Examination of Witnesses (Question Numbers
592-646)
Jane Coyle, Roger Hill and Peter Neden
7 June 2011
Q592 Chair: Welcome,
Mr Neden, Mr Hill and Ms Coyle. Mr Neden, you are from what
I still think of as Group 4 Securicor—G4S, I believe it
is now.
Peter Neden: I
think that is right, yes.
Q593 Chair: Mr
Hill from Sodexo and Ms Coyle from Blue Bay Support Services.
Jane Coyle: That
is correct.
Chair: We are very glad
to have you with us. I am going to invite Elizabeth Truss to open
the questioning.
Q594 Elizabeth Truss:
Thank you. I want to start off by talking about the creation of
NOMS and the governance arrangements of probation. If you look
internationally, there seems to be much more integration of the
Prison and Probation Service. Although nominally we have NOMS,
underneath that you still have the structures of Prison and Probation.
Do you think that adds to cost in the system and also does it
make it hard to provide integrated delivery?
Roger Hill: Would
you like me to start?
Elizabeth Truss: Yes.
Roger Hill: You
will know from my work history that I have gone through every
iteration of NOMS. I would say that the current iteration is quite
effective in terms of providing governance for the whole system.
As I see it, essentially the NOMS agency is a commissioning body
that sits above a range of providers. There are 35 probation trusts
in there, each of which is an independent provider. There are
some private sector prisons, some public sector prisons and other
providers providing other services. I think that has the potential
to be both costeffective and effective in terms of improving
services.
Q595 Elizabeth Truss:
Can I just ask the others specifically on this division between
the Probation and Prison Services, and we have heard in previous
evidence sessions that there is a different culture within those
organisations? We have just heard in fact from the Local Government
Association that the way the prisons work is not necessarily integrated
with probation at a local level.
Jane Coyle: We
are a very niche company. Our experience is going to be limited.
However, the experience that we have found is that we don't feel
there is the same sort of will to diversify the market in the
Probation Service as there is in the Prison Service. There was
a formal tenderingout process, for example, at HMP Birmingham.
That doesn't seem to be happening in the Probation Service. That
may hinder things. It is certainly hindering things for a small
company who is trying to offer services to prisons or probation
services. We have been offering services in the prisons. We have
been offering presentence reports; we have been offering
SARN reports.
Chair: Would you speak
up, please, because the acoustics are not very good in here?
Jane Coyle: I am
sorry. Yes, we have been offering all different types of reports
to the prisons and probation services. They have been taken up
on an ad hoc basis, but when we have tried to offer more formal
contracted work to the prisons, they seem to have been quite reluctant
to use services other than probation trusts. They haven't wanted,
in our experience, to think out of the box and use any other providers.
We feel that the probation trusts as providers in the prisons
have been effectively protected and that has made it difficult
for small businesses.
Q596 Elizabeth Truss:
Mr Neden, do you find that to be true and do you think there is
a conflict of interest between the provider and commission role
that the probation trusts have?
Peter Neden: Perhaps
I can answer that question in a slightly different way. The creation
of NOMS goes back to 2003 and the idea was to bring the Probation
and Prison Services together. Since that time, we have had two
separate organisations that have very different structures. The
Prison Service is a very centralised structure, whereas probation
services are in over 40 different structures. We think inevitably
that leads to additional cost and it must be very difficult to
manage that as an organisation. In terms of Roger's observation,
I think in the last couple of years we have started to see more
coherence, but that has been a very long time coming, in our view.
In terms of the conflict of interest, there does need to be greater
clarity between the commissioner and the provider, and, at the
moment, with probation trusts as commissioners and providers,
I do not think we are there yet.
Q597 Elizabeth Truss:
Having regard to the way we were talking about it in the previous
session with offenders being given sentences, do you think there
is a continuum, or there should be a continuum, between various
types of sentences: the custodial and noncustodial community
sentences? Do you feel that continuum gets broken by the different
cultures?
Peter Neden: I
think it can do. I think inevitably it is more difficult.
