Crime reduction policies: a co-ordinated approach ? Interim report on the Government's Transforming Rehabilitation programme - Justice Committee Contents

1  The rationale and evidence base for the Transforming Rehabilitation reforms

Introduction to the Government's Transforming Rehabilitation reforms

1. The Government's Transforming Rehabilitation reforms involve a substantial recasting of the way probation services are provided, and are both radical and controversial. There are sharply differing views about this among our witnesses and among members of this Committee. Some members see them as the only available way of achieving the important policy objective of extending post-release supervision to offenders on short sentences, and as providing an opportunity for innovative work on rehabilitation by the private and voluntary sector while introducing a national probation service to handle those posing the greatest risk to the public. Other members of the Committee believe that so large a transfer of functions away from the public sector is either undesirable in principle or too risky, unlikely to deliver better results than the present system and, if it is done at all, it should only be after it has been piloted in part of the country. We do not seek to resolve that difference in this Report: our approach has been to collect evidence from a range of those with experience or knowledge in this field and to question Ministers and officials in order to clarify how the system might operate and how risks will be mitigated. In doing so we have also recognised that, as well as the risks involved in change, there are also risks involved in not taking action to deal with the gaps and weaknesses in the present system.We hope that this evidence and our analysis of it will assist the House.

2. The Coalition Agreement set out that the Government would introduce a "Rehabilitation Revolution".Paid for by the savings it generated and provided by independent providers, this would seek to tackle the root causes of offending, including homelessness, drug and alcohol dependency, mental illness and unemployment.[1]The Government announced in May 2013 that it would proceed with its Transforming Rehabilitationprogramme: a package of reforms to probation and rehabilitative services on which it had begun a consultation in January2013.[2]Theprogramme has four elements:

a)  Extending statutory rehabilitative support to the most prolific group of offenders: prisoners who have served sentences of less than 12 months;

b)  Opening up rehabilitation services to a diverse market of providers of probation services to low and medium risk offenders, while introducing a new payment mechanism to focus on reducing rates of reoffending;

c)  Creating a national public probation service focused on public protection; and,

d)  Reorganising the prison estate to manage the flow of offenders from within prison, through the gate and into the community, reforming rehabilitation services and the designation of prisons to focus release into specific areas.

Through the reforms the Secretary of State for Justice, Rt Hon Chris Grayling MP, explained that he seeks to achieve: more flexibility in delivery through greater professional freedom; extension of the scope of rehabilitation to short-sentenced prisoners and "through the gate" from custody to community; more efficient services; greater diversity of providers; andcollaboration with partners.[3]

3. We took evidence on the Transforming Rehabilitation proposals from the Secretary of Statein a one-off session on 27 February, shortly after the consultation closed. In April we commenced a wider inquiry entitled Crime reduction policies: a co-ordinated approach?as part of whichwe sought to consider the proposed Transforming Rehabilitation reforms in terms of their cost-effectiveness and sustainability in the context of the Government's strategies for punishment and rehabilitation. In response to concerns expressed to us in written evidence about the pace and nature of change being brought about, we decided to expedite our consideration of the subject within our wider inquiry in order to produce this interim report. We took oral evidence from probation representatives, voluntary sector representatives, public policy experts and othersspecifically on Transforming Rehabilitation on two occasions (2 July and 12 November) and received an informal briefing from Ministry of Justice (MoJ) officials on 26 November.The Secretary of State and the Parliamentary Under-Secretary of State for Justice, Jeremy Wright MP, gave evidence on 4th December.

The rationale for reform

Extending supervision to short-sentenced prisoners

4. The principal grounds for introducing these reforms are to use efficiencies in the delivery of existing probation services to extend statutory post-release supervision to those who have served prison sentences of fewer than 12 months: an extra 50,000 offenders. This feature of the Government's plans is intended to rectify a long-standing anomaly in the system—that those offenders who tend to be the most prolific and have particularly high reconviction rates receive no statutory support—and was welcomed unreservedly by our witnesses.[4]Richard Monkhouse of the Magistrates' Association observed:

    People who are on short-term custodial sentences need that help because they lead dysfunctional lives; they have accommodation, health and family problems; and simply leaving them at the prison door is not assisting any of that, so we are quite happy that that is happening. [5]

5. Most of the wider Transforming Rehabilitation reforms can be undertaken under powers to arrange provision of probation services already available to the Secretary of State under the Offender Management Act 2007, but legislation is required to extend rehabilitative services to short-sentenced prisoners. Consequently, the Offender Rehabilitation Bill was introduced in the House of Lords on 9 May, and when we considered this Report it was awaiting report stage in the House of Commons.

