All markets have their peculiarities, which determine how efficient they are and whether they produce the best result. This chapter describes the market – or ‘quasi-market’ – for adult prisons, the customer and suppliers, and the way it has operated.

Quasi-markets in public services

Markets for public services have been described as ‘quasimarkets’, as they are so different in kind from markets as classically understood (Ferlie et al, 1996). We lack a proper taxonomy of such ‘quasi-markets’, each with their own characteristics, in part because they continue to evolve so rapidly, so much so that generalising across them is not very productive. Prisons, for example, share with the NHS quasi-market the existence of a dominant public sector provider which is also the customer for private or independent sector provision. But in the NHS, there are multiple purchasers at local level, and patients can (in theory) exert some choice as ‘customer’. With prisons, there is only one purchaser, and the ‘users’ are hardly ‘customers’.

Recently, the Institute for Government has been building up a useful body of work looking at what works, and does not, in commissioning public services: Gash and Panchamia (2013); Gash and Roos (2012); Gash et al (2013). The pro-privatisation pressure group, Reform, has published a telling analysis of shortcomings of such quasi-markets (though handicapped by uncritical faith in market solutions, and blindness to possibility of improvement in the public sector; Haldenby et al, 2014).

There has been little written about the operation and structure of the prison quasi-market specifically. In 2002 the Competition Commission conducted an inquiry into prisons, specifically to assess the effect on competition of the proposed acquisition by G4 Falck of the Wackenhut Corporation in 2002 (Competition Commission, 2002). In 2011 the Office of Fair Trading commissioned research on quasi-markets for public services from PWC, which included a brief case study on prisons (Office of Fair Trading, 2011). Panchamia (2012) discusses competition in prisons.

Scope and size of the quasi-market

Prisons are part of wider markets for related services in the UK, in which all the commercial suppliers operate to varying extents. Most operators also provide similar services globally, particularly the US and Australia.