Q598 Elizabeth Truss:
How would you see it working in the best-case scenario? Are there
examples that you can point to where the Prison Service has integrated
with Probation and works effectively at providing a sort of endtoend
offender management solution?
Roger Hill: I think
I agree with the premise you have just put forward and that integration
does boil down to how you commission services and not to the organisational
state of the different providers. The logic of your question really
is that you then commission around either a locality or a group
of offenders. My colleagues may correct me, but I am not aware
of any particularly strong examples of that. There are some ad
hoc examples. For example, the Social Impact Bond at Peterborough
Prison is one option, and I am sure we will talk more about that
this morning. In my previous role as director of offender management
for the south-east, certainly an initiative around integrated
offender management, which was the under 12-month prisoner group
exclusively, getting the Prison and the Probation Service to work
together, was a significant task for me, but I do not think that
has been done to scale and I think it is an opportunity missed.
Q599 Elizabeth Truss:
You have just talked about UK experiences. Are there any experiences
elsewhere of commissioning both prison services and probation
services together?
Jane Coyle: I am
not aware of any, no.
Peter Neden: Not
that we are directly involved in.
Q600 Chair: It
is our job to find out, so we will.
Roger Hill: I think
there are, but I don't know of them.
Elizabeth Truss: I think
there are as well, but it would be good to have more detail on
that.
Q601 Chair: I
think, Blue Bay, you said in your submission that there are "structural
barriers" in place within the criminal justice sector "that
actually prohibit the promotion of costeffectiveness"
and that the sector is "institutionally anticompetitive".
Jane Coyle: We
did say that, yes. Our experiences are mainly anecdotal because
we are working from the bottom up and so they are the experiences
that we have found. Over a period of five years we have been constantly
knocking on the doors of probation services and probation trusts.
We have written to NOMS. NOMS told us to write to DOMs. DOMs told
us to write to the trusts. We wrote to the trusts and this is
annually, I hasten to add—we have done this every year—and
our experience has been that the trust hasn't generally got back
to us. Why this is I don't know, but we can only surmise that
there is a form of protectionism within the trusts and they don't
want other services to do this kind of work. It makes me wonder
what their incentives are for others to do this kind of work.
Why do they need to bother to get other people to do the work?
I don't know. All we know is that there has been an awful
lot of rhetoric. We have heard what people have said. It's
great for small businesses like us, but in practical terms this
has not really come to fruition. So we do feel that we have sort
of reached a glass ceiling when it comes to probation trusts.
Q602 Chair: Is
that a picture which anybody else finds?
Peter Neden: I
think we would say progress has been disappointing since 2004
when contestability and market testing was put at the heart of
the Carter Review.
Q603 Chair: What
has been the consequence of removing the regional tier of NOMS
for regional-based commissioning?
Roger Hill: Just
to add to the last question, Chair, it is my view that that is
a problem. I think the removal of the regional tier, frankly,
makes little difference, although I was very much part of that
regional tier. What matters is a construct that is based on a
belief that a range of providers is a good thing for the system.
I think the Probation Service are quite frightened of competition
and, although they may describe a view that is similar to what
I have just said, they don't really mean it. So long as we ask
the system to reform itself, in my view, that reform is unlikely
to happen. If I could give an example of the Community Payback
competition, from the perspective of probation trusts, that, I
think, was an extremely unwelcome decision, but, once the decision
was made, the vigour and the ingenuity with which the probation
trusts have begun to enter that process is positive. My own organisation
is a framework provider for Community Payback and we hope we will
win some of that work. But I think it is a reasonable assumption
that, having put that work in the marketplace, in the very near
future there will be a range of providers delivering those Community
Payback arrangements and you will have the opportunity as Government
to look at the different outcomes achieved by different providers.
Q604 Chris Evans:
I want to start with a straightforward question. What does the
private sector have to offer that probation trusts currently do
not provide?