6. Such a reform has the potential to reduce the costs of reoffending. An NAO report on short term offenders in 2010 concluded that NOMS' inability to achieve its goal of reducing the risk of short-sentenced prisoners re-offending generated economic and social costs amounting tobetween £7bn and £10bn annually.[6] Since then Integrated Offender Management (IOM) schemeshave been established,largely using existing resources, and are now "almost universal".[7]These schemes provide a partnership approach, between the police and probation, to dealing on a non-statutory, and therefore voluntary, basis with persistent offenders, many of whom serve repeated short prison sentences. Some are demonstrating extremely positive results and our witnesses wished to see these protected, or built on, in the new commissioning landscape.[8]The Government have acknowledged the importance of these local partnerships—the success of which provide supporting evidence for the benefits of taking a dedicated approach to this group of offenders—and will require new providers to demonstrate how they will "sustain and develop" such schemes in their area.[9]

7. The scope for benefits to accrue from the new provision for short-sentenced offenders in terms of reducing overall reoffending rates is borne out by evidence that they are the most prolific re-offenders. The latest information on comparative re-offending rates of those sentenced to less than 12 months in custody compared to those receiving longer custodial sentences or non-custodial sentences is contained in the Ministry's 2013 Compendium of re-offending statistics and analysis, which notes that offenders sentenced to less than 12 months in custody had a higher one year re-offending rate than similar, matched offenders receiving

·  a community order, of 6.4 percentage points for 2010;

·  a suspended sentence order, of 8.6 percentage points for 2010;

·  a 'court order' (either a community order or a suspended order), of 6.8 percentage points for 2010.

Offenders sentenced to less than 12 months in custody also had a higher re-offending rate than offenders given an immediate custodial sentence of between 1 and 4 years. The difference was 12 percentage points for 2010.[10] Probation Trusts have pointed out that they have been having success in reducing reoffending by those offenders whom they do have responsibility for supervising. There is a risk that the focus of these reforms on reducing reoffending by short-sentenced prisoners will destabilise the progress that has been made with other cohorts of offenders. It should also be noted, as we raised in our report Women offenders: after the Corston report, that it does not necessarily follow that lower risk offenders require a lower intensity of support.[11]

8. The potential for the extension of statutory supervision to those who have served fewer than 12 months in custody, together with the introduction of new providers,to lead to a change in sentencing behaviour was raised by several of our witnesses.[12] Our attention was drawn to an example in which there were unintended increases in the use of custodial sentences. The introduction of the detention and training order, a similar sentence for young offenders, led to a doubling in the youth custodial population. This indicates that the statutory extension of supervision to those serving short-prison sentences might increase sentencers' propensity to use such sentences, increasing demand on the prison system when a non-custodial option might prove more cost-effective.[13]

9. We explored this possibility with Richard Monkhouse, now Chair of the Magistrates' Association, who explained the potential impact on sentencer behaviour:

    The main risk is one of trust and confidence. Sentencers, who deal with 95% of all cases that come into a courtroom, need to build up a relationship—which we have done with the Probation Service—both inside and outside court, and that does not happen overnight. One of the dangers is that where you are dealing with offenders who pass the custody threshold, magistrates have been managing to keep a lot of those out. Our custody imposition has come down significantly over the last 10 years because alternatives have been present. We do not want to see those alternatives go, and many of those alternatives are at local level, with local voluntary organisations.[14]

When we raised the potential for this with the Justice Secretary in February 2013, he stated:

    "It is not impossible, but we do not want that to happen and we are going to work closely with magistrates and judges to ensure that it does not happen. In many respects, people sentencing will see this as a positive benefit that will help turn lives around, but I do not want people to believe that it is a vehicle to create shorter sentences. We have to be careful to address that issue."[15]

10. Whilst the addition of resettlement support might make short prison sentences appear to the courts to be a more attractive alternative to community orders, this should not replace the focus on using community orders where appropriate for non-violent offenders. These are likely to remain a more cost-effective way of dispensing justice and avoid the disruption to families, employment, and housing arising from a short spell of imprisonment. Care will also need to be taken to ensure that any gains made with reducing reoffending by short sentenced prisoners do not come at theexpense of the supervision of offenders on other sentences. We ask the Ministry, in its response to this report, to set out how it intends to reduce the potential for the objectives of its reform to be undermined by an escalation in the number of offenders given short prison sentences as opposed to community sentences. The Government's response to this report should also set out the projected impact of the extension of rehabilitation to short sentenced offenders on the prison population and on associated costs.


11. The Ministry intends to fund the extension of statutory rehabilitation services through savings released by increased competition and the introduction of payment by results.To facilitate this, they have decided to dividethe management of existing probation servicesin accordance with the level of risk posed by offenders, putting out to competition 21 "contract package areas" to manage low and medium risk offenders, and establishing a national probation service to manage the most serious offenders and oversee services to the courts and aspects of public protection. The Secretary of State described for us his vision:

    I am not proposing some great new rocket-science methodology. I am proposing a very simple principle, which is to trust the professionals and give them the freedom to get on with the job.[16]

    He also clarified that he was not expecting great falls in reoffending:

    My goal is to get an incremental change, year by year. This is not going to start on day one and, by day three, reoffending will suddenly be down by half. What we want is a consistent drop of a few percentage points at a time in the level of reoffending, particularly for those groups where there is a high level of reoffending.[17]

12. Some witnesses were supportive ofplans to open provision of probation services to a diverse range of providers and of the principle of incentivising effective practice in reducing re-offending through the introduction of a new payment by results mechanism.[18]Despite this, some were not convinced that the approach the Government had adopted was the best means to achieve this. It was recognised that structuring contracts and the payment mechanism in the right way will be critical to incentivising the desired resultwhilst avoiding perverse behaviour on the part of new providers. The architecture of both of these will determine the range of providers that are able to seek to enter the market.[19]The first phase of competition, the pre-qualifying stage, closed at the end of November. We discuss the intricacies of the design of the payment mechanismin chapter3 and the creation of the market in chapter 4.

