The end of competition?

At the time of writing, it seems that competition between public and private sectors to run prisons is set to wither away. During the Coalition government, the Conservative Justice Secretary, Chris Grayling, suspended market testing for the lifetime of the last Parliament, and gave the contract for the new prison at Wrexham, the biggest by far ever built in the UK, to the public sector, without competition. NOMS officials say that market testing will not be resumed in future, unless and until a public sector prison fails so badly that it needs to be market tested. Given the history of market testing (see Table 6.2), that seems a remote prospect. It is not clear what they intend when existing prison contracts end (some will continue into the 2030s, unless terminated early).

But that is not the end of dramatic changes in policy. At the same time, the new contractual model outline at the end of Chapter 2 (Figure 2.4 is reproduced later in this chapter for ease of reference) is being put in place across the prison system. And not only in public sector prisons: NOMS is insisting that existing prison contracts be rewritten to impose this new model also on the private sector – what is called ‘de-scoping’. (One company, it has said, has given in, another is still resisting: as well they might, since they are duty bound to maintain shareholder value, which this interference hugely diminishes.) This provides further evidence for the conclusion reached in Chapter 6 – that this ‘market’ is completely dominated by a monopsonistic purchaser, for whom commercial contracts are alterable at will.

It is a matter of concern that such big policy changes are being made without public explanation or examination of the issues, or supporting evidence. Doubly so, since as described in Chapter 6, NOMS is itself an interested party – as both market manager and competitor. It is adjudicating in its own case. Some ‘level playing field’!

This chapter examines the three propositions behind these changes:

• • There is no longer any need for competition, because there is no significant difference between sectors, on either cost or quality.