Peter Neden: Can
I make a suggestion that I think it is more the answer Roger has
just given? It isn't the private sector per se that has something
to offer. It is that a market that leads to a mixed economy has
something to offer and that, over time, having a diversity of
providers will lead to innovation that can either be a better
service or more efficiency or lower cost or some mix of those
things. It is the ongoing effectiveness of the market in competition
that drives that. The players that win in that market will just
be the players that the commissioners choose. I would hope that
the private sector would be successful in a market like that.
I am sure the private sector has something to offer. But it is
not just about the private sector. I think it is about the market
that is established, and that is a longer-term goal.
Q605 Chris Evans:
How are you going to establish a market when there is a monopoly
in place?
Peter Neden: I
think that is the role of the commissioners.
Q606 Chris Evans:
How are you going to break up the monopoly of the Probation Service
provider at the moment when there is no market there at the moment?
You are just creating a false market. Also, based on your point
as well, how can you guarantee an efficiency or innovation in
providing probation services?
Peter Neden: I
think we can influence the creation of markets, but in all Government
services it is up to our client to decide they would like to have
a mixed economy. Could you just remind me of your second question?
Q607 Chris Evans:
What was my second question? I was saying that there is a monopoly
there at the moment. How do you envisage that postmonopoly
then, basically? How do you envisage the market developing in
the delivery of probation services?
Peter Neden: The
market would develop by commissioning a range of different services,
which could be Community Payback. It could be other interventions
such as drug treatment programmes. It could be offender management
services, although I recognise that, particularly with the prolific
and more dangerous offenders, that would be difficult perhaps
for us reputationally and possibly difficult in terms of appropriateness.
Q608 Chris Evans:
My major concern about this is that in any market there has to
be some level of competition. How are you going to introduce competition
between providers if you are just awarding a contract, if you
see what I mean? When you are awarding that contract, you are
awarding a monopoly to that company for x amount of years.
How do you introduce competition into the market?
Jane Coyle: Could
I answer that question? We have had direct experience of answering
a formal tendering process. This is at the Lancashire Probation
Trust. This is an example of a very good working relationship;
so it has not all been negative. They put this process out. We
completed a tender. We submitted that tender. There were obviously
others going for that tender. We were successful and we won that
tender. We won it because we have demonstrated that we are good
at what we do and we can provide costeffectiveness. The
difficulty is that other trusts are engaging with our services
on a very ad hoc basis. That cannot promote any form of competition
when it is on such an ad hoc basis. It has to be a formally set-out
tendering process, which Lancashire have done. They have done
it. Why can't other probation trusts do it? There is no formal
or consistent process that is going on throughout the service.
It seems completely arbitrary.
Q609 Chris Evans:
How would you introduce the consistency that you have seen in
Lancashire at the moment across the board? How would you suggest
that is rolled out by Government then?
Jane Coyle: I am
not an expert in deciding how those kinds of things come about.
Q610 Chris Evans:
What is the best feature of Lancashire compared to your experiences
with other probation trusts?
Jane Coyle: Well,
if Lancashire can do it, why can't another probation trust do
it? Why can't they tender out different processes—different
parts of offender management? Ours is presentence report
writing skills services. There are many different parts of the
offender management model that could be tendered out. We are probation
officers. We have the skill to do it, but we can do it cheaper.
Roger Hill: You
are describing a commissioning problem. The reason that there
isn't a market and there isn't active competition is because the
commissioners are not putting work to the market. It is providers
and, as providers, we can influence that and we do it on a weekly,
sometimes daily, basis. We are very keen to compete amongst ourselves
and with the public sector. But until the commissioning decision
is made, rather like the example I gave of Community Payback—and
they are difficult decisions to make; I know they are because
I have been on that side of the fence—there is any number
of views as to why you shouldn't do it or, if you have to do it,
why you shouldn't do it now. Those decisions have to be the first
ones. Once you start to make them and become more confident, and
NOMS becomes more confident as a commissioner, and I think it
will under this new construct, then that market will develop.
That is how markets do develop.
Jane Coyle: But
this does seem to have been in place for a while, though. That
is why we are here now because nothing seems to be done. All the
rhetoric is there, but there has been no meaningful action, as
far as I can see.
