Privatising Justice

The impact of the Private Finance Initiative in the Criminal Justice System

25-Mar-2002

The report was written and researched by the Centre for Public Services (CPS) and concludes that the U.K. already has the most privatised Criminal Justice System in Europe. The Justice Forum which comprises all major unions in the justice system believes that privatisation is a bar to joined-up and effective justice because of the inflexibility of contracts, the length and complexity of the procurement process and the poor performance of information technology. In addition PFI is at least twice as expensive as public sector investment and it results in poorer service delivery.

The CPS research concludes that the value of signed and in-planning PFI projects in the Justices System now exceeds £13 billion. However, an accurate national figure is not possible because of poor levels of information disclosure and the misleading presentation of capital costs. The Labour Government has systematically driven PFI projects within the Criminal Justice System since 1997.

The Home Office and Lord Chancellor's Department will have signed or reached preferment bidder stage on contracts worth a further £4.6billion by 2004. PFI expenditure by the Lord Chancellors Department has increased

from 20% to 57% of all capital expenditure over the last three years. The cost of consultancy fees for PFI represents 5% of each project, amassing £144 million by 2002, equivalent to nearly 5,000 new Police Officers for a full year or 7 publicly funded courts.

The report concludes that claimed successes for PFI projects are largely an illusion. The cost of 3 court IT systems rose by 79% above the fixed control price; the transfer of risk is not financial as claimed but on service delivery, but there is little evidence of monitoring of discrimination issues within contracts, there is a lack of evidence of cost savings, a failure to justify best value in planning and procurement and financial information is systematically withheld from the public on "commercial in confidence" grounds. The claim of additional innovation through PFI is also found to be unsubstantiated.

The research finds that nearly all private contractors employ new staff on lower rates of pay, with fewer holidays and limited sick pay entitlement. Staff in private jails are paid 25% less on average than their state counterparts. In addition, consultation with trade unions in planning and procurement has been negligible and dominated by secrecy.

The report estimates that by 2010 virtually all 42 Magistrates Courts Committees will have PFI projects and the private sector will in effect own or operate most court complexes. Most Police Authorities will have one or more PFI projects by 2010 and all new jails will be privately operated, further stereotyping the public sector who will be responsible for the older facilities.

The CPS report recommends that all further PFI procurement should cease, that public sector capital investment should increase substantially and that further resources should be made available for the Justice System in the forthcoming comprehensive spending review 2002.

Please contact the Centre for hard copies of the report.