Government slammed over prison building cost overruns

Government plans to provide and maintain safe, secure and decent prisons have run into cost overruns and delays, and its flagship initiatives have not delivered, according to a National Audit Office (NAO) report

Her Majesty’s Prison and Probation Service (HMPPS) has had to spend £143m more than expected over the last four years, the audit watchdog found.

It had an inaccurate and incomplete understanding of prison conditions and the services needed, and had also severely underestimated the need for reactive maintenance work due to vandalism and breakdown.

In 2014-15, HMPPS decided to outsource facilities management and expected to save around £80m by contracting out to the firms Amey and now liquidated Carillion but failed to achieve this. It had an inaccurate and incomplete understanding of its assets, their condition and required services.

HMPPS expected to pay providers £17.7m for variable costs (reactive maintenance costs above an approved threshold of £750 for each job, excluding vandalism) by 2018-19 – the fourth year of the contracts – but has paid £160.4m, a difference of £142.6m.

Over the last decade HMPPS has taken 1,730 cells permanently out of use and it expects to lose 500 places a year because of the poor conditions of the remaining estate. Over 40% of prisons need major repair or replacement in the next three years. There is currently a backlog of major repairs that will cost £916m to fix.

In addition, HMPPS has struggled to create new prison places, largely because of delays in agreeing and receiving funding to build new prisons. This meant construction work began later than planned. In addition, HMPPS was not able to close old prisons and replace them with new ones due to high demand, which meant it received less money from sales income.

HMPPS sold one prison site, generating receipts of £104m by 2018-19 against a target of £321m by 2020-21.

Lack of sales receipts further reduced the funds available to invest in the programme. HMPPS could not dispose of unsuitable accommodation as planned because of the lack of new prison places becoming available, and prison population and capacity pressures.

It had initially identified 20 possible prison closures, assuming there would be new prisons replacing some closures. However, the rising prison population meant HMPPS could not close or repurpose accommodation

The NAO said HMPPS expects to create 3,566 new prison places by 2023-24, against a target of 10,000 new-for-old places by 2020. So far, it has built 206, with a further 3,360 under construction. This excludes plans for 10,000 new places in response to the government’s announcement in August 2019.

The funding model for new prisons changed four times between October 2016 and December 2018, which reduced public capital funding and delayed the programme

The NAO report said that while HMPPS has committed to providing a safe, secure and decent prison estate, its plans to achieve this are failing. It has not been able to provide enough prison places, in the right type of prisons, and at the right time, to meet demand.

The Prison Estate Transformation Programme’s plans to create up to 10,000 new prison places to replace ageing, ineffective prisons proved undeliverable and outsourcing prison facilities management has not delivered expected efficiencies. If successful, these initiatives could have made a difference, but as it stands the prison estate is not meeting the needs of prisoners or those working in the prison system and represents poor value for money.

The NAO said HMPPS has been focussed on sorting out the immediate needs of the prison estate, investing its resources to address prison population pressures and deteriorating prison conditions.

It recommends that HMPPS develop a long-term strategy which sets out exactly what conditions prisoners should be held in and minimum levels of investment needed to ensure a safe, decent environment.

Gareth Davies, head of the NAO, said: ‘HMPPS has not been able to create enough prison places, in the right type of prisons and at the right time to meet demand. It has failed to deliver the savings it hoped for by contracting out prison maintenance services.

'Prisons remain in a poor condition, poor safety has reached record levels, and there are huge maintenance backlogs.

‘The government has recently committed to creating 10,000 new prison places and needs to learn lessons from its recent experiences. Crucially, HMPPS must work with the Ministry of Justice and Treasury to develop a long-term, deliverable strategy that will provide prisons that are fit for purpose.’

NAO report, Improving the prison estate

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

View profile and articles

Average: 5 (1 vote)

Rate this article

Related Articles