Roger Hill: That
may be true and I am probably asserting that it will develop a
little more confidently than perhaps I should. I do have some
confidence in the new model of NOMS which came into place a few
months ago.
Q611 Chair: What
do you mean by the "new model"?
Roger Hill: The
move away from regions. So the centralised model—
Q612 Chair: This
is seen as problematic by quite a lot of people because the Community
Payback commissioning system is based on fairly arbitrary areas
which are not the same as areas used for a variety of other purposes.
There is none of the coterminosity which we were hearing
about earlier and which is thought by some of the smaller, not-for-
profit organisations to be too large then to be contracted to.
Roger Hill: If
I can comment on that, the issue of the size of the Community
Payback lots is seen to somehow indicate that because they are
large they cannot deliver locally. I don't agree. To create an
operational model to ensure delivery, you can very easily build
in locality. The councillor who was on your previous panel talked
about a wish to join a local criminal justice board. I believe
he was from West Yorkshire. That is about localism. How you construct
the Community Payback lots to ensure that you get efficiency into
the scale of what you are offering doesn't for a moment mean that
you don't expect us as providers to build in local decisionmaking
into Community Payback as a delivery. I don't believe those two
things are a poor fit with one another. Quite the contrary: I
should think they will fit together quite well.
Peter Neden: I
think there is some good evidence of that in the electronic monitoring
contracts that are effectively let nationally, but there are obligations
on the providers to deal locally with police, youth offending
teams, criminal justice boards, local magistrates and so on.
Q613 Elizabeth Truss:
If it was sliced up in a different way, so it was by a group of
offenders or locality, then presumably that Community Payback
lot would be put with other services so that it could be done
more locally. Because all the things are being sliced up into
categories at a national level, to make it efficient you have
to do it over a larger area.
Roger Hill: I think
it boils down to choices actually. It goes back to how the commissioners
decide to construct the market. What they have done so far, you
are quite right, is to take a lateral slice through the market
and say, "We will put this theme of Community Payback out
there and see who can deliver it more effectively and efficiently."
I think the only other way you can do it is to take a locality.
So you take a place like—
Elizabeth Truss: Vertical
slicing.
Roger Hill: Yes,
vertical slices such as Bolton or Brighton or something, and you
say, "For the whole package of services in that locality,
can you deliver a better service?" It is probably the case
that the vertical slicing, which links quite strongly back to
Patrick Carter's original model of offender management and following
the individual through the system, makes, in my view anyway, for
a more effective approach.
Q614 Chris Evans:
I just want to finish my final question. The Government intends
to publish a comprehensive competition strategy for prisons and
probation in June 2011—this month. What discussions have
you had with the MoJ and NOMS about what you would like to see
in that strategy? That is to all of you.
Peter Neden: We
have put our arguments reasonably consistently over the previous
five years. We see that the private sector has a useful role in
the delivery of justice.
Q615 Chris Evans:
But have you spoken to the MoJ or NOMS about what you want to
see in that?
Peter Neden: Yes,
at many levels, with Ian Poree and Michael Spurr, indeed.
Roger Hill: We
have too, and we have also responded to the Green Paper. We would
like to see the development of a market in the community. Sodexo
employ me to be in a position to respond to that. We would like
to see the continuing competition of public sector prisons and
we would like to be part of constructing how payment by results,
localitybased commissioning, placebased budgets and
all of that develops, because we take the view that there isn't
a straightforward simple answer as to how to do that. It requires
a lot of thought and a lot of discussion and we would like to
be part of it.
Jane Coyle: Ceaselessly.
I think I have probably explained that. We have not stopped knocking
on doors and writing to people explaining that we can offer a
very high quality service a lot cheaper. It is frustrating when
those examples are ignored and trusts are continuing to employ
employment agencies to do the work that we can do a lot cheaper.
Chris Evans: I noticed
that earlier in your response, yes.