13. The new proposals represented a significant departure from the direction of travel in changing the delivery of rehabilitation and probation services taken by the previous Ministerial team.That team had consulted on opening up competition and introducing payment by results, but had planned to do so by devolving commissioning arrangements for community rehabilitative services initially to Probation Trusts, and perhaps ultimately to local authorities or Police and Crime Commissioners.[20]Weconsidered these proposals in our probation inquiry in 2011 and concluded that Trusts were best placed to lead local pilots for payment by results. We also expressed concerns that the Government's broader commitment to devolving commissioning to the local level did not fit with its plans to commission some probation services in large geographical lots. We argued that this would undermine links between probation and other participants in the criminal justice system, such as the police, courts, local authorities and local prisons.[21]These questions remain valid in the context of these reforms and we consider them further in chapter 2.


14. The Government also wishes to create a "genuine 'through the gate' service", wherebythe new providers of probation services will work with all prisoners for three monthsbefore release as well as supervising them thereafter. The prison estate will be reconfigured to designate 85 local resettlement prisons.[22] New providers will be expected to deliver this pre- and post-release rehabilitativework alongside administering the sentence of the court for low and medium risk offenders serving community orders who make up the bulk of the existing probation caseload.This work serves other purposes of justice, including punishment, reparation, and retribution.[23]

15. The view of Napo, a trade union representing probation staff, is that while reducing re-offending is a vital part of probation work, it does not reflect the complexity of offender management services. They argue that reducing the risk of harm is also vital (even if non-harmful offending still occurs) but they fear that public protection is given no value under this model.[24]As well as delivering services themselves, Probation Trusts play a strategic role in meeting both the needs of the courts and their other statutory obligations within a complex array of local partnerships with local criminal justice agencies and other statutory agencies, for example, to commission, co-commission, and broker access to a range of other services.[25]We consider briefly the potential impact of the reforms on local partnership work to reduce crime in chapter 2, but will return to this subject, and the role of resettlement prisons, in more detail in our final report.

The evidence base for the reforms

16. The Ministry's new proposals are a significant step up in scale in the outsourcing of criminal justice services. As a comparison, the majority of prisons are still publicly managed even though the private sector began to be introduced to the management of prisons through a staged process in the early 1990s.Concern was expressed by witnesses across the spectrum about the strength of the evidence base for various aspects of the reforms.[26]Probation stakeholders and magistrates felt that there was no evidence that the whole model proposed would work better than the existing system.[27]Ian Lawrence, General Secretary of Napo, a trade union representing probation staff, characterised the reforms as "...a recipe for disaster. They pose a massive risk to public safety, and are untried, untested and in our view ideologically flawed" and "destroying what works to put in place an experiment."[28]The Probation Chiefs Association similarly argued that "[the] high performing Probation Trust structure would be replaced by a system that is untested and where there is no evidence that it will perform better or deliver efficiencies as intentioned."[29]Richard Monkhouse of the Magistrates' Association observed "We have no evidence that anything [that is proposed] will work".[30]Other witnesseshighlighted in particular the shortage of evidence on the application of payment by results to the criminal justice arena andon what drives reoffending rates.[31]


17. Some feared that there were risks that the contracting element of the programme would lead to poor diversity of services, would limit innovation, and would deliver poor value for money, particularly in the light of the complexity of rehabilitative services currently provided or brokered by probation Trusts and their partners.[32]Tom Gash of the Institute for Government said there is "a very low evidence base about the benefits of putting things out to contract". He explained that, at what he described as the "simple end of services"[33], outsourcing can generate efficiency savings of between 10 and 20 percent, with no diminution in quality, but with more complex services such as probation the costs and overheads of managing and monitoring contracts can be considerable.[34] Ian Mulheirn speculated on whether outsourcing such complex services can engender innovation, or simply risk driving out quality. He explained: "Payment by results is supposed to be a way around that, by uniting the two and aligning the incentives, so that there is no divergence between quality and price for the provider and for the commissioner."[35]

