Probation outsourcing is a case study in failure

The Ministry of Justice has announced that it will bring the management of all offenders back in-house, a landmark decision which reverses reforms initiated six years ago by Chris Grayling. The then Justice Secretary, ignoring warnings that his reforms wouldn’t work, outsourced the management of all medium- and low-risk offenders in England and Wales to private companies.

The failure of those reforms have led to poorer services for offenders, adding to pressures on prisons and increasing risks to the public. While it will bring its own challenges, re-nationalising services is the right decision, and this damaging episode shows why government must get crucial outsourcing decisions right.

Failures gave the Ministry of Justice little choice

The Chief Inspector of Probation concluded that the outsourcing of probation was ‘irredeemably flawed’ – out of the 21 companies delivering probation services, she has found 80% to be inadequate in at least one key area, and many in several. The National Audit Office said the MoJ’s rushed approach had ‘set itself up to fail’, and there was ‘little evidence’ of promised innovations. The Public Accounts Committee found 19 companies have failed to meet targets for reducing the frequency of re-offending per offender, leading to an increase of 22% between 2011 and 2017. Between January 2015 to September 2018, the number of offenders recalled to prison for breaching their licence conditions increased by 47%.

At the heart of these problems, as the inspector said, is that ‘probation is a complex social service and it has proved well-nigh impossible to reduce probation services to a set of contractual requirements’.  Working Links, which ran probation services in the South West, collapsed in February after the inspector found its leaders had focussed on avoiding financial penalties from missing contractual targets rather than improving the performance of services.

Bringing services back in-house is the right decision, but it won’t be an instant fix

David Gauke, the Justice Secretary, has said the Government will bring the management of probation services back in-house in 2021, while retaining a role for the private and voluntary sector in delivering ‘innovative’ services. As he admitted, the department has proved unable to design a contract that delivers good quality services. And the National Probation Service (NPS) has consistently been performing much better at managing high-risk offenders.

But while he is right to take responsibility by bringing services in-house, the change in approach won’t bring an instant fix. The NPS will face many of the same pressures that providers have faced, including the effects of problems in prisons such as worsening rehabilitation. And the transition creates its own difficulties which the department will need to navigate. It will involve a major reorganisation, with the responsibilities of 21 companies being converted into 11 regions which don’t naturally fit with the boundaries of other services including health, policing and local authorities. Hundreds of thousands of cases will need to be transferred. And the department will need to secure extra funding, given current levels of spending were based on many of the companies being loss-making.

Government should use probation as a case study in how not to contract out services

A flawed decision, a rushed procurement, the failure to find a model that worked, several suppliers collapsing, and ultimately, poor quality services affecting tens of thousands of offenders, their families and the public – the story of probation over the last six years is a case study of why government needs to improve the way it makes key outsourcing decisions.

Despite clear warnings from the Institute for Government, other industry experts and many suppliers, the department outsourced services with inexperienced suppliers and no evidence that they could make the contract work. As Meg Hillier, the Chair of the Public Accounts Committee, recently said, ‘the Cabinet Office, HM Treasury and the Major Projects Review Group share responsibility for these failures [for] providing insufficient challenge’. 

Yet while probation is an extreme case, as new IfG research published later this summer will show, it is far from the only example of government using outsourcing poorly in areas or ways that don’t deliver benefits and bring negative outcomes. While its impact is yet to be seen, the Cabinet Office’s Outsourcing Playbook – a guidance document for officials – published in February, is an important effort to address this. It is notable that the probation reforms would fail most of the Playbook’s tests.

The decision to renationalise probation is a landmark case of government recognising that outsourcing hasn’t worked. The Ministry of Justice has said that it will ‘build on the successful elements of the current system’. Government would do better to seriously learn from all those unsuccessful elements which made that system fail on so many levels.