Q616 Mr Buckland:
We started talking about payment by results. We know in other
areas of Government that already exists. For example, payment
by results has been used by the Department for Work and Pensions
and the Department of Health. What lessons do you think can be
learned from the experience with those Departments with regard
to delivering payment by results in the context of criminal justice?
That is a question to each of you.
Peter Neden: I
can speak for the DWP because we are involved in that. I am not
so familiar with Health. I think the first thing is that the answer
isn't obvious and immediate. It might be a simple concept, but
delivering it in reality is quite complex. The second point I
would make is that it is not all or nothing. We haven't gone from
a world where people are just paid money for trying to do things
to a world where we are only going to be paid for outcomes. There
is a transition period that allows us as providers to become more
confident about the payment-by-results system and to build the
evidence base that is in the interests of both our clients and
us as providers to be able to make those steps.
The third point I would make is that there are lots
of different ways of doing this. When we think about that in relation
to criminal justice, softer measures may also be helpful. It could
be that completion of programmes is akin to output, even if it
is not as good as ultimate reoffending rate. But it may at least
be achievable, and we shouldn't make the ideal the enemy of the
good as we walk down this journey in criminal justice. There is
a lot that could be done there.
Q617 Mr Buckland:
Do you think there need to be more tests than just reducing the
rate of reoffending—that there needs to be a more subtle
approach?
Peter Neden: I
think it might need to be more subtle and more nuanced, particularly
as the evidence base just is not there at the moment.
Roger Hill: I don't
know a great deal about Health or DWP. I would make two comments.
First of all, the extent to which you can use a payment-by-results
mechanism to be cashreleasing is more straightforward, I
believe, in DWP than it is in criminal justice. For example, if
you get somebody into work and they stop claiming benefit, you
have instant cash release. If you get somebody on to a sentence
in the community who does not use a prison place, that is not
instantly cashreleasing. There is that complexity built
around the criminal justice side of it.
Jeremy Corbyn: Well, it
is cash-releasing actually. It costs less.
Q618 Mrs Grant:
Somebody gave evidence earlier saying that, if somebody goes to
prison, the average cost is about £55,000 a year. That cost
is triggered from the moment they go through those gates.
Roger Hill: That
is right.
Q619 Mrs Grant:
I don't see the question—
Roger Hill: There
are a lot of fixed costs in having the cell, whether somebody
is in it or not. You can't simply stop funding the cell. That
is the point.
Q620 Mrs Grant:
But, as soon as they are in and eating food and requiring attention,
that £57,000 is clocking up, isn't it?
Roger Hill: Yes.
Q621 Mrs Grant:
So why are you saying there can be no real equation in terms of
results?
Roger Hill: I am
saying when somebody stops claiming benefit because they have
found a job—
Mrs Grant: I have got
that bit.
Roger Hill: —there
is no other cost attached to that, so that releases the cash.
When somebody doesn't use a prison cell, you still have the fixed
costs of the prison cell. You are right: you don't pay for their
food. The variable costs reduce very slightly. But you still pay
for the fixed resource, which is the prison.
Q622 Ben Gummer:
Until you get enough people to close down the site.
Roger Hill: That
is right. The cashreleasing mechanism, whilst ultimately
there, is slower and more difficult.
Q623 Mrs Grant:
But it can be calculated, obviously, because there is not a human
body requiring attention going through the gate, is there? There
isn't, is there?
Roger Hill: The
variable cost can be calculated because there isn't a person in
the cell, but the cost of having the prison remains a fixed cost.
Mrs Grant: Of course.
Q624 Chair: Until
you get to the point where you have reduced the demand and you
don't need that prison.
Roger Hill: Absolutely,
yes. They are simply more difficult steps along the journey. It
is the same journey ultimately, but there are some quite significantly
more difficult barriers within it. That is my first point. Secondly,
you need to be absolutely clear what the result is that you are
trying to purchase. The outcome results of somebody in employment
and rather less outcome results, I think, in health of whether
somebody got better are slightly—well, you need to clarify
those. In a payment-by-results mechanism, you have to be clear
about what the result is that you are trying to buy. Are you trying
to buy the fact that somebody offends less, or are you trying
to buy the fact that somebody completed the sentence that the
court imposed, for example? They are two issues that you need
to differentiate within a PbR model.