Contracting out electronic monitoring and community payback

18. The Ministry has some experience of contracting out probation services, and in its consultation citedelectronic monitoring and the community payback scheme in London as examples of this.[36]These are, on the face of it, relatively simple interventions in the context of the range of probation services, but both projectshave apparently encountered difficulties.[37]The Justice Secretary told us that the community payback contract awarded to London Probation Trust and Serco had provided 40% efficiency savings which he hoped was indicative of what he could replicate in the broader reforms.[38] However, Napo told us that their members have complained about the quality of provision under thiscontract.[39]Of particular relevance are criticisms about the lack of robust evidence when cases come to court for enforcement action and about poor record keeping. The separation of day-to-day supervision from public protection under the contract is a similar feature to that of the model for the Transforming Rehabilitation reforms.In order to assure ourselves of the operation of this project, we asked the Ministryfor performance data.They stated: "Serco's performance has been improving month on month since the contract began in October. They are now meeting most of the key targets and out-performing the national average for Probation Trusts on key measures such as enforcement, successful completions and commencement within 7 days." Reconviction rates specific to the project are not collated.[40]


19. When we considered the application of payment by results to criminal justice in our report on probation we concluded that:

    "[…] the payment by results models proposed are untested [...] and represent a significant departure from existing commissioning arrangements. Nevertheless, given the problems faced by the sector, there are compelling reasons to test the potential of a radically different approach."[41]

The Ministry was in the process of developing various pilots, includingtwopilot schemes involving contracting out community rehabilitation services, when the new Ministerial team decided to cancel those that had not commenced to review the direction of payment by results in autumn 2012.[42] The Secretary of State defended this decision:

    On the evidence, there has been a debate. The Opposition has said, "Why don't you do all the pilots first?" I think that the process that they set up, initially in Peterborough and now in Doncaster as well, will take us much of the rest of this decade to see through to a conclusion, evaluating the data and coming up with an analysis. We are talking about the core principle of trusting the professionals and making them take a bit of the risk themselves, putting together a system that catches the best of public, private and voluntary: in the public sector, real skills in protecting the public against harm; in the voluntary sector, real skills in mentoring; and in the private sector, real skills in driving up value for the taxpayer so that we can reinvest money in the other 12-month group.

The first formal results for the prison based pilots will not be available until mid-2014.[43] Yet we were told by the Secretary of State in February2013 that the payment by results approach was "so obviously the right thing to do"[44]. The most significant change proposed is the application of payment by results to probation services which, as we noted above, has not been tested.[45] Probation stakeholders and many others in the criminal justice sector have criticised the Government's approach.[46]However, Max Chambers of Policy Exchange, who had been involved in the pilots as a provider, argued that despite the cancellation of the six further planned pilots—which in his view were neither commercially viable nor of sufficient scale to be representative—the Ministry had already "tested to destruction" the options for payment by results through the pilot process and had learnt enough about how to scale it, including how to incentivise, how to procure, how to measure and how to pay.[47] In chapter 3 we explore this matter in greater detail.


20. There are also questions about the extent to which there is a sufficiently robust evidence base for what constitutes effective practice in reducing reoffending.[48]The Ministry has been seeking to remedy this through the creation of a Justice Data Lab—an initiative which enables organisations working with offenders to establish their impact on reoffending by accessing central data—and the production of rapid evidence assessments to place in the public domain thebest information about what works.[49]The rapid evidence assessment on the impact on reoffending of mentoring—which Mr Grayling told us he wishes to see more of as a result of the reforms—was inconclusive.[50] When we asked Mr Grayling about the evidential basis for mentoring he did not mention this study, but referred to the emerging results from the pilot at HMP Peterborough which he told us was now demonstrating a "very substantial decline in reconviction rates...well in excess of 20%."[51]

21. There is some emerging evidence of promising results from some community-based and through-the-gate interventions that make a concerted effort to reduce reoffending by some short-sentenced prisoners. It should be noted however that these schemes are voluntary in nature, have not yet been running for sufficiently long to produce robust results, and represent only one aspect of the model proposed. Consequently, there is a question about how much they are indicative of the potential of the entire package of reforms.The absence of piloting of payment by results for delivering reductions in reoffending by those subject to probation services means that some lack confidence that the Government's reform programme will work better than the existing system.

The scale and pace of the reforms

22. Our witnesses highlighted the challenges of the proposed timetable for implementation, both for potential providers and current practitioners.[52] We explore the relevance of the pace of reformsthroughout our report as we consider each aspect of the programme. In general terms,Tom Gash characterised the Ministry's reforms as "probably the most ambitious outsourcing programme that the Government had ever embarked on".[53] On the other hand, Max Chambers noted that the process did not involve the creation of a whole new service, as the Work Programme did.[54]

23. The Secretary of State himself acknowledged that establishing the Transforming Rehabilitation programme was "a more complicated process" than the Work Programme, because of the reorganisation required within the probation sector.[55] Nevertheless, in response to concerns about the scale of the reforms and the absence of testing, he said:

    "This is not a big bang approach; it is an evolution, not revolution. The changes will take place over a period of at least a year, which will allow bedding in across the country. For example, the transition to inclusion of the under-12-month group builds up over an extensive period of time. Over the first six months, only offenders in the very low thousands are involved, so there is plenty of time for that new system to bed in."[56]

He alsotold us he wished to see the anomaly of the absence of support to the most prolific offenders resolved swiftly as it was too important a problem to delay and unfair on those who do not get the support they desire.[57]The Ministry states that implementing the new system in phases will allow time for providers to form bids, for the public sector to restructure with "minimal disruption to business as usual" and for new services to be set up.[58]We note that in a different context, talking about difficulties which had been experienced in relation to the Ministry's Shared Services Programme, rationalising provision of corporate services, Dame Ursula Brennan, the Permanent Secretary, told us in October 2013 that "When you have something really big and complicated, biting it off in bite-sized chunks is now thought to be a better way of going"[59].

