The role of the Probation Service - Justice Committee Contents

Examination of Witnesses (Question Numbers 416-458)

Clive Martin, Rob Smith, Chris Wright and Andrew Neilson

18 May 2011

Chair: Good morning, Mr Martin, Mr Smith, Mr Wright and Mr Neilson. We welcome you very much and the help you are going to give us because we are working on the role of the Probation Service. There is so much change going on, and we have so much experience collectively at this table that it would be very helpful for us to have the opportunity to ask you some questions about it. I am going to ask Elizabeth Truss to begin.

Q416  Elizabeth Truss: I start by asking about the impact that the creation of NOMS has had on the ability of the voluntary sector and other groups to get involved in probation services.

Clive Martin: In principle, it has had an effect in that it has been very welcoming to the voluntary sector. It has clearly put the voluntary sector as a key player in a mixed market provision. Over and above that, the ambitions that were stated in the original creation of NOMS have not materialised up and down the country. There have been some interesting initiatives but they have not really materialised. There has been a warm embrace, and that is not to be underestimated given some of the hostility that the voluntary sector faced in the past, particularly in prison establishments and elsewhere. It has not necessarily transformed the sector and it has not transformed the volume of provision to offenders by the VCS, in my view.

Q417  Elizabeth Truss: Would you say that that is partly to do with the level at which NOMS was introduced? You had end-to-end offender management, but starting at a national level rather than binding those local services together.

Clive Martin: At the point at which NOMS was introduced it was enormously ambitious. There were so many things going on. It was trying to implement regional commissioning, a mixed market, end-to-end offender management and through-the-gate provision. There were a number of things in the package.

Q418  Chair: They are mostly expressed in a jargon that outsiders would find very difficult to understand.

Clive Martin: The appointment of regional offender managers was a step or a nod in the direction of regional government, which was the flavour at the time and is no longer so. It was a step of decentralising towards regional structures. The appointment of regional offender managers was also an attempt to draw together the management of the prison and probation services, which had been entirely separately managed up to that date. The way the sector worked prior to that was very much in prisons or in the community. That had previously always been quite protected because it was seen in terms of security and necessity.

  The introduction of NOMS was a very ambitious programme, trying to do lots of reforms all at the same time. That led to quite a bit of confusion. Going back to your point about whether, if things had started on a more local basis, it would have been successful, we just don't know. Particularly the Prison Service, at that time, was a culture that was very centralised. People locally were very nervous to take decisions that could have been out of step with what the centre proposed.

Andrew Neilson: Can I just pick up on Clive's points there? It is symbolic of the difficulties that NOMS had that it did not have a definitive strategy for dealing with the voluntary sector until some four years after NOMS was set up. The interesting thing from the Howard League's point of view is that we have seen a gap between rhetoric and reality around the creation of NOMS and the engagement of the voluntary sector. The very things we hear, politically, that people value from the voluntary sector—smallness, localness, diversity, innovation and distinctiveness—are the sorts of things that have found themselves in difficulty under the market reforms that NOMS introduced. We saw a lot of small providers finding it very difficult to get engaged. That is partly to do with the language problem, and the bureaucracy and forms that they had to fill in. Also, as Clive was saying, it was to do with the drive to scale up things and the difficulty for small organisations to do that.

Q419  Elizabeth Truss: Have you seen a change in the culture of both the Prison Service and the Probation Service, and whether there is more willingness to work together to create an end-to-end solution?

Andrew Neilson: There was a willingness, but the symbolic incident or process that happened that sums up why NOMS really failed was the C-NOMIS IT system. That project was all about linking prisons and probation; they would have the same IT system. If they can't share information easily, it is very difficult to have an end-to-end system and it is very difficult to design a market around it. In the end, that failed. They do not have an IT system that they can share. It works only in prisons; it does not work in probation.

Q420  Elizabeth Truss: In an ideal world, how would things work best for you to be able to fit in at a local level as appropriate? What sort of structure would work for you?

Clive Martin: With both prisons and probation.

Chris Wright: There has to be some clarity around commissioning—who is responsible for commissioning and what is it they are commissioning? One of the challenges of NOMS over the past few years is that it has been very internally focused. It has made a lot of very positive external noises about what it wants to achieve. We have had a whole range of different commissioning strategies developed, first by regional offender managers, and then directors of offender management. The problem has been that they have not translated into an operational reality where there has been a coherent approach to commissioning at a local level. We want to have some clarity.

Q421  Elizabeth Truss: Essentially what you are saying is that the commissioning role should be clear and it should be at a more local level than the regional level. The regional level is too distant to achieve that.

Chris Wright: I am not sure I am saying that. I am saying I think there needs to be greater clarity around commissioning and it may happen at a number of levels, depending on the types of services that are being commissioned. Of course there will be services commissioned at a local level but, because of issues around scale, there will be services that need to be commissioned on a more national and regional level.

Q422  Elizabeth Truss: Rob, do you generally agree with that?

Rob Smith: Yes, absolutely. There has to be a mixed approach. On any national or regional commissioning basis, what we are constantly striving to achieve is to make sure we have that local agenda—that localism—with small and medium-sized voluntary sector organisations engaged. There is a tension within the system when you start moving to regional and national commissioning arrangements, particularly when you have prime providers, about how you engage with them. That has been a concern from smaller—

Q423  Elizabeth Truss: Who should be the commissioner?

Chair: That is a good question.

Chris Wright: It is a very good question. There is a real tension at the moment around probation trusts and the role that they will play—whether they are going to be providers or commissioners of services. Clearly, NOMS has a responsibility to set out a framework that facilitates commissioning. We perhaps anticipated that probation trusts would take on the mantle of commissioning at a local or sub-regional level.

