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Ministry of Justice lags on prison construction

10 February 2020 | By Neil Gerrard

The Ministry of Justice’s rate of construction of new prison places has been “well below expectations”, a new report by the National Audit Office (NAO) has warned.

The NAO found that the HM Prison & Probation Service (HMPPS) expects to create 3,566 new prison places by 2023-4, against a target of 10,000 new-for-old places by 2020. So far it has built just 206, with a further 3,360 under construction. This excludes plans for 10,000 new places following a government announcement in August 2019.

The NAO said the slow rate of construction was mainly because of reduced and uncertain funding. The funding model for new prisons changed four times between October 2016 and December 2018, which reduced capital funding and delayed the programme.

In 2018-19, HMPPS spent around £1.69bn to operate prisons and £184m on capital spending, including £113m on maintenance and £71m on constructing new prisons and reorganising the estate. The prison estate comprises 117 prisons, of which 104 are publicly operated.

The NAO found that as of December 2019, the prison population was around 82,300, equating to 985% of the usable operational capacity of the estate.  Forecasts, which the NAO admitted are uncertain, predict that demand for prison places could exceed supply between October 2022 and June 2023.

The NAO was also critical of HMPPS for not having a “clear picture” of facilities management services in prisons before outsourcing the service. In 2015, it chose to contract out facilities management to Amey and Carillion in anticipation of saving £79m. However, the NAO pointed out that HMPPS had failed to make these savings because it “had an inaccurate and incomplete understanding of its assets, their condition, and required services”.

It added: “Due diligence was not sufficiently robust and HMPPS severely underestimated the demand for reactive maintenance work arising from vandalism and failing assets. It expected to pay providers £17.7m for variable costs (reactive maintenance costs above an approved threshold of £750 for each job, excluding vandalism) by 2018-19 – the fourth year of the contracts – but has paid £160.4m, a difference of £142.6m.”

The NAO has recommended that HMPPS should develop a “coherent, long-term strategy” for the prison estate that extends beyond in-year and spending review budget cycles. It should then use that strategy to work with the Treasury to agree multi-year funding for the prison estate to provide stability, it concluded. It also recommended that HMPPS “apply the learning” from its facilities management contracts in the lead-up to Amey’s contract coming to an end in May 2020.

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