24. Some of our witnesses were supportiveofthe underlying principles of the Government's Transforming Rehabilitation reform programme, in particular, the extension of pre and post-release support to short-sentenced prisoners, the introduction of an element of payment for outcomes sought, and opening up the provision of probation services to a greater diversity of providers. Neverthelesswitnesses, including some supportive of the proposed changes, had significant apprehensions about the scale, architecture, detail and consequences of the reformsand the pace at which the Government is seeking to implement them.

Assessment of risks

25. Much of this report is concerned with a discussion of the risks which might, if they materialise, adversely affect implementation of the Transforming Rehabilitation programme.Evaluation and assessment of risks, which informs action taken to mitigate them as appropriate, is an essential part of the management of any major project, all the more so in a case such as this one, where operational failures might lead to an increase in the threat to public safety.At the same time we acknowledge that radical change presents more potential risks than minor change: this should not be an excuse for inaction. Before the Secretary of State gave oral evidence to us we asked to be provided with a copy of the latest version of the Ministry's internal risk register for the programme. This request was refused. When we pressed the Secretary of State on this refusal, he explained his position in the following terms:

    It has never been the habit of any Government to make public risk registers. It is worth saying what a risk register is. It is simply a group of civil servants who at the start of a project sit down and work out everything that could possibly go wrong so that they take appropriate steps to make sure it does not. If you produce a risk register, it is a whole litany of potential disasters in the making, not ones that are likely to happen but ones we are working to make sure do not happen. This applies to every project in the public sector, whether it is a big IT or organisational change project. It is not a true reflection of the nature of the project; it is more a reference point to make sure we have thought of everything that could go wrong and have taken the steps to make sure it does not. It has never been the custom and practice of Governments to publish that. It is not a document on which you can base a true assessment of the state of a project. It is an internal working tool, and I think it should remain such. [60]

26. Evidence we have taken in this report demonstrates that there is considerable consensus about the nature of the risks involved in implementation of the Transforming Rehabilitation project and we have used this evidence to arrive at our conclusions on the subject.[61]No project on this scale is without risk, and we do not approach the question from the naïve standpoint that all risk can or should be eliminated. It is not satisfactory, however, that we are unable to inform our scrutiny of the programme with more systematic information from the Ministry about the major risks they have identified and the steps that they have taken and are taking to mitigate those risks. In order to reassure us we ask the Ministry, in its response to this report, to provide a narrative description of those risks which it considers most significant to the success of the programme as a result of the combination of their likelihood of occurring and their seriousness if they were to occur, and in relation to each of them to describe mitigations which have been put in place or are proposed.


27. When it comes to providing information about the likely costs of its rehabilitation revolution, particularly those arising from the extension of provision to short-sentenced offenders, the Ministry has been less than forthcoming. It believes it can reduce costs through competition, using those savings to pay for its new approach. We have seen no estimate of how much the Ministry would additionally need to save to afford the cost of implementing its proposals, including the structural reform required, or how quickly savings will be realised to fund the extension of twelve month's post-release statutory support to all prisoners. The latter will comprise two groups: those sentenced to less than 12 months in prison, who do not currently receive any support, and those sentenced to between 12 months and 2 years, who are currently supervised for a period equating to half their sentence. This will increase probation caseloads by up to 65,000 offenders.[62]

28. Some limited costs were included in a revised impact assessment for the Offender Rehabilitation Bill after the Government was criticised in the House of Lords about the quality of information on which peers were to be expected to support it.[63] In this impact assessment the Ministry states it has undertaken detailed modelling of the likely costs but considers it "inappropriate to release these costs, as they will be dependent on the outcome of competing offender services in the community. If we were to publish an estimated figure for the future costs this could put contractual negotiations at risk and prejudice the effectiveness of the competition."