Going back to an earlier question about how the Prison Service and Probation Service have responded to the voluntary sector, it is very difficult to talk about the voluntary sector as though it is a collective whole because it is very different. We are a relatively large voluntary sector organisation, but we take pride in operating at a local level. We are still waiting to see the Probation Service engage with the commissioning agenda and open up opportunities for the voluntary sector. It has become almost a joke that until a few years ago, when probation areas were required to spend 10% of their budgets on the voluntary sector, they didn't manage to do that.

Q424  Elizabeth Truss: But essentially you are saying that it should not be the probation trusts that have that commissioning role.

Chris Wright: If they have a commissioning role, they have a commissioning role. It is not necessarily to be confused with a provider role.

Q425  Elizabeth Truss: Is there scope to have a broader commissioning role that encompasses both prisons and probation? That strikes me as one of the issues.

Clive Martin: If you get probation as the sole commissioner, you get probation commissioning. If you have the Prison Service, you have the prisons. If you are trying to get a joined-up service for someone who is in custody, outside custody or returning to a community, then you need a commissioning structure that reflects all of that. There are similar structures like a local criminal justice board or whatever. It's a cliché, I know, but if you want some sort of joined-up, holistic service, and you don't just want that pandering to vested interests but you want some innovation and something different in there, you have to try and change the commissioning structure to do that. Something that makes sure that you bring in those community organisations or even things like local authorities is key.

Q426  Elizabeth Truss: Essentially, though, if the commissioning body is also a provider, you are in severe danger of a conflict of interest, aren't you?

Clive Martin: I don't know whether we have one view on this. I would certainly see that one of the difficulties of NOMS being a commissioner is the fact that it is a commissioner and a provider. I guess it depends on how much you believe in the ability of internal glass walls and all those sorts of things to overcome that sort of structure.

Q427  Chair: But if probation trusts aren't both commissioners and providers, the way we are heading is that there will be nobody local enough to engage people like yourselves in projects. We are going to come on to this in more detail in a moment. The probation trust might end up as the only intermediary between a very large commissioning body and yourselves. I am thinking of yourselves now as locally-based groups of people providing a service. If the probation trust itself cannot take on some of the work and sub-contract it to people like you, there is no opportunity for you, is there?

Clive Martin: Rob might want to talk about that. The shift to seeing the probation trust as being a local broker rather than a local provider—and included in that might be some commissioning role—is a way to go. The experience in West Mercia is a particular example of one way of moving in that direction.

Rob Smith: I am just trying to work out in my own mind what, specifically, small and medium-sized probation trusts would be looking to commission. There is more in terms of their role of being a broker and a co-commissioner and influencing other commissioners locally, particularly within the local authority, to have the other contributors at a local level in terms of accommodation providers, education and training, and all the different seven reoffending pathways, and getting those other agencies involved in commissioning services that specifically meets the needs of offenders.

  Probation is a very small organisation at a statutory level locally, but it has the ability to be strategic and to influence those levers to allow housing organisations, CABs and mentoring organisations to deliver services on the back of other commissioning strategies. That is the trick at a local level for probation to be able to pull off.

Q428  Mr Llwyd: I should declare an interest. I am on a Howard League panel that is reporting in June on the preponderance of ex-service people in the criminal justice system.

The Government's Breaking the Cycle document refers to "a need to signal a clean break with the controlling, centralising tendencies of the past by making a clear commitment to decentralisation". I know, for example, that members of Clinks have said that they very much approve of measures to devolve delivering accountability to the local level. On Monday of this week, I was at a conference in Manchester. People's biggest concern—and I am speaking of those within NOMS and without—was that, for example, Wales and the north-west was one commissioning unit. It seems to me that that is going to militate against any idea of local delivery, quite frankly. Are we not going to end up with a few very large providers and maybe a very few voluntary organisations just chewing at the edges?

Andrew Neilson: That is one of the reasons why the Howard League has advocated in the past more local authority involvement in criminal justice. I know that the Committee previously also looked at that in its justice reinvestment report. Is the regional level really the right level for this? In Scotland, they have criminal justice authorities where probation is within the authority alongside local authorities, police forces and the Prison Service. It is a more localist model, whereas we seem to have a lot in the centre and then at the regional level.

Q429  Chair: These are not regions, are they? These are arbitrary constructs, including West Yorkshire with Northumbria, but South Yorkshire in a different region. They are vast areas.

Rob Smith: These are what I would call pan-regional lots. West Mercia is in the same lot as the Isles of Scilly. I stand to be corrected, but in relation to the specification for the community payback, which is being let on that basis, we don't yet know what scope there will be in terms of incentives and the ability to get those prime contracting organisations to engage at a local level. We don't know the detail of it. There is a big concern there because community payback, in particular, is such a large provision in a probation trust's activities on a local basis. Locally, within West Mercia, there have been some incredibly innovative ways of delivering community payback, which is heading towards cost-neutral in some cases. Will that be lost in these large commissioning arrangements? Will local voluntary sector organisations lose out? Our concern is that they will.

Q430  Mr Llwyd: To sum it up, you are all saying that there is a lack of clarity here that is rather worrying, given where we are.

Clive Martin: The other issue on commissioning is the fact that in this area the evidence of what works is not entirely clear. We have a recent tradition, for example, of lots of money being invested in cognitive behaviour programmes. Some have worked and some have not. We now have some alternative theories about what works in terms of desistance theory, both from North America and this country. From our point of view, it doesn't feel as if there is a clear consensus around the evidence of what works. Therefore, there is a slight danger at the moment that you could get commissioning that is a bit arbitrary and based on almost historical practice. Some probation and prison investment is still quite heavily loaded towards cognitive programmes, whereas the desistance theory, which is very compatible with the way in which voluntary sector services are delivered, is not entirely embraced by the whole of NOMS. You have this question of what evidence there is for what works and what counts, and shifting investment in the face of new evidence.