Q625 Mr Buckland:
Wouldn't another issue be the cause of the improvement? Sometimes
it is difficult to work out precisely why it is that somebody
stops reoffending.
Roger Hill: Absolutely,
yes. You are stealing my third point.
Mr Buckland: I am sorry.
I am speeding things up.
Roger Hill: The
cause and effect argument is absolutely enormous, as you say.
But in a sense that doesn't really matter to the purchaser if
you are clear about what the result is that you are buying because
you transfer the risk at the point that you do that to the provider.
Q626 Mr Buckland:
Of course we could argue that it is a bit of a red herring and
we don't need to get so hung up about it.
Roger Hill: Absolutely.
Jane Coyle: We
have no real experience of the DWP or Health Service models, but
the point that we have to offer is that payment by results can
lead to improvements because we are evidence of that. We are effectively
paid by results. If we don't produce presentence reports
to the courts that have gone through the quality assurance process,
we won't get paid. Every time the court uses us to produce a presentence
report, the probation trust saves itself, to be precise, £59.
That is another way of looking at it, but that is a payment by
result. We think that for small businesses payment by results
might be quite difficult to manage. I agree with what Roger is
saying in that it depends what your outcomes are. Again for small
companies, if it was reoffending, it would be very difficult for
us to manage.
We have recently created an elearning programme
for male perpetrators of domestic violence. How would we manage
that by payment by results? Would it be that in two years' time,
if they reoffended, we would have to give some money back or we
would only get a certain percentage of what we were going to get?
It would be quite difficult for a small business. It would be
easier for a large company to manage payment by results. The other
point I would like to make about payment by results is that, maybe,
that is something that could be given to the trusts to consider.
As an incentive for probation trusts, they could be paid by results.
Q627 Chair: Can
I just go back to something you raised earlier in the light of
what you have just said? You are a relatively small company.
Jane Coyle: We
are, yes.
Q628 Chair: You
have had difficulties, which you describe, but they seem to be
much more difficulties of lack of interest or response from trusts.
Jane Coyle: Yes.
Q629 Chair: Have
you been in situations where the basic structure of a contract
which you could fulfil your part of was denied to you just simply
because of the way the contract had been set up? It was designed
in a way which would not enable a small provider to bid.
Jane Coyle: Yes.
It is a very interesting point because it has hindered us. We
know where there are good staff. They are employed by probation
trusts at the moment. We need proper contracts to give those staff
job security. We have found that we have been offered shortterm
contracts—three-month contracts, for example.
Q630 Chair: Isn't
that just the nature of the business you are in?
Jane Coyle: But
this is what we are trying to move away from. We are trying to
move to a more formal business so that we can retain and keep
the best staff, because that is what it is all about. It is providing
quality work. It is almost impossible to work on these very
shortterm contracts. With Lancashire, we have entered into
a calloff contract with them which offers them a very high
degree of flexibility. It is really thinking out of the box. They
have really gone that extra step. It is essentially a threeyear
contract that we have with them.
Q631 Chair: The
point I was getting at was those circumstances where the minimum
size of contract, minimum area covered and things like that would
simply preclude you. It was not that the work was difficult for
you to provide on what was almost like an agency basis, filling
in somebody else's gaps, but simply you were disqualified from
applying because you had to be of a certain size or make a certain
bid. You haven't had that particular experience.
Jane Coyle: We
haven't had that directly with probation trusts. We have had that
with the private prisons.
Q632 Mrs Grant:
Jane, I think you may have covered it, but I just wanted to clarify
this. You are a smaller company. If in future a larger part of
the work that you did, say, 75%, was related to payment by results,
do you think it would be manageable for you to work the cash flow
of your firm and pay everybody and keep it going on that method,
or would you have to have a fairly significant proportion of other
work to help your cash flow?