29. We sought further information from the Ministry on some of the costs of the programme that we did not consider would be commercially sensitive. The Department was unwilling to disclose the costs that had been expended on the Programme to date but assured us that these were being met from the current budget. As we note in chapter two, the Ministry has not yet determined the budget allocation for the two new entities. The projected running costs of the National Probation Service are in the region of £400 million per annum, representing 49% of NOMS' current probation budget.[64] The total value of the contract packages is reported to be between £5 and £20 billion, equating to up to £500 million per annum.[65]

30. Properties in the probation estate make up 10% of the current budget. NOMS anticipates that these costs will be shared between CRCs and the NPS until at least December 2015. The exact costs of exiting any properties that become surplus to requirements is unknown as this will depend on future operating models. Another large proportion of the existing budget is dedicated to staff costs. Some efficiency savings might be made through the streamlining of probation areas when the 35 Trusts are reduced to 21 CRCs, although there are also likely to be associated redundancy and restructuring costs.[66] The Ministry has budgeted for a redundancy package but was unwilling to disclose the size of this as they felt it would prejudice negotiations with potential providers. It did tell us however, that £4.15 million has been set aside for restructuring Probation Trusts. A further additional cost relates to the information technology required to underpin the reforms. The cost of rationalising numerous separate computer packages was considered by the Ministry to be commercially sensitive.[67] As we note in chapter two the twin structure of probation services is also likely to result in some inefficiencies in terms of duplication of effort, for example, in partnership work and case management.

31. When the Secretary of State announced to the House the reversal of his plans for prison competition in November 2012 he explained that benchmarking would instead be undertaken across the public prison estate to save £450 million over a six year period which could be used rapidly to expand the payment by results approach.[68]In evidence to us Mr Grayling clarified that any savings stemming from this would now be subsumed into departmental savings targets. Prisons currently hold a number of contracts which cover resettlement services that in the future will be provided by CRCs. We asked the Ministry for the current cost of resettlement services across the prison estate but were told that this is not held centrally.[69]As we were preparing our report a Joint Criminal Justice Inspection report on prison based offender management was published which concluded that this wasnot functioning well and required a fundamental review. It stated that "Th[e] lack of progress [on our previous recommendations] is of particular concern as it casts doubt about the Prison Service's capacity to implement the changes required under the Transforming Rehabilitation Strategy designed to reduce reoffending rates, especially for short-term prisoners."[70] Mr Wright was confident that the Government's plans would resolve the problems encountered by the Inspectorate.[71] The question remains as to whether this is realistic within the context of the resources that can be allocated to this aspect of the programme.

32. The Guardian reported on 24 June 2013 that the Ministry's internal risk register assessed at 51% to 80% the risk that the reforms would fail to deliver the proposed level of savings.[72] When we put this to Mr Grayling, he assured us that the fact that the Treasury had approved the outline business case signalled that this was not so He explained that whilst there were likely to be small savings, the programme is "not a money saving exercise": rather it is about seeking to change the cost base of the criminal justice system in future by bringing down the rate of reoffending.[73] He anticipated that additional savings and additional reduced pressure on the system would begin to be seen in the "second half of the decade".[74]

33. There isalso likely to be a range of costs associated with the broader consequences of the programme, some of which are currently unknown. The impact assessment estimates additional costs of between £12 and £48 million per year stemming from increases in breaches of licence and supervision conditions. There will also be an additional burden to the police, estimated to cost up to £5 million per annum, as police time will be needed to deal with offenders who fail to comply with the conditions of supervision. On the other hand, no financial provision appears to have been made for any potential elevation in the use of custody by sentencers in the Government's impact assessment for the Bill—indeed its judgment is that over time there will be a reduction in the number of offenders returning to the system with the potential to cut prison costs—although it states that it will monitor closely "any effect on sentencing practice, non-compliance and sanctions."[75]There are other potentially unforeseen financial implications of the reforms, including, for example, escalation in referrals to other statutory services, the loss (or redeployment) of fundraised income from the voluntary sector, the unknown impact on existing co-commissioning partnership arrangements, and the risk of forfeiting the broader value of non-statutory services which enable the courts to divert the lowest risk offenders from community sentences.[76]

34. On the limited information which the Government has provided, it is not clear to us whether sufficient funding is in place to meet the costs of transition to the new system and of statutory rehabilitation for those sentenced to less than 12 months in custody. For the Transforming Rehabilitation programme to meet its objectives, substantial improvement will be needed in relation to two other elements that are not currently working well: rehabilitative provision in custody, including through the gate supervision for all prisoners coming to the end of their sentence; and provision of requirements that can be attached to community orders, including mental health, drug, and alcohol treatment. The costs of making the structural reforms and efficiencies necessary to support the programme are also likely to be considerable. A key question for the affordability of these reforms is how new providers will fund all this now that NOMS plans to dedicate to them only the community based element of existing rehabilitation resources.

35. The Government is confident that over the longer term demand on the system will be lessened through these reforms, reducing in particular the economic and social costs of reoffending by short-sentenced prisoners (estimated to be between £7 billion and £10 billion a year). This would lead to the virtuous cycle of reduced reoffending and reduced public funding that is the ultimate policy goal. But in the absence of published projections of the likely reductions in reoffending or estimates of how this might impact on the future costs of the system, it is not possible to predict whether savings will be swallowed up by increased demand on the prison system and reduced funding of existing services by statutory partners and other funders.

