As for
The Committee also regretted
that the review “was undertaken in a vacuum and not in the context of wider penal
reform. The committee urges the Executive to implement improved penal policies
by providing adequate resources and leadership to schemes aimed at reducing
offending and reoffending where appropriate and to
establish a full range of effective community disposals across the country. The
Committee would need more evidence before being convinced of the need for three
new prisons.”
The issue of the Scottish
Prison Service’s (SPS) monopoly “over decades” was also discussed. The
Committee called into question the quality of operational leadership and
management of public sector prisons and whether there is an appropriate
accountability mechanism.” The Committee called for the Executive “to inform it
[the Committee] of what steps the management of the SPS is taking to improve
efficiency.”
The Scottish Parliament,
Justice 1 Committee, 6th Report, 2002, Report on the Prison Estates Review,
Volume 1: Report and Volume 2: Evidence, SP Paper 612, Session 1 (2002).www.scottish.parliament.uk/official_report/cttee/just1-02/j1r02-06-vol01-02.htm
Almost 70 percent of the
profits made by Kilmarnock Prison Services Ltd (KPSL), a subsidiary of Premier
Custodial Group - the operator of Kilmarnock Prison, allegedly came from hidden
subsidies handed out by the Scottish Executive, according to John Swinney, leader of the Scottish Nationalist Party (SNP).
In the last two years
(2000-2001, 2001-2002) the Scottish Executive has paid £413,689 in non-domestic
rates (municipal taxes) for the prison and £277,000 for the cost of the prison
service controller and two other staff. Over the same period HMP Kilmarnock's
profits - which were detailed in a letter from Elaine Bailey, managing director
of Premier Custodial Group Ltd. to the Justice 1
Committee - were £321,000 in 2000 and an estimated £700,000 in 2001.
Neither of the costs appeared
in figures previously quoted by the Executive as the annual payment made for
the use of
Mr Swinney
said: “
Kilmarnock Prison Services Ltd
has been fined £455,757 for contract failures in 1999-2000 and a further
£178,671 for 2001-2002, according to the chief executive of the Scottish Prison
Service.
The figures were revealed in
an answer to a parliamentary question on
Prison privatisation could be
on the agenda again in
The comparison with
ICPA
PROVIDES PLATFORM FOR INDUSTRY
Wackenhut’s tip for emerging economies
Countries deemed ‘emerging
markets’ and classified by the financial community as ‘speculative grade’ for
investment can still attract world class private prison management companies
and investors as long as these countries implement “a series of acts designed
to mitigate risks,” according to Ron Champion of Wackenhut
Corrections Corporation.
Mr Champion also suggested
that “for prison projects, governments may consider earmarking a percentage of
the proceeds from a national commodity that is exported for sale as a loan
security.”
He was speaking last year at a
conference where private prison companies were given another international
platform from which to argue their case. The concept of public/private
partnerships was a key
topic at the annual conference of the International Corrections
and Prisons Association for the Advancement of Professional Corrections (ICPA)
between 28 October and
Wackenhut Corrections Corporation,
Group 4 Falck,
The keynote address on
privatisation was given by Dr Ole Ingstrup, formerly
commissioner of Correctional Service of Canada and now president of the ICPA as
well as being a consultant whose clients include Group 4 Falck.
He tried to summarise “a few of the arguments” for both sides of the debate and
concluded that “we also need to seriously examine how the private and public
sector can develop a thriving partnership, so that together we work towards the
overarching goal of public safety through the safe integration of offenders
into society.”
A panel-led discussion
entitled ‘prison privatisation - what do we know thus far: a chance for some
answers’ dealt with just ‘six questions ... identified as commonly raised
issues in relation to private prisons’. One highlight of the discussion was
that “it is argued that monopolies generally perform poorly and enable significant
enhancement of union power. There is a desire to reduce the effect of
monopolies...”.
On the role of the private
sector in lobbying (see, for example, PPRI # 46 & 38) it was
reported “while lobbyists are often engaged to lobby for particular issues the
private sector has never been seen to lobby government for tougher legislation.
It is particularly unlikely because increased imprisonment results in greater
costs for government which is not favoured by legislators.”
ICPA board member Robert Goble
of Carter Goble Associates opened a workshop dealing with ‘agreement-assessment
methodology’ by arguing that “government must retain certain absolute powers
and functions of law, policy setting, planning and quality control ... but that
... competition should decide whether the government or private sector should
do the job and a continuing monopoly should not be allowed ... and there should
be strong accountability ... to decide if the job is being done in the best
public interest.”
