Two of the private companies that provide 50% of probation services in England and Wales have confirmed to MPs they will have to consider quitting if a Ministry of Justice review fails to deliver improvements.
Interserve Justice and MTCnovo, which have contracts worth more than £150m a year to run “community rehabilitation companies”, have told the Commons justice select committee that their finances are unsustainable. “Our work is going up, our payment is going down,” said Yvonne Thomas, director of justice at Interserve.
The warning that pulling out of their probation contracts “will be an option on the table that will have to be considered” was delivered after the chief inspector of probation told MPs that probation privatisation had proved “enormously difficult” since it was introduced in 2014.
The transforming rehabilitation programme was introduced by Chris Grayling when he was justice secretary. It involves 21 community rehabilitation companies (CRCs) taking over the supervision of 140,000 “medium- to low-risk” offenders each year while the publicly run National Probation Service (NPS) continues to supervise high-risk offenders.
The chief inspector, Dame Glenys Stacey, said the probation system was in a very “unsettling position”. The number of offenders under probation supervision was 30% fewer than anticipated and payment was largely linked to the number of offenders “through the door”, which had led to substantial financial challenges, she said.
“They are running with ever fewer professional staff and are taking other steps to reduce expenditure wherever possible. They are pared back and focused on what is measured and rewarded and seeking to avoid stinging penalties for non-delivery against their targets,” said Stacy.
“The financial model, the financial underpinnings for these organisations, is not sufficiently stable and it is substantially inhibiting these CRCs as they seek to develop and implement new operating models,” she said, adding that promised innovations had yet to become apparent.
She said the programme had proved “a very significant cultural challenge” for probation: “This wholesale move to fragment the service and give it a commercial edge has been enormously difficult … No one in my position would feel comfortable at the moment with the way the service is performing.”
The chief inspector said CRC staff were overwhelmed by workloads while attempts to implement “half-baked” new operating models had stalled. This contrasted with the “acceptable” performance of the NPS with high-risk offenders “safe in the arms of the state”.
Nicky Park, head of prison services at the St Giles Trust, which has pioneered “through the gate” resettlement programmes for released prisoners, said it had been reduced to a “barebones service”, which had become an “admin heavy” tick-box exercise and no longer delivered quality interventions.
The MoJ is due to complete a review of the £889m-a-year probation service, which supervises 200,000 offenders a year.
The two private justice companies giving evidence to the select committee made clear they were pinning their hopes on ministers “fixing” the payment mechanism for the programme so the financial situation was put on a stable footing.
Both said they hoped something sensible would come out of the MoJ review, but agreed with the suggestion from MPs that they would have to discuss withdrawal from the contracts if it failed to deliver. However, Thomas added: “Nobody is talking about walking at this stage.”
