Private prisons are now a multi billion pound industry – and one company is soaking it up

The government announced that two more private prisons will be opening in Britain. And while the model is failing, it's making one company very rich indeed.

Outsourcing giant Serco has been handed a colossal £3.6 billion in government contracts for private prisons and accompanying prison services, according to newly-released figures. 

Private prisons have been around since the 1990s, following an outsourcing flurry by the government under controversial Private Finance Initiatives (PFI).

But the business has flourished in recent years, and turned into a multi billion pound industry for security companies like Serco, G4S, Sodexo, and even the maligned Carillion.

And now Serco is under investigation by the Serious Fraud Office, other shocking revelations have come to light.

How many private prisons are there?

There are currently 14 private prisons in Britain, with another series of young offender institutions (YOIs) and youth security facilites.

Serco runs five of the adult private prisons. G4S runs another five of them, plus at least three security training centres (STCs) and one YOI – including the infamous Medway STC and Oakhill YOI.

The rest of the 14 HM Prisons are run by Sodexo Justice Services.

How much do private companies make out of running prisons?

According to a Freedom of Information request by the office of shadow justice secretary Richard Burgon and seen by Left Foot Forward, the government’s most expensive contract is with Serco, for running HMP Thameside in South East London.

Serco got a cool £931 million from the taxpayer to run the facilities imprisoning 1232 people.

Thameside was part of the Design, Construct, Manage & Finance (DCMF) programme and it was given to Serco to build and run for 25 years. It opened in 2012 with an original capacity of 900.

Has it paid off?

No. The government admitted last July that it would not make a promised £115 million in savings from privatising prison services.

A statement from the National Offender Management Service said at the time:

“A contracting exercise exposed that historically the costs of maintenance and services were not clearly understood by the business and consequently planning assumptions have not held true. The contract is therefore underfunded and the declared efficiency savings reduced.”

Private prisons were also found to be rife in poor performance (particularly in Carillion’s case), contract failings and widespread violence both among prisoners and between prisoners and security staff.

G4S-run young facility Oakhill recorded 330 assaults in six months at the end of last year.

Why does it all spell Tory trouble?

Serco is under criminal investigation for allegedly overcharging the Department of Justice in an prisoner electronic monitoring contract. But that didn’t stop the government from appointing the company’s former head of public affairs, Edward Argar, as the new junior justice minister earlier this month.


Burgon told Buzzfeed at the time that “it is in the public interest that the government clarifies what dealings Mr Argar will have with Serco in his new ministerial capacity.”

Will prisons be taken back into public hands then?

You’d think that would be the obvious conclusion, but instead Minister for Prisons, Rory Stewart, announced yesterday he would allowing companies to bid for two new contracts. One at the site of the former Glen Parva prison, and a new one at Wellingborough, Northamptonshire.

Carillion had originally bid to build and run the sites, but its recent collapsed resulted in a whole new contracting process.

The projects are part of a £1.3 billion scheme by the government, aiming to create up to 10,000 new prison places.

Private companies will be hoping to build and run the site at Glen Parva, and manage the Wellingborough prison after it has been built by the state.

Burgon slammed the plans, accusing the government of being “obsessed” with privatising and outsourcing prisons.

Labour’s shadow justice secretary Richard Burgon told this site:

“From the crisis in prisons maintenance to the failings of our probation services, the Tories’ obsession with privatisation and outsourcing has caused widespread damage to our justice system – and it’s the public who’ve had to foot the bill.

“With a Labour government, there will be no new private prisons and no public sector prisons will be privatised. Labour will bring all the outsourced prison maintenance contracts back in house at the earliest possible opportunity. The Tories must abandon this failed experiment of prison privatisation.”

Whoever bids for the new prisons, it’s likely to spell bad news for our justice system.

Joana Ramiro is a reporter for Left Foot Forward. You can follow her on Twitter for all sorts of rants here

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