Q431  Mr Llwyd: Is there not also a problem that, if you have a very large commissioning area, it is going to be difficult to bid in order to provide for, let us say, certain forms of prevalent crime within inner city Liverpool and, say, rural Lancashire and rural north Wales?

Clive Martin: Yes, very much so, and in terms of different communities as well. You have parts of the country, for example, where the number of offenders from black and minority ethnic communities are disproportionately higher than others. You need very localised commissioning in order to meet the needs of those people to ensure safer resettlement. The closer you can get to the commissioning matching the needs of the local population, the better.

Q432  Mr Llwyd: A general question: what does the voluntary sector have to offer that the probation trusts currently do not have?

Rob Smith: It depends what the role of the probation trusts is going to be to a certain extent. In West Mercia, the YSS is a voluntary organisation that has a preferred partnership arrangement with the West Mercia Probation Trust. What it is asking us to concentrate on and what it feels our set of skills and abilities is about is offering that key relationship with individual offenders, which is different from the offender management role. The offender manager is almost distant doing that analysis and that case management role, whereas we will concentrate on doing that one-to-one relationship role, bringing local providers into that network of provision that we are developing. It is almost a split between offender management and offender interventions.

They recognise that other organisations are far better placed to deliver on offender interventions from the local community than probation trusts. We have seen a split there between the roles. They recognise we have a little more flexibility and freedom to operate. We can be more responsive to the needs and risks being posed by individual offenders. We are able to project-manage in a way that is different from probation trusts, particularly when we start talking about trying to thread together a whole range of different funding streams to be able to create new services and to innovate. They are the type of things that they have hallmarked as being unique about the voluntary sector locally.

Chris Wright: I don't think any sector owns the total knowledge about how to do things. Commissioning should be about creating an opportunity to bring in different delivery models and ideas. We are an organisation whose roots are in the founding of the Probation Service, back in the days of the London Police Court Mission. It has almost come full circle in a way. The important thing is to commission the right kind of services that are going to achieve the right kind of outcomes.

  In his evidence to you, Ian Poree talked about the Probation Service representing a national expertise around offender management and so forth. I think it is broader than that. There are lots of organisations that have an expertise and knowledge about how you can help and challenge offending behaviour. I believe commissioning provides an opportunity to bring some of that experience and talent to delivery.

Q433  Mr Llwyd: How would you respond to the notion that subjecting a large part of the probation trusts' work to competition risks fragmentation and ultimately the very future of the probation trusts themselves?

Clive Martin: That is a key issue at the moment. The market is fragmented. So long as we have services put out to competition on a discrete basis without anyone thinking about the process of how they are joined up for the person who is at the receiving end of them, we face a real danger of fragmentation, which is heightened by the fact that there is no common, usable IT system that can transfer records. It is almost like thinking about the NHS trying to work without patient notes. It is the equivalent in some way, because you have records about people, and their needs and services, held in different places. There is no common way of sharing that without some quite complicated to-ing and fro-ing of people.

You make a system more complicated for people who don't start in a positive place about the system's ability to meet their needs. You then make it more complicated for them to access that system. It is not a happy mix. That is where the voluntary sector helps, particularly in relation to things like mentoring and assisting in that joining up. It is interesting that the payment-by-results pilot in Peterborough prison is not so much about the provision of new services, but about the joining up of services for people who are on short-term sentences. There is some limited money to provide new services, but the bulk of the investment is around joining up and making the service a comprehensive whole.

  To touch on your previous question, the other issue about the voluntary sector is around public confidence. The public generally still trust charities and the voluntary sector more than they do others. When you have voluntary sector engagement, you have voluntary sector governance. You have volunteers. You have a huge group of the public who are able to get involved in the criminal justice system in that way. Public engagement in the criminal justice system is quite key to confidence in the criminal justice system. People do volunteer for probation trusts and things like that, but that has pretty much died off. Volunteers in probation services and prison services, by and large, come from the voluntary sector. YSS is a good example of where you have a local voluntary sector organisation. I think you still have some magistrates on your governing body. It is no surprise that it has been successful in the community because of the way in which there has been community confidence at all sorts of levels and what is delivered through that. That means community confidence in the criminal justice system. That is quite an important and distinctive role of the sector as well.

Q434  Mr Llwyd: You will know that the Government intend to publish a comprehensive competition strategy for prisons and probation in a month's time—in June 2011. What would you like to see in that strategy, apart from clarity?

Andrew Neilson: Detail.

Chris Wright: This issue around fragmentation is critical to that. The existing arrangements, as Clive indicated, are pretty fragmented. A large amount of activity that is required to address offending behaviour is outwith the budgets of probation trusts and/or NOMS. This is probably me being very tedious, but it is about commissioning. It is about making sure you have proper co-commissioning arrangements, where each and every agency that has a responsibility for services which can be directed at those who require them in order to address their issues is working collectively. The competition strategy cannot be seen in isolation from a whole range of other organisations that have a responsibility for commissioning services for those who offend. That is one point.

  We want to see something in the competition strategy that addresses some of the barriers to entry. I appreciate this is not necessarily a popular point. It is very difficult for us as a voluntary sector organisation to pick up so-called statutory work from the Probation Service because we can't handle some of the risk around public sector pensions and so forth. That acts as a major block for even decent-sized organisations. Smaller voluntary sector organisations will be able to pick up only the so-called "add ons", I guess. We have to deal with that around creating some kind of level playing-field.

  There are ways around it. I understand that the NHS pension scheme has something called NHS Directions that allows voluntary sector organisations to join. The ongoing liability of the pension fund is the responsibility of the NHS pension scheme itself and not the provider, whereas with the local government pension scheme, of which I believe the Probation Service staff are part, the responsibility for the pension pot transfers with the transferee to the provider. That creates a major block to the VCS.