1   HM Government, The Coalition: our programme for government, May 2010, p 23 Back

2   Ministry of Justice, Transforming Rehabilitation: a strategy for reform, Cm 8619, May 2013 Back

3   Oral evidence taken on 27 February 2013, HC (2012-13) 964 Back

4  London Councils (PPC 05) and (PPC 20); Probation Chiefs Association (PPC 07); Local Government Association (PPC 11); Prison Reform Trust (PPC 13);Magistrates' Association (PPC 17); Rob Allen (PPC 21); Q3 [Napo];Q5 [Mr Hadjipavlou]; Q59 [Ms Bourne; Ms Mountstevens]; Q113 [Mr Eccles] Back

5   Q8 Back

6   Report of the Comptroller and Auditor General, Managing offenders on short custodial sentences, HC (2009-10) 431, p 4 Back

7   Q12 [Mr Hadjipavlou]; National Policing Lead for Integrated Offender Management (PPC 08)  Back

8  Association of Chief Police Officers(PPC 08); Two Police and Crime Commissioners cited results from examples in their areas: in Bristol crime had fallen by 58%, and in Sussex reconvictions were 78% lower than predicted. Q60; Qq71-72 [Ms Mountstevens; Ms Bourne]; See also Probation Chiefs Association (PPC 07); Rob Allen (PPC 21) Back

9  Ministry of Justice, Transforming Rehabilitation: a strategy for reform, Cm 8619, May 2013, p 30 Back

10   Ministry of Justice, 2013 Compendium of re-offending statistics and analysis, July 2013 Back

11   Justice Committee, Second Report of Session 2013-14, Women offenders: after the Corston Report. HC 92, para 126. See also Magistrates' Association (PPC 17)  Back

12   Criminal Justice Alliance (PPC 06); Prison Reform Trust (PPC 13); Q7 [Mr Monkhouse]  Back

13   DrugScope (PPC 12); Prison Reform Trust (PPC 13)  Back

14   Q7 Back

15   Oral evidence taken on 27 February 2013, HC (2012-13) 964, Q32 Back

16  Ibid, Q1 Back

17  Ibid, Q13 Back

18   See for example Q42 [Mr Hadjipavlou]; Qq44, 45 [Mr Lawrence]; Q164 [Ms Hall]; Local Government Association (PPC 11); DrugScope (PPC 12)  Back

19   See for example Q42 [Mr Hadjipavlou] Back

20   Ministry of Justice, Breaking the Cycle: Effective Punishment, Rehabilitation and Sentencing of Offenders,
Cm 7972, December 2010, andMinistry of Justice, Punishment and Reform: Effective Probation Services,Cm 8333, March 2012  

21  Justice Committee, Eighth Report of Session 2010-2012, The role of the Probation Service, HC519-I, paras 228 and 229.  Back

22   The Government wishes short-sentenced prisoners to serve their entire sentence in these establishments and longer sentenced prisoners to be in them for the last three months of their sentence. All women's prisons will become resettlement prisons. Back

23   The purposes of sentencing are set out in the Criminal Justice Act 2003, section 142 Back

24  PPC 31 (Napo) Back

25   See e.g. Q5 [Mr Hadjipavlou] Back

26   Q8 [Mr Monkhouse]; Q30 [Mr Lawrence]; Criminal Justice Alliance (PPC 06); Probation Chiefs Association (PPC 07); DrugScope (PPC 12); Prison Reform Trust (PPC 13); Howard League (PPC 16); Magistrates' Association (PPC 17); Rob Allen (PPC 21); Mr Underhill (PPC 23)  Back

27   Q8 [Mr Monkhouse]; Q38 [Mr Hadjipavlou]; Mr Underhill (PPC 23)  Back

28   Qq3, 24 Back

29   Probation Chiefs Association (PPC 07) Back

30   Q8 Back

31   Q38 [Mr Hadjipavlou]; Q113 [Mr Gash]; Q114 [Mr Eccles]; Probation Chiefs Association (PPC 07); DrugScope (PPC 12); Prison Reform Trust (PPC 13); Criminal Justice Alliance (PPC 06) Back

32   Centre for Court Innovation (PPC 10) Back

33   For example, facilities management and waste management Back

34   Qq113-114. The Institute for Government had devised a series of tests to establish the validity of public service outsourcing under various scenarios. Probation scored highly in terms of difficulty on most tests. Back

35   Q113 Back

36  In 2012, Serco and London Probation Trust were awarded a £37m four-year contract to supervise offenders in the capital on probation doing unpaid work in the community (Community Payback). The project, which has been in operation for 15 months, has similarities with the model for Transforming Rehabilitation as the Trust retains responsibility for public protection. The 40% savings figure advanced by the Secretary of State has been questioned: see Probation officers face social media gag as outsourcing row rumbles on, The Guardian,21 March 2013, downloaded 10 January 2014 Back

37   Q4 [Mr Lawrence]; Napo (PPC 31). The MoJ's electronic monitoring contracts with G4S and Serco ceased following investigations into overcharging.  Back

38   Oral evidence taken on 27 February 2013, HC (2012-13) 964, Q11. When we spoke to him again in December he clarified that he was confident that costs could be brought down. See Q179.  Back

