Around the World in 80 ideas

Around the World in 80 Ideas

PUBLIC SERVICES
36: Competing for convicts
Private prison provision and management

The problem: degradation, inefficiency

State-run prisons suffer from the familiar problems of other public-sector institutions that face no competition: inadequate supply, poor quality and high cost. All too often, prisons are schools for crime. Many of them suffer from serious problems associated with over-crowding, poor sanitation, violence, drugs and sexual assault. Prison warders have become a powerful vested interest, exerting undue influence over prison policy.

The idea: contract management

To solve these problems, remove the state monopoly in prison provision and allow the private sector to build and run new prisons.

Examples: worldwide reforms

In the United States there is a thriving market in the provision and operation of private prisons. Around 30 of the 50 states in the US now make use of private prisons.

Sadly, the US prison population has tripled over the last two decades, due in part to the 'three strikes and you're out' policy brought in by the Clinton Administration. Private prisons boomed: 1999 they accommodated 90,000 prisoners. But they provide superior infrastructure, improved security and much better living conditions for offenders.

Several private companies compete for prison contracts. Correctional Services Corporation, which became a public quoted company in February 1994, is one of the largest. It manages jails and detention facilities in 19 states as well as in Puerto Rico. The company has three divisions: adult, juvenile and community corrections. In 1994 CSC formed an alliance with the French company, Sodexho. Together they operate prisons in the United Kingdom and Australia. CSC is one of Wall Street's top performing stocks.

Another leading US firm in this rapidly developing market is Wackenhut Corrections Corporation, founded in 1984. It currently manages 55 prisons, not just in the UK, US and Australia, but in Puerto Rico, South Africa, Canada, and New Zealand. In the UK, the company operates the immigration detention centre at Gatwick airport and manages four prisons in a joint venture with Serco.

In the UK, competition was introduced gradually. The first private remand prison, the Wolds, operated by Group 4 Remand Services, opened in 1992. A second prison for convicted adults was opened in May 1993 in Redditch, run by UK Detention Services. Meanwhile, the Prison Service was established as an agency in April 1993 (see the chapter The Next Steps), giving it greater managerial freedom.

Nine out of 136 prisons, plus immigrant detention centres, are now run by the private sector, housing around 6,000 offenders - 8% of the total prison population. In England and Wales all prisoner-escort services have been contracted out to private companies. Prison education, catering, health care and construction work are put out to tender.

The results: locking in quality

Competition works. The new privately built and operated prisons have established new standards in efficiency, facilities, and prisoner welfare and training. In the UK, the Inspector of Prisons, an independent watchdog, consistently reports that standards of care are higher, and problems (such as assaults and disorder) are lower, than in government-run prisons, while in private prisons, inmates spend more of their time, more purposefully, outside their cells.

Despite all this, the average cost of public-sector jails in the UK was 15 per cent higher than private jails in 1998 - though market testing has helped to reduce this gap.

For these reasons, and after initial hostility, the Labour government elected in 1997 grew to be an enthusiastic champion of market testing and prison privatization in the UK. Home Secretary Jack Straw, who had once described private prison management as a 'morally repugnant' idea, now gave the go-ahead to several privately-managed jails; while another minister publicly warned the prison officers that any public-sector prison which consistently fails to meet the required standards would face privatization too.

Private prison providers also do more rehabilitation work with their inmates. Prison industries flourish, for example. In 1999, Corrections Corporation of America became the first US prison service, public or private, to win a national accreditation sponsorship for its vocational trades courses. Offenders who participate in this programme enjoy a much wider choice of jobs once they are released, reducing their chances of returning to crime (and its costs to society). The company is planning to expand its training programmes in prisons in Colorado, Florida, Georgia and Oklahoma.

Whereas it took 15 to 20 years to build new prisons in US states, private prisons have been built in 6 to 9 months. In the UK it used to take ten to twelve years to build a prison: private companies have demonstrated their ability to build jails in less than 9 months.

In the UK, this has emptied police stations cells which were previously full of people on remand or convicted of offences by the courts, but for whom there was no space in the prison system. In 1998, over 1500 such prisoners were accommodated in police stations in the London area alone. Police men and women were required to provide security, transportation and escort duties - which was highly wasteful and inefficient.

Assessment: jailhouse rocks

A competitive contract system brings in the discipline of contractual obligations and the need to meet specified standards. It puts pressure on all prospective providers to improve their quality and keep down costs. Thus in the UK, public-sector management teams submitted the winning bids at Manchester (Strangeways) and Buckley Hall in Rochdale which was previously managed by the private-sector company Group 4.

The biggest obstacles to change have been the prison unions and the politicians who have been influenced by them. America's public prison unions have been hefty contributors to political campaigns: in 1998 the largest of them donated $4.1 million. Correctional Services Corporation, by contrast, gave just $280,000. Perhaps it is not coincidental that several states have brought in laws to stop the privatization of public-sector jails.

In the UK, the Prison Officers' Association continues to oppose more efficient working practices. However, the union is beginning to wilt under the threat of more competition.

The private sector's record is not perfect. Six high-security offenders escaped from a CCA jail in Ohio in 1998 while elsewhre there were assaults when high- and low- security inmates were allowed to mix. Prisoner-escort privatization in the UK was ridiculed when prisoners escaped or were mistakenly set free. But many of these errors were the result of 'teething' problems, or the sabotage of public-sector unions, or simply that the media re interested in private-sector prisons while mistakes in public jails go unnoticed.

Though not perfect, the fact is that overall, private prisons perform better on every key measure. Privately built and managed prisons offer a much better chance of addressing offenders' core problems, treating them humanely (and at lower cost), and making them fit to make a positive contribution to society.

For further information:

Private-sector prison operators all have websites. Two notable ones are www.wackenhut.com/wcc and www.correctionalservices.com.
The US Federal prison service and UK prison service both produce annual reports, and their websites are a fund of information. The latter's website is at www.hmprisonservice.gov.uk.
Young, Peter (1987)The Prison Cell: Adam Smith Institute, www.adamsmith.org.
Harding, Richard W (1992) Private Prisons in Australia: Australian Institute of Criminology www.aic.gov.au.