Q435  Chair: Essentially, you can put the people who are employed in the schemes into the NHS pension scheme.

Chris Wright: You can, yes. For example, in substance misuse contracts funded through the NHS, yes, that can happen.

Q436  Chair: But you can't do that through a local government scheme.

Chris Wright: You can't do that in a local government or, indeed, a civil service pension scheme. It is a real challenge.

Q437  Chair: When that is the case, what do you do for your employees?

Chris Wright: You make a decision that you can't take the risk. You can't bear the risk and therefore you decide not to compete for the opportunity.

Q438  Chair: You are not in a position to offer them a job with contributions to a private pension scheme, and it is for them to decide whether that is an acceptable option for them.

Chris Wright: This is the pension code—I can't remember the exact title of it. It is not so much the issue of TUPE; it is to do with the pension code. You have to offer a broadly comparable pension to the pension that is being provided by the existing service delivery organisation. We are in a position where we can make the contributions—if the employer's contribution is 9% and the employee's contribution is 16%, that is fine—but it is the gap that grows in the fund which we can't carry the risk for. Unless we deal with this, the market will be open to large-scale private companies who are able to carry the risk, although they indeed will be quite concerned as well.

Q439  Chair: They are unlikely to offer the same provisions as the NHS.

Chris Wright: No, but they are more likely to be able to carry the risk of the gap in the pension pot at the end of a contract. If they lose the contract and it goes back to whoever, the gap in the pension fund is more likely to be covered by a large multinational organisation than it is by a mid or small-sized voluntary sector organisation. It is a risk that we cannot take and is a major block if you are going to take on services that are currently provided by existing public sector providers.

Rob Smith: Some of those contributions—I know you mentioned 16%—have been creeping up and up and up. Some recent examples were 25% and potentially heading to 30%. As a medium-sized local voluntary sector organisation, we have had to opt out of bidding for contracts at a local level. They are not huge contracts—about £200,000 a year—and well in our comfort zone. We have the competencies to undertake them but we cannot take the TUPE risk. We have not been able to bid for them, and much larger organisations have come in and won the contract almost unopposed in a number of cases.

  There are some interesting ways of possibly getting around some of these types of issues and the whole idea of this Total Place. Worcestershire has been a pilot for that, looking at co-location and secondment arrangements. There are different ways around it. At present in YSS we have seven or eight members of staff seconded for a particular project from the Probation Service. We are meeting the cost that we would normally meet for those individuals, but the costs over and above what we would normally expect to pay will be met by the probation trust. As and when those individuals leave, YSS will be in a position to be able to recruit those posts directly on our normal terms and conditions. There can be different ways of getting around and managing that, but it really does require you to do some fast thinking on the ground as quickly as possible.

Chris Wright: Absolutely. As Rob says, you can share risk, but you have to have the motivation from the commissioner to want to enter into those kinds of negotiations. Our experience in local government is that at the moment there is not much enthusiasm for some of the ideas that we have put forward.

Q440  Ben Gummer: Just to flesh out one point, because you were talking about the pensions and it not being an issue of TUPE, I have heard consistently from providers that TUPE is an issue as well as pensions. Can I get that as a confirmation from you or do you disagree with it?

Chris Wright: If we have a blanket argument that TUPE is a problem, I think it is elements within TUPE which are the issue. Within TUPE, there is flexibility around economic, technical and organisational reasons for changing the staffing structure. It is about whether the funding comes across to cover redundancies and so forth. I wouldn't say there are no problems with TUPE. I think the biggest barrier to entry is the public sector pension issue.

Q441  Ben Gummer: The thing that strikes me about this discussion, and it reflects the inadequacies in the MoJ's pilot projects so far, is that it is still built around our existing understanding of geographical commissioning. In fact, if we are going to try and look at this in its purist form, we should be commissioning by person at the nearest point to sentencing as possible. Geography ceases to matter at that point apart from the local provision of services, which would naturally flow from commissioning locally at the court or as close to the sentence as possible. As a preface to a question about the information provided that you would need to be able to bid successfully and the size of the commissioning unit itself, if I can put it inelegantly like that, how small could you bid for contracts? In the final event, could you get to a point where you are bidding a month after sentencing for individual customers to take them on through their offending rehabilitation journey from end to end?

Rob Smith: On a spot purchase, we haven't, no. On a small scale.

Chris Wright: It is scale; it is about quality as well. It is about how you ensure you have sufficient awareness of the money you are bringing in to make sure your staff are adequately trained to do the work that you require them to do. It is an issue of scale. Smaller organisations are still going to have their fixed costs to cover. It is how clever the commissioning arrangement can be which allows some funding up front to cover some of the fixed costs and have the availability there.

Q442  Ben Gummer: Do you have any idea of how large that cohort would be? I know it is an impossible question.

Rob Smith: It depends on the service.

Chris Wright: The idea of having that kind of very, very local commissioning would scare me. Having the right kind of capacity and resource available which is fit for purpose would be quite a challenge. There would be costs that you would be bearing which you might not be able to cover.

Andrew Neilson: The problem also with the criminal justice system is its focus on the individual with the term "offender management" and the management of individuals. A lot of the lessons from America and elsewhere recently, in the movement of justice reinvestment, show that place is important. It is just how big the place is and how you structure it. Two of the payment-by-results pilots are going to be local authority-based. Personally, I think they will be the most successful because of that. I wouldn't overly obsess about the individual. The system has struggled to do that. In the hypothetical situation that you are positing, we are very far away from having the infrastructure and ability to do that.

