May 9, 2013 12:01 am

Chris Grayling to outsource £500m worth of probation contracts

Chris Grayling during the first day of the Conservative party conference©PA

Chris Grayling, justice secretary

Security companies and charities working with offenders will be able to bid for new probation contracts worth £500m a year, in a government drive to outsource more than half the work supervising criminals in the community.

The strategy is aimed at reducing the UK’s high re­offending rate and extending rehabilitation to more people. It will be based on payment by results. Companies and voluntary providers will be paid only if offenders avoid crime.

Chris Grayling, the justice secretary, described the plan as a “classic case of more for less” during the current austere climate.

“My ambition is we need a system that is more efficient and less bureaucratic . . . Private sector management skills . . . are very helpful in trying to create a leaner, meaner service,” Mr Grayling said in an interview.

Community supervision of 235,000 offenders each year will be put out to competition, while the state-run probation service will continue to manage the 30,000 highest-risk criminals who have completed sentences for serious violent and sexual crime.

The justice secretary needs to make significant savings given his pledge to broaden rehabilitation services to the 45,000 people on sentences of less than a year, who are outside the probation system.

The Ministry of Justice argues that it makes no sense to leave this group floundering upon their release from prison. The department’s data show that just under 60 per cent of those on short sentences reoffend within a year.

The contracts will be divided regionally into 21 separate deals that will be put out for tender this year and awarded by the end of next.

Mr Grayling has chosen the payment-by-results mod­el because he says it provides an incentive to best practice. “If your success financially depends upon your performance, then you actually will go out and look for the best ways of doing the job,” he said.

But the justice secretary, who previously presided over the Department for Work and Pensions’ poorly performing Work Programme, knows from bitter experience that payment-by-results projects are subject to gaming by providers.

In particular, the Work Programme has been dogged by allegations from charities that they have been used by companies as “bid candy” in the race to win contracts. Failure to lay down clearer rules about the relationship between prime contractors and subcontractors has left some bearing much of the risk without receiving an equivalent share of the rewards, they complain.

Evidence that far fewer sickness-benefit claimants than originally projected had entered the programme has led to suggestions that those harder to help are being sidelined in favour of those who are less so.

Mr Grayling said he was “really disappointed” by the way some charities accepted deals that “frankly, I think, were very unwise for them”. But he did acknowledge some of the Work Programme’s weaknesses.

He says the rewards offered to providers will be based on the performance of the whole cohort of offenders they manage, in order to cut down the chances that contractors will merely “park the most difficult people in the corner”.

That may help quieten critics of the payment-by-results model, but the Probation Service remains outraged at the outsourcing of its work to the private sector.

In a statement, Napo, the probation staff union, said the management of offenders should be “left in the hands of skilled, experienced professionals, and not given to unqualified private sector providers”.

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