In this workshop co-presented
by UK Detention Services and Group 4, the question was asked ‘why do private
sector services cost less than the public sector’. The reply was “a combination
of factors” including “there is a culture of improvement in the private
sector”. Asked what happens to prisoners if contract workers strike, it was
stated that “employee agreements have a no-strike clause. It has not been an
issue to date.”
Mike McCarthy of Group 4
Correctional Services Pty Ltd,
Private finance
Ronald Champion of Wackenhut Corrections Corporation was one of the speakers
dealing with financing methodology of private prisons. His advice was “governments
considering private finance initiatives (PFI, see PPRI #42) should
consult with a qualified financial advisor experienced in PFIs
to design a structure that meets the need of the country. This will save
valuable time and money,” he said.
He added: “when securing funds
from outside a nation, sovereign credit ratings become an important factor in
both the availability of financing and the cost of the funds. Long term credit
ratings (investments of greater than 12 months) are either classified as
Investment Grade (low expectation of credit risk) to Speculative Grade
(possibility of credit risk). Countries whose credit rating is classified as
Speculative Grade would find fewer potential investors, higher interest rates
and upfront fees and greater securitisation of the loan.”
Mr Champion also described
prison life cycle costs as: correction/capital six per cent; financing cost
nine per cent; and operations 85 per cent. It was during this workshop that he
also suggested an investment strategy for emerging economies.
Little hostility
During his workshop on
partnering, Charles Erickson of Group 4 stated that, in the
Private sector’s wish list
The private sector
professional group meeting discussed its role with ICPA and reported that
its objectives were:
* promoting and demonstrating
the link between justifiable profit making and the delivery of quality services
and products;
* moving the debate beyond
‘profiting from the misfortune of others’;
* presenting our capabilities
without being seen as soliciting contracts.
Under the heading ‘trends from
the private sector’ the group also reported:
* the
issue of privatisation will continue to be raised at all levels of government
and objective information will be required for decision-making;
* a
greater use of internet technology will alter business practices and enhance
linkages to roles and services from the private sector;
* more
balanced approached to community control will be available using innovative
technologies such as voice recognition, electronic monitoring, distant
learning, remote diagnostics, etc.
Its desired involvement from
ICPA included:
* include private sector
workshops to continue the process of promoting ‘win-win’ situations for
government and the private sector;
* promote discussions,
exhibits, workshops through case studies of successful and failed partnering
experiences of both sectors;
* work
with ICPA staff to develop well-conceived website links from ICPA to
information regarding private sector services and experiences.
Ideas for further research
included:
*develop at least 12 ‘best
practice’ examples from the private sector;
*share available research from
the private sector on management practices, design concepts, financing methods
and other areas that promote better corrections;
* support
and research initiatives identified by ICPA that would promote best practice.
As for future ICPA
conferences, the group’s wish list included:
* a
conference focussed on ‘best practices’ from all components of corrections that
will include private sector examples;
* permit a ‘private sector
track’ at each conference that presents issues and results that highlight
partnering;
*establish an award that would
be funded by the private sector to promote independent research.
PPRI recently asked the ICPA what,
if any, of the above had been implemented since the conference. A spokesperson
replied: “the ICPA is not an advocacy group.
The ICPA is a not‑for‑profit organisation dedicated to
providing a forum for criminal justice professionals to join in a dialogue and
to share ideas and practices aimed at advancing professional corrections. The ICPA conferences provide a venue to
create ongoing opportunities for dialogue, mutual support, and assistance
through a strengthened international professional network.”
n The ICPA conference was
sponsored by the American Correctional Association (see below), Carter Goble
Associates, CM Security Group Inc, ElmoTech Ltd,
Group 4 Correction Services Pty Ltd, JFE Security, Roche Diagnostics and T³
Associates Ltd (see below) as well as
The full
minutes of the ICPA conference are available from the ICPA,
n The ICPA has decided to hold
a series of Charles Erickson Lectures to take place at future ICPA conferences.
Charles Erickson, who died recently, was managing director of Group 4
Correction Services in
n In March 2001,
Locktalk, www.opseu.org/ops/ministry/locktalk/locktalkfeb0802.htm
ENDS
Prison Privatisation Report
International
Public Services International
Research Unit (PSIRU)
School of Computing and
Mathematical Sciences
30 Park Row,
Internet:www.psiru.org/justice
Email: Stephen Nathan,
stephennathan@compuserve.com