Q443  Ben Gummer: That is a very fair point. On that basis we can talk about the financing of this. Let us assume that you reach a point where there is a realistic group of people that you can bid for. I know it is the worry of smaller organisations that they won't be able to find the finance to pay for the PBR journey. The medium and larger-sized organisations that I have spoken to at least don't worry about that so much, but they are concerned about their interaction themselves with smaller organisations that they want to involve on a local level. How are you developing your thoughts about financing and your relationship with larger commissioners?

Rob Smith: I was just surprised by the comment of medium and larger-sized organisations not being concerned so much about the payment-by-results model, because it is absolutely critical. It means so many different things to different people and there are so many different versions of it out there. If you are talking about a payment-by-results contract where maybe 70% of the funding is potentially guaranteed subject to satisfactory performance, and then 30% is an element of outcome-based targets that have been agreed, perhaps in negotiations in the contract, a smaller and medium-sized organisation might be interested. If you are talking about a switching round of those ratios—and I am not speaking for your organisation, Chris—even for an organisation of your size that would be critical.

Chris Wright: It would. Working capital is a critical issue. We have a payment-by- results contract at the moment where we are trying to resettle young men coming out of prisons in and around London and get them into employment. The payment is based on sustainable employment and it is a challenge. On this particular contract, the funder paid an initial start-up fee that gave us the capacity to get going. In order to ensure that we cover our costs each month, we have to hit our targets and get people into employment. That is a risk we have to factor into our overall financial arrangements.

  We are the delivery partner for Serco at Doncaster prison. We will be running the PBR element of that contract, and Serco will be managing the cash flow, so working capital isn't going to be an issue there. Obviously, the issue for us will be in ensuring that we deliver the outcomes and do not expose ourselves to financial risk.

  In principle, I am very enthused about PBR. We enthusiastically welcome the idea that you are commissioned to deliver outcomes, as long as there is the corresponding relaxation around input control and so forth, but we have to deal with issues around working capital. The difference with the social impact bond, where the investors carry the risk around the funding, is, maybe, a way forward. You may ask questions later about the big society bank.

Q444  Ben Gummer: I am sorry; it is my fault for not explaining properly. You have just demonstrated my point. For an organisation that is set up to have those relationships, financing is possible, but for micro local organisations it is very frightening. There is not the infrastructure in place anyway to get working capital to bid for contracts of the kind you have at Doncaster and elsewhere. How do you see those relationships being managed, either with yourselves being prime contractors, or as small local organisations wanting to take on contracts themselves? It is not a very level playing field, is it?

Chris Wright: It is not a level playing field. I was just going to go on to say something about the big society bank. Will that provide an opportunity for providing capital for those small organisations? The mindset will have to change fundamentally.

Rob Smith: It is a complete culture change, yes.

Clive Martin: Both your questions are really interesting. In some ways it depends what is happening in a locality. For the spot purchase question, for example, if you take somewhere like Scarborough, where you probably have a number of voluntary sector organisations involved in getting people who aren't offenders into employment, and you have a fairly low number of offenders returning to Scarborough, you can perfectly imagine spot purchasing something from an established organisation, the bulk of whose business comes from elsewhere, to deal with this client group. If you are talking about some other areas of the country, where you don't have a local infrastructure already to spot purchase from, or you are talking about a service that is particularly needed, it becomes much more complicated. It slightly depends on what is happening locally.

  It is the same in some ways with payment by results. The social impact bond is interesting, where the risk is not with the deliverer but with the investor. It also depends on a number of fairly strong organisations within that locality who, at the moment, are not running by payment by results. They are running by a grant system, a contract system or whatever. At the moment, it seems that payment by results, in its transition stage at least, will probably have the best chances of success where there is quite a strong local mix of voluntary sector organisations that can sometimes pick up payment-by-results contracts and spot purchasing. If that is the totality of their funding mechanism, they will probably be in trouble.

Andrew Neilson: You have to recognise as well that social impact bonds and payment by results are two different things. Peterborough is doing something the statutory sector doesn't do. It is providing support to short-sentence prisoners when they leave. It is funded by social finance. Anecdotally, I have heard that almost all the social finance that is interested in criminal justice is currently sunk into this project in Peterborough. If we are talking about putting that to scale, where is that money going to come from? Peterborough is quite a long project. I don't think it is going to attract huge amounts of new social investment very quickly. The answer is that it is going to have to be private investment. If we are going to have some model where investment is put up front and the risk is not taken on by the provider, it will have to be private investment. Again, they will not take on huge risks.

Q445  Ben Gummer: I have one final question about inputs and outputs. You talk about reducing input controls from the commissioners. Could you say how far you would like that to go? In terms of outputs, should there be one output only—reoffending? You can judge how you wish to do that and leave that completely up to the provider.

Chris Wright: You need to have a minimum standard of expectation in terms of the service you are providing, and that needs to be specified. In terms of how you do it, if you are going to put yourself at risk around the contract, you need some flexibility about determining what kind of service you are going to provide. Hopefully, you will look to the evidence base to construct a service that is going to deliver the kind of outcomes the evidence suggests might be achievable. That is a big challenge around private investors. They will be looking very clearly at what the evidence base says before they are prepared to put up money in the hope of getting a return. Managing some public sector commission contracts is an experience to behold because of the micro-management and the almost total control that is placed on us. The smaller you are, the more control they try and impose; the bigger you are, the more you can fight back a little bit.

Q446  Ben Gummer: I am asking what controls are absolutely necessary over the kind of contract that we are envisaging. What would you pare it back to? Would it just be public safety?

Chris Wright: Absolutely. Obviously there is financial prudence and so forth, but it is not telling you how many times an offender needs to visit a probation officer, for example. That must be determined by risk and judgment. If the probation officer gets it wrong, there will be some kind of accountability built into that.

