The Ministry of Justice was wrong to outsource probation

Last Friday, one of largest private providers of probation services in Britain collapsed. Working Links, which ran probation services in three regions in England and Wales, went into administration after an inspection found its services in the South West to be ‘inadequate’. Yet the company’s problems are just another sign that the outsourcing of probation – launched by Chris Grayling, then Justice Secretary, in 2013 – has failed. The Ministry of Justice may have succeeded in cutting costs over the last five years (the data is not available to make a direct comparison), but it has failed to procure high quality services that properly rehabilitate offenders and keep the public safe. If the department cannot design contracts that achieve the latter, it should bring the services back in house.

The outsourcing of probation has failed

Dame Glenys Stacey, the Chief Inspector of Probation, was damning in her report into the Dorset, Devon and Cornwall Community Rehabilitation Company (CRC) run by Working Links – one of 21 regional companies that have taken on probation contracts for medium and low-risk offenders in England and Wales. Its services were ‘poor’, ‘insufficient’ and ‘inadequate’, she said, yet its leaders focussed on avoiding financial penalties from missing targets rather than improving performance.

Inspectors found staff avoiding giving offenders a ‘red’ risk rating because it meant they would need to be seen every week, which would use up extra resources. They also found evidence of staff marking an offender’s sentence plan as complete without having met them, in order to meet targets. “We have found professional ethics compromised and immutable lines crossed because of business imperatives” the Inspector said.

But this is not just about the failure of one company. Since 2015, private companies across the probation sector have been failing to meet targets, leading to unsafe services and increased re-offending. In December 2016, an inspection into the London Community Rehabilitation Centre found that ”unmanageable caseloads, inexperienced officers and extremely poor oversight” meant the services were so poor they were putting people at risk.

In February last year, the Chief Inspector concluded that overstretched companies across the sector were failing to monitor offenders properly. Their services were “in most cases wanting, often significantly so”. All eight of the private probation providers she has inspected since then have been ‘inadequate’ in at least one key area. Three were found to be inadequate in three out of four areas of case supervision, meaning staff were failing to properly support offenders.

Outcomes have also got worse. Out of 21 companies, 19 have failed to meet their targets for reducing the frequency of re-offending. While the number of reoffenders has decreased slightly, the total number of reoffences has increased compared with 2011, before the service was outsourced. Innovations have also not materialised – a new scheme to integrate freshly released prisoners turned out to mean giving them a leaflet.

The Ministry of Justice has failed to design contracts that deliver quality probation services

When the Ministry embarked on the outsourcing of probation services back in 2013, the Institute for Government warned that it would be ‘highly problematic’. We argued that there was no market of existing high quality suppliers and previous attempts had failed. This proved to be a major problem – made worse by the fact that the Ministry of Justice rushed through the changes.

We also argued that probation was a poor choice for outsourcing because re-offending outcomes are hard to measure and cannot be controlled by one provider alone. They depend on what happens in courts, policing and prisons. This has also proved to be correct: the MoJ has been unable to design a probation contract capable of accounting for this complex system. It currently pays provider by results – around four-fifths for meeting contractual requirements during the contract (such as completing sentence plans) and up to a fifth for reducing reoffending.

Given the increase in reoffending, most companies have made significant losses on the latter- even though much is beyond their control. Cuts in policing, which vary by region, have a significant effect on re-offending rates. And magistrates and judges have reduced community work orders and other sentences that are profitable to providers because they are sceptical about the quality of the companies’ work. Loss-making companies have in turn looked to cut corners elsewhere, as numerous inspections show. The department has been unable to codify what is required for a good service, and has instead created a market where providers focus on gaming the system to avoid financial penalties from missing targets.

If the Ministry of Justice can’t fix probation contracts, it should bring services back in house

In July last year, David Gauke, the Justice Secretary, recognised that the quality of services had ‘fallen short of expectations’ and announced that he would terminate the contracts of Community Rehabilitation Companies in 2020, two years early. The department is consulting on what should replace them. It has indicated that it favours continuing to use private providers while redrawing the map to create ten probation regions and looking at new payment methods.

These changes still fail to address the problems we identified at the outset. The supplier market, while now battle-scarred, still looks seriously unhealthy. Of 21 companies, 14 are forecasting losses. Interserve could collapse at any moment, and it and MTCnovo, which together deliver half of probation services in England and Wales, have already said they could quit the probation sector altogether. Aurelius, the owner of Working Links, has already done so.

More than this, the Government has still failed to demonstrate that it can design and monitor probation contracts in a way that ensures private companies deliver services of adequate quality at a competitive price. Implementing a new system with a similar approach to contracting and the same struggling suppliers risks another damaging failure.

If the Government cannot design a probation contract that works, then rather than pressing ahead it should start bringing probation services back in house. While not directly comparable, the publicly-run National Probation Service still delivers services for high-risk offenders that inspections show are consistently much higher quality than outsourced services. In Wales, management for low and medium risk offenders will be transferred back in house in 2020 in order to better integrate prison and probation services. The Ministry of Justice could adopt this approach in England, while continuing to try to design probation contracts that work in smaller regional pilots where the stakes are lower.

Proper supervision and rehabilitation of offenders is vital to the safety of the public and to giving offenders a path out of the criminal justice system. The experiment with outsourcing probation services over the last five years has failed, with significant consequences for the quality and safety of services. The Ministry of Justice ignored warnings about the readiness of the market and its ability to contract services successfully. In deciding what comes next, it must not repeat the same mistakes.