Jane Coyle: It
is a very good question and it is something that obviously we
have thought about. When we saw what the questions were going
to be, we thought about exactly what you have said. It is difficult
to answer because we haven't gone down that road yet. I think
we would possibly need some assistance in terms of how we could
manage that, whether that would be working with others, in partnership
with others. I do not think anything is impossible and, if that
was definitely going to be the way that we would have to work,
we would certainly find a way of doing it.
Q633 Mrs Grant:
But cash flow is going to be key, isn't it?
Jane Coyle: Cash
flow is going to be an issue for a smaller business, definitely
Peter Neden: Helen,
could I suggest that that is not just related to small businesses?
It is an issue for large businesses. But it is not just cash flow.
It is also about certainty. In a world where there just isn't
enough evidence, businesses don't just take wild guesses. They
take informed investment decisions. Cash flow is one aspect of
that, but certainty is the other.
Q634 Mrs Grant:
I see the planning point as well, but sometimes with larger businesses
there are other streams of more certain revenue coming in—not
all, but certainly in the legal sector, for example, there might
be, whereas you have a much smaller firm. You might be more dependent
and that could have a very severe effect on whether you can continue
to provide that service. I do take on board what you are saying,
but that was the particular issue I was concerned about.
Peter Neden: It
was certainly a factor in the Work programme, where I think we
have around 300 subcontracting providers and many of those would
not have been able to contract because of these issues.
Q635 Chair: You
have around 300 subcontractors?
Peter Neden: Yes.
Q636 Jeremy Corbyn:
I am interested in that last answer, but it doesn't sound very
satisfactory if you are getting a contract with the Probation
Service or any other provider of justice and you then subcontract
that to 300 other people. It sounds to me like a repeat of the
disasters of Railtrack and its 1,000 subcontractors. But my point
is that you are in this to make money. How profitable is it for
all three of you?
Jane Coyle: I think
there is an awful lot of work out there.
Q637 Jeremy Corbyn:
No. I said how profitable is it?
Jane Coyle: Do
you mean in terms of figures?
Q638 Jeremy Corbyn:
For your companies, yes.
Jane Coyle: I would
actually find that quite difficult to answer, if I am honest.
Is that something I could put in writing to the Committee?
Peter Neden: How
profitable is what?
Q639 Jeremy Corbyn:
Your contracts with the Probation Service.
Roger Hill: We
don't have any contracts with the Probation Service, so they don't
make any profit.
Q640 Jeremy Corbyn:
What about your other contracts within the judicial system?
Roger Hill: We
have contracts for prisons which clearly do run with a profit
element, but we provide a service for an agreed contracted price
and we have won that contract in the market against other providers
for that price. Interestingly, we have just made a bid for two
prisons and lost them, predominantly on price. That is the nature
of the private sector operating in that market. The difference
that you have between our companies and the public sector is that
you do have a service guaranteed at a price that you have contracted
with.
Q641 Chair: What
do you tell your shareholders in your annual report about the
current and prospective profitability of this area of work as
compared to the other areas in which you operate?
Roger Hill: Chair,
I am sorry, I cannot answer that question. I don't know the answer.
Chair: We will have to
look at your annual report.
Peter Neden: I
am not sure that we do, but our margins are around 7%.
Q642 Jeremy Corbyn:
What about your subcontracting arrangements? I am quite surprised
by that. Who are these subcontractors?
Peter Neden: For
the Work programme we have a whole range of partners that we are
working with to accommodate the need to keep the supply chain
of a very large number of voluntary and other private sector organisations.
That was a requirement of the bid. That is the reason for that.
There is a whole range of small charities that help people with
particular needs where we think they can do a good job for us.
Q643 Jeremy Corbyn:
Isn't this a management nightmare?
Peter Neden: No.
One of the things we bring is the ability to manage that supply
chain. We have systems, process and management in place that will
do that for us.
Q644 Chair: This
is the final point. There are three groups of people I just want
to mention whose confidence in the system is rather important.