Andrew Neilson: Can I clarify whether you are asking if there are measures other than reoffending?

Q447  Ben Gummer: Yes, but that was the second question. You have dealt with inputs. I suppose you agree with that. In terms of outputs, should it be only reoffending, or should it be reoffending, job, home and health?

Clive Martin: My gut feeling about this is that you have to think about the offence. If, for example, it is a sexual offence, you definitely need the measure to be a binary one—they don't offend again and that is it. That is the reality of the situation and that is what we all want. The reality is that someone who is a persistent drug user is going to be a different situation that has to be dealt with. It is probably completely unrealistic and setting the situation up for failure if you go only for the reoffending measure in the first instance and don't do some intermediary measures such as registering with a GP and being on a drug treatment programme. I know it sounds a bit like fudging it, but it seems to me that only thinking about it in one way is probably not helpful. We probably need to think more about the offence, the evidence about how that offending is stopped and the public interests in that.

Q448  Ben Gummer: But that should be left up to you, not to the commissioner of the contract, shouldn't it? If it requires someone to get off drugs and not to reoffend, stopping them reoffending would be a function of the success that you have had in getting them home and off drugs.

Clive Martin: Yes.

Q449  Ben Gummer: That shouldn't be measured within the contract, should it?

Clive Martin: It might be in terms of being a different time period. It depends how long the time period is there and the timing of the point at which the measure is made.

Andrew Neilson: The one you would want to be wary of is public safety. Public perceptions of safety often have very little to do with crime in their actual local area. All you need is a big, lurid national story in the tabloids, and, if people are asked how safe they feel, they will say they don't feel very safe at all. That may have no bearing on how safe they actually are and how safe their neighbourhood is.

Q450  Mr Buckland: I want to come back to commissioning and look at the reality of the process. A defendant is convicted or pleads guilty. The probation officer who is given the job of writing the pre-sentence report really initiates the process in every case. They assess the offender and then they themselves look to see what options could be available to the court for sentencing. It starts from them, if you like. Mr Gummer's point about the individual is an important one because it does start from an individual basis.

  Taking that as the reality, could there be an analogy with the health service when it comes to commissioning? There could be local commissioning for high incidence outcomes such as community payback or probation supervision, for example, with weekly meetings and interviews or group sessions. There could be national commissioning for very low incidence cases: for example, an offender with very complex needs such as mental health and drugs. There may be a combination of various things; it may be a veteran. Could that be the way forward? There is a mixed picture when it comes to the commissioning of national and local.

Chris Wright: It is about the contracting arrangements you have in place. You may well have a framework-type contract with a range of providers available under the framework and you can draw down to respond to the specific requirements being sought. When trying to answer these hypothetical questions, my response is informed by the reality that we currently experience. You suddenly think, "How can that be achieved?", because it is quite complicated as it is. We have a whole lack of clarity around commissioning, as we have indicated already.

  The point you make is a good one. When magistrates or judges sentence, they read the pre-sentence report and are obviously influenced by its content and the proposal laid out. There is a sense of, "Right, yes, we need these kinds of interventions in order to mitigate the risk this particular person poses." Working back from there, there is a logic to it, but it is how you do it and the complexity of that. The point you make around more acute services being commissioned on a larger scale, maybe looking at a framework arrangement, could be a good way forward.

Andrew Neilson: The complexity is also beyond the criminal justice system. One of the problems in envisaging the ambition that the Government have around payment by results is seeing it across public services. If we talk about the individual, I like to think about "Bob". Bob is on a community sentence and it is payment by results. Bob doesn't have a job, so he is also on a payment-by-results scheme through the DWP. If he doesn't go on to reoffend, who is paying there? Is it the MoJ or is it the DWP? What if Bob was depressed and he was also on a payment-by-results scheme with the Department of Health? Who then pays? In fact, what if the reason that Bob did not reoffend has nothing to do with any of these people but that he found a good woman or he moved somewhere else? There is a danger that the Government double pays, triple pays or is paying for something that has nothing to do with them.

Rob Smith: He could also be on community payback but still be a high-risk offender and have a whole multitude of complex issues that need to be dealt with on a local basis. One of the things we have tried to provide to sentencers and offender managers in our innovative project in West Mercia is to develop a menu of provision for the offender managers. They will tick a tick-box based across the seven reducing reoffending pathways, based on the intensity and responsivity of an interventions programme and what it needs to look like. We try to align resources locally to be able to meet that. Sometimes that is about influencing local commissioners; it is about drawing down funding ourselves; it is about using probation resources. The idea of creating a menu that works across all of the needs of an individual and tailoring it around them is what we are trying to provide locally.

Q451  Mr Buckland: It is also emphasising the fact that it is not just a responsibility for the Probation Service but there are other agencies and departments that need to be involved.

Rob Smith: Absolutely, yes.

Q452  Mr Buckland: I want to ask you about capacity. I think we touched on it fairly substantially in some other questions. Obviously we have had an economic downturn. Do you think that has had an impact on the existing voluntary and charitable providers in terms of the potential market that is out there for this provision? Has the downturn had a negative impact on the range of providers?

Clive Martin: We have just surveyed our members. There are some stark figures in that. Over 60% of them are currently using free reserves to support front-line delivery. That is a fairly dramatic situation for a voluntary sector agency to be in because free reserves are quite precious things. The Charity Commission has some quite strong guidance about that. About the same number of people are on redundancy notices and, at the same time, we are expecting an increase in demand. You have all these internal pressures going on and you have an increase in demand. It is a combination of the reality of what is happening now and the fear of what might happen. Those two things are going on at the same time. Combined with that, there is a lot of fluidity in the statutory services themselves, feeding the uncertainty—people they may have dealt with in the MoJ or whatever it is. It is quite dramatic how rapidly that is changing. There is both the financial impact on the operational viability and also the restructuring of organisations that is going on. Yes, it is a big issue.

