GraylinG4s ‘Poison pill’ privatisation contracts could cost £300m-£400m to cancel

Mockery of Justice

‘Unprecedented’ clauses guarantee firms 10 years of profits even if new government scraps controversial probation contracts

Taxpayers will face a £300m-£400m penalty if controversial probation privatisation contracts are cancelled after next May’s general election under an “unprecedented” clause that guarantees bidders their expected profits over the 10-year life of the contract.

Labour is already committed to unpicking the justice ministry contracts to outsource probation services but will not now be able to do so without incurring the multimillion pound bill because of “poison pill” clauses written in by Chris Grayling‘s department.

The Ministry of Justice say they are only following Treasury guidance by including the clause, which raises the prospect that similar clauses are being included in other politically controversial contracts across Whitehall that are to be signed before next May’s general election.

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