They are sentencers, like the Magistrates' Association we heard
from this morning, the victims and the public in general, all
of whom might doubt whether the private sector is going to earn
their confidence. To what extent do you think it is possible to
write into the contracts engagement with those categories of people?
Are they measurable things or do we just rely on the good nature
of your organisations or, indeed, the commercial advantage in
establishing good relations with those groups of people?
Roger Hill: My
organisation is a very valuesdriven organisation. We opt
out of markets where we can't use our values. In fact we rule
ourselves out of more than half the corrections markets across
the world because of the death sentence or the fact that staff
are required to carry guns. We stand very strongly by our values.
It is arguable whether you should have to, but I think you can
and it would be a good thing to write into contracts as you describe.
It is very interesting that in my last job I was director of offender
management for the south-east, which was the point in my career
at which I became much more convinced by a marketdriven
philosophy. I talked a great deal to a great many groups, including
a lot of sentencer groups, about what mattered being the provision
and not who provided it. I never had anybody disagree with me
on that. Whatever you want as a service, you can build in whatever
expectations you like into those contracts, and all the organisations
that want to bid for it should be able to convince, because there
is a proper story to tell, the three groups that you have described.
Peter Neden: Also,
you are talking really about governance and, in addition to operating
in the legislative framework, each of these contracts operates
under a professional framework. So we employ people with professional
qualifications. We operate under the client scrutiny of contract
governance, which is something that in state monopolies often
doesn't happen actually. But then we also operate under the various
inspectorates—the IMBs. So there is quite a lot of governance
placed upon us. If we wanted to add another layer to that, I don't
think that would be difficult because that is part of doing business.
Q645 Chair: One
other group which is sometimes mentioned in this context is your
actual clients, service users, people who have committed offences
and who can sometimes contribute quite useful knowledge and experience
into what you do. Should you be required to engage with them in
particular ways over and above their actual sentence in order
to establish their response to what has happened to them? Is that
something you should be required to do or is it something you
would do anyway?
Jane Coyle: If
I could comment on that point, certainly that is something that
goes on within the Probation Service at the moment. It has been
a number of years since I have worked as a probation officer,
but certainly when I was involved there was a form that offenders
would have to fill in. It would be part of the end-to-end offender
management process, and they would have to give their opinion
on the service they had received. That piece of paper was not
just then thrown away. Those results were accumulated and they
were taken on board as serious comments. That is something that
is in place. Any organisation working with the Probation Service
needs to use the structures that are already in place because
obviously that is where the quality of work is. There is a lot
of quality of work there. If I may also mention about the sentencers,
that is something that is very relevant to us in terms of how
we gain their confidence. Again, as someone who has worked in
the Probation Service and worked in the courts, the comments of
sentencers are crucial. Taking probation officers out of court
is potentially problematic and not getting that direct feedback
from sentencers, and also I think the presentence report
and the OASys assessment is the crucial document to give sentencers
the confidence to impose noncustodial sentences. Having
a wellargued document in front of them makes them less likely
to impose short custodial sentences and go with the noncustodial
options. A probation officer in court is going to improve dialogue
between the sentencers and the service.
Q646 Chair: Thank
you very much indeed. We are very grateful to all three of you.
Did you wish to add something?
Roger Hill: I just
wanted to add something on the issue of service users, Chair.
It is an issue about which I feel very strongly. You probably
know that in the Peterborough Social Impact Bond project, the
service delivery organisation, which is the St Giles Trust, uses
exoffender mentors to work with those prisoners being released.
I have looked at the research and I know the St Giles organisation
well, and I think that is a model that has very considerable opportunity
for development. I believe, fundamentally, that service users
or exservice users, if we can call them that, should be
used in the design of services, just asking people what worked
or what would have worked for them in this context. Before I left
NOMS, I was a very strong advocate of the view that a service
user perspective should be built into the specification for the
Community Payback bidding round. I think you are absolutely right.
There is considerable scope for a service user and exservice
user involvement in both the process of service design and delivery,
and it is a largely unexploited market.
Chair: Thank you very
much indeed. As I say, we are very grateful to all three of you.
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