Q453  Chair: Mr Neilson was rather pessimistic earlier about the potential for more finance coming from social impact bonds. We have had at least one witness who was quite optimistic about that. Prima facie, if more people were aware that this was a developing possibility and if they saw more examples of it, it seems to me fairly likely that there would be more people who would want to engage in some kind of positive ethical investment and might come into this field.

Andrew Neilson: But not necessarily in criminal justice. There are all sorts of areas where social impact bonds could flourish. What we have found, at least in terms of voluntary donations from the public, is that the criminal justice sector doesn't attract that much interest. There are more appealing groups that receive voluntary income. That could—who knows?—be reflected in social finance.

Peterborough is a six-year project, and if we are talking about the effects of the downturn, the Ministry of Justice is engaged in 6% budget cuts year on year right now for the next four years. Payment by results will not be able to prove itself in that time frame. So what happens? In the end it comes back to a favourite of the Howard League, which is that you cannot talk about criminal justice without going back to law, policy and attitudes. How many people are actually in the system and should all those people be in prison or even in contact with the Probation Service? That is going to become more and more urgent to consider when you do have lowering budgets and yet the numbers are staying high. Payment by results is not going to reduce those numbers any time soon.

Rob Smith: In terms of the social impact bond, we have been doing some work trying to develop a project region for the last two years. The scale you have to get to in order to make the cashable savings for the Treasury appears so large and is very difficult to overcome. Agreeing a set of metrics to a more rigorous standard that had probably been initially worked out for the Peterborough model is making it impossible to develop anything at present.

Andrew Neilson: I know you had previous evidence from people involved in the Work and Pensions programmes. They took 15 years to come up with what they felt was a robust metrics. We won't have 15 years to do it in Justice.

Clive Martin: For social financial investment, the key place it works is where the social cost of something not happening is very high and the level of investment you need to correct that is relatively low. In Peterborough, there has been a high social cost of people coming out of prison unsupervised and a relative investment to achieve a change in that, so the savings are quite remarkable. There is this ratio between the cost of the investment and the savings it generates.

You can see that working in some other parts of the criminal justice system if you look at statutory refinancing. You can see local authorities wanting to invest in keeping young people or women out of prison because the social impact cost is so much higher. Outside that it is quite limited. In some ways, you could imagine that insurance companies would have a vested interest in trying to bring down rates of burglary because they pay out on it and therefore their cost is high. Taking the model of car crime, it wasn't solved by the Probation Service or anyone else; it was solved by the manufacturers.

Where are the opportunities to get private company investment where they are currently experiencing high costs and a low investment rate would bring that down? That is where some of the interesting thinking could go on about it. Without that, it is quite difficult to see where it would happen. The thinking at the moment is that the investment has mainly been through trust funds, the Big Lottery fund and others. The return is quite high—it is 7% or something—if it works. The risk is still high for anyone else, so the market is quite sceptical because of the risk. In the long term, it might well play out as different players come in, but at the moment it feels like it is still too risky an investment to think of the whole sector being funded in that way.

Q454  Chris Evans: I want to talk about community engagement and service user involvement. Last Friday I had someone come to see me who worked on a drug rehabilitation project. What he found was that people were given drug rehabilitation orders, completing them and then going to voluntary detox. What was happening was that these people lived very chaotic lives and they were disappearing. They would appear again only once they were in the criminal justice system. He found that these people would come through the criminal justice system six or seven times. The point that he was making was that nobody had ever asked the offender and those who worked with former offenders what could be done to improve this. What does NOMS do to listen to ex-offenders and work on actively engaging them in the process? Can you give any examples of when policy has been changed through speaking to ex-offenders?

Andrew Neilson: It is more common in the youth justice sector. The youth participation agenda is starting to hit youth justice. The Howard League runs a lottery-funded project around that. We would hope that that would start to bear fruit in terms of young people saying something and then it reflecting policy. Within the adult sector it is fairly limited.

Chris Wright: There is evidence that co-design is a very effective way of achieving programmes that are going to have an impact. Going back to commissioning, you have to ensure that you commission the right kind of services. Commissioning itself can be influenced by those who are about to benefit from the services. It is a mindset thing. Andrew is right: it is very common in the youth sector. Much of our activity is in the youth sector. Participation of the young people we work with is absolutely critical to what we do. The views of young people in custody have just been surveyed by the Youth Justice Board. We need to translate that from the youth sector into the adult sector because there is very strong evidence that engagement is a powerful way of addressing offending behaviour. Desistance theory points to offenders who have made a decision not to offend any more. They point to the things in their lives that have helped them make that decision by putting something back into the communities in which they live. There is a strong evidential basis behind this.

Clive Martin: We published a report on it a couple of years ago.

Q455  Chris Evans: That is what I want to come to next. Could I ask you a question just to guide your comments a little bit? I haven't read the report but I have some key elements of the report in front of me: personalisation, influence, ownership, responsibility and expertise. I want to focus your comments more than anything on this: coming from a base where there doesn't seem to be much offender involvement, how would we formulate policies and guidelines that encompass all the aims that you include in the report?

Clive Martin: There is some engagement. The field is changing rapidly. There is an acknowledgment now that we need to engage sensibly with offenders' views. In some prison establishments it happens. There are prisoner councils. They have various roles, ranging from peer mentoring-type roles to much more engagement around food, visiting hours and things like that. It seems to me that we need to have direct discussions with offenders around policy issues.

All sorts of work has gone on around peer mentoring, all of which is good. That needs to happen with an idea of what makes sense in terms of how you influence policy and how you sequence events in an offender's life in order to change things round. Things like sending someone on a drugs treatment programme when their preoccupation is getting in touch with their children, and acknowledging that as being a genuine issue, need to be reconsidered. There is also the idea of prioritising resources so that an offender is enabled to express what they think might make the most difference to their lives in terms of reducing their reoffending rather than what is available in terms of a programme.

  It needs a systematic engagement. There are problems with it. Some probation trusts, for example, have experimented with having an offender on the board. That is quite complicated because they have different powers from the other members of that board and so on—they don't have the same legal responsibilities. NOMS is moving to a position where it is trying to understand how it can set up a direct dialogue with offenders. It is quite a skilled role from an offender's point of view, so there needs to be some training and support for that. People are also speaking specifically around the issue that affects them rather than a more generic, "Let's talk to an offender about what their experience was of being in prison." That is not the point. The point is, "What would be your guidance around how the service should be designed for drugs?", if you are a drug person, and so on.

  That is our thinking on it. The reason for that is we think that there is no real public service that has transformed itself without engagement with service users. If you go to a Mind conference now, you will find that 70% of the delegates are ex-users. Service users have transformed service provision. That is why, in our view, it is so crucial.

Q456  Chris Evans: What type of offenders are you talking about when you are engaging with them? When I was speaking to this chap—and we had a very interesting conversation—he said that, particularly with drug offenders, he found that they could stay clean for six months but then all of a sudden hit a brick wall and their life descended back into chaos. He said that the major problem with designing anything was that they live very chaotic lives of which many of us don't have any concept. We get up in the morning and go to work, whereas these people have no concept of that. When you are talking about offenders you are working with, which ones are you mainly thinking about?

Clive Martin: Rob might want to say something about this but, for us, it is across the board. It is a complicated thing. It is quite difficult to engage in because it is a label that people often want to move on from. There is this thing about who you engage with, which immediately means a self-selecting group. In our mind, you don't have to be too fussy about who you engage with. People's views are important, as are their families' views. Families' views are largely untapped as a resource at all. In many cases, the reality of it is that families are the effective offender managers. For us, it would be open as to who we engage with.

Andrew Neilson: There could also be some service user involvement at the point of sentencing with the magistracy. We have talked about problem-solving justice, which is a concept that comes from the United States. The principles of problem-solving justice are that the sentencers engage the offender before them to try to work out what the best intervention is going to be, even at that very beginning point at court. That is of interest and should be explored, although the magistracy obviously has some issues about whether or not that interferes with their concept of judicial independence.

Rob Smith: There are service user frameworks out there. Local authorities particularly, in a lot of the contracts that we have, have it as part of their strategic agenda. They will commission us, and in that contract it will require us to have a service user involvement strategy and to provide feedback on an ongoing regular basis, which feeds into the design of our services. It should be, right from the start, in the commissioning process.

Chris Wright: It happens at a number of different levels. It is about the engagement in the first place. When you are working with somebody, you are not doing it to them—you are doing it with them. You are working alongside them and getting them to engage in what is happening around them. That is the issue. The vast majority of offenders are chaotic.

Q457  Chris Evans: It has been very worth while hearing from you this morning and it is all warm words when we are sitting here, but the huge issue that we are now facing is nimbyism or the rise of nimbyism. When you talk about community engagement and community rehabilitation, I can think of several examples—even from before I became a Member of Parliament—where there was strong local opposition to any form of rehabilitation projects or any form of community engagement. How can we overcome this rise of nimbyism that has come about in the past 10 or 15 years?

Chris Wright: I don't necessarily share a negative view. A lot of people in the community want to provide support and assistance to people who, within their communities, might be causing difficulties. Some 10 years ago I was involved in the roll-out of the referral order in the youth justice system, which required a recruitment campaign of volunteers who would be involved in making decisions around what activities young people would be required to undertake as part of a referral order. This was in Nottingham. We were inundated with requests from the community to participate in that. They were not from people who had a particular punitive response, but from people who wanted to make a contribution. Part of our working methodology at Catch22 is around volunteering. We don't have a problem in attracting volunteers. Of course there will always be some people who have very negative views.

Q458  Chris Evans: They are usually the loudest voices and they are usually on the front of the paper.

Chris Wright: But you can find mechanisms for engaging people. There is an issue around democratic accountability as well. What the referral order did was to identify the failings of the statutory services to be delivering the kind of interventions which might have prevented young people from ending up in the position they were in in the first place. We have to approach it from a very positive point of view. There are people out there who want to make a contribution. There will always be people who say, "I don't want a bail hostel in my back garden." But the reality is that there are a lot of people—and historically this has been the case—who also want to manage and contribute to their community and make it a safe place to live.

Rob Smith: I don't think probation is very good at marketing and communications in terms of the effectiveness of what it does. There are some really good projects, particularly about community payback. The Probation Service feels very opaque to members of the public. They don't really understand what it is and how it operates. Myths and urban stories are in place and you really have to work hard to overcome them. When you get the opportunity to sit down with people to explain, usually you get a very good reaction.

Clive Martin: I have to say that in the 12 years I have been doing this job, in countless number of churches, local community groups and chambers of commerce—when it is done in a structured way and you invariably have an offender with you and you talk to people—I have never experienced that it ends up in a negative place. It happens when you are fire-fighting: when someone wants to build a sex offender hostel, it has been sprung on a community and they haven't heard about it. It happens then but, otherwise, in terms of a structured discussion, my gut sense is that there is still a huge amount of public opinion that is about wanting to do something positive in a managed and structured way. We do our communities a disservice by just being panicked by that one presentation of it. I am still amazed that when you go out and engage with people that is generally the response.

Chair: We will have to stop there because we have run out of time and we have a private session after this one. I thank you all very much for bringing your experience to the witness table. It has been very helpful to us. Thank you.

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Prepared 27 July 2011