39   Napo (PPC 31) Back

40  PPC 33 (Ministry of Justice) Back

41  Justice Committee, Eighth Report of Session 2010-2012, The role of the Probation Service, HC519-I, para 211 Back

42  It was intended that the Probation Trusts involved would form joint ventures with private providers. Operationally, external providers would run these ventures and deliver rehabilitation services to offenders. Six pilots were cancelled: two prison based pilots at HMP Leeds and HMP High Down; two probation pilots in Wales and the West Midlands, and two community based innovation pilots. Back

43  Final results will not be available until this year. See Ministry of Justice, Interim reconviction figures for Peterborough and Doncaster Payment by Results Pilots, June 2013. Back

44   Qq21, 31 Back

45  Some of the ongoing pilots took a broader justice reinvestment approach: they aimed to incentivise local statutory partners to reduce demand on courts, legal aid, prisons and probation and, consequently, reduce the costs on the justice system. We will consider these more fully in our final report on the crime reduction inquiry. Back

46   Qq30, 39 [Mr Lawrence]; Criminal Justice Alliance (PPC 06); DrugScope (PPC 12); Prison Reform Trust (PPC 13); Howard League for Penal Reform (PPC 16); Magistrates' Association (PPC 17); Mr Allen (PPC 20); Mr Underhill (PPC 23); Ms Lawrie (PPC 28); Mr Michael (PPC 30); Napo (PPC 31)  Back

47   Q113 [Mr Chambers]; Mr Oliver of 3SC similarly viewed the community-based pilots as "uninvestable" and "unworkable". See Qq42-3. Back

48   See for example Q13 [Mr Hadjipavlou]; Q114 [Mr Eccles]; Criminal Justice Alliance (PPC 06); Probation Chiefs Association (PPC 07); DrugScope(PPC 12); Prison Reform Trust (PPC 13); Howard League for Penal Reform (PPC 16); Mr Allen (PPC 20); London Councils (PPC 21); Mr Underhill(PPC 23)  Back

49  PPC 14 (Ministry of Justice) Back

50   National Offender Management Service, Intermediate outcomes of mentoring interventions: a rapid evidence assessment, October 2013 Back

51  Q181 Back

52   DrugScope (PPC 12); Q114 [Toby Eccles]; Q114[Tom Gash]; Prison Reform Trust (PPC 13); Clinks (PPC 27);Napo (PPC 31); Probation Chiefs Association(PPC 06); Q153 [Sue Hall]; Q153 [Mr Cox; Ms Hall] Back

53   Q114 Back

54  Ibid. Back

55   Oral evidence taken on 27 February 2013, HC (2012-13) 964, Q4 Back

56   Q178 Back

57  Ibid. Back

58   Ministry of Justice, Transforming Rehabilitation: a strategy for reform, Cm 8619, May 2013, p 33 Back

59   Oral evidence taken on 22 October 2013, HC (2013-14), 725, Q25 Back

60   Q184 Back

61   In its absence we have drawn on a reported leak of the initial Ministry risk register in an article in the Guardian and the joint Probation Chiefs Association and Probation Association risk register, as well as our evidence of the various risks of the reforms. Back

62   The Updated Offender Rehabilitation Bill impact assessment explains that in addition to extending support those sentenced to less than 12 months, the Bill will also extend the supervision period for offenders released after serving custodial sentences of 12 months to ensure that all offenders will be subject to at least 12 months of statutory rehabilitation after release. Back

63   Ministry of Justice, Updated Offender Rehabilitation Bill Impact Assessment, June 2013 Back

64   The probation budget for 2011-12 was £821 million Back

65   See Ministry of Justice, UK-London: services related to the detention or rehabilitation of criminals - Prior Information Notice, May 2013. The costs of the National Probation Service will be in addition to this. Back

66   Q168 [Ms Hall]; Ministry of Justice (PPC 35)  Back

67   The Guardian leaked risk register estimated 2000 computer packages would need to be rationalised. See Privatising probation service will put public at risk, officials tell Grayling, The Guardian, 24 June 2013 Back

68   Qq189-190 Back

69   Ministry of Justice (PPC 35) Back

70   Criminal Justice Joint Inspection, Third Aggregate Report on Offender Management in Prisons, December 2013 Back

71   HC Deb, 17December 2013, col 603 Back

72  Privatising probation service will put public at risk, officials tell Grayling, The Guardian, 24 June 2013 Back

73   Qq179, 187 Back

74   Oral evidence taken on 27 February 2013, HC (2012-13) 964, Q28 Back

75  The summary of theUpdated impact assessment for the Offender Rehabilitation Bill acknowledges that: "There will be court costs associated with breaches of this provision, and costs of providing sanctions for these breaches. These may include additional pressure on the prison population arising out of offenders being recalled to custody."It does not specify or cost the volume of increase in the prison population anticipated. Back

76   Q7 [Mr Monkhouse]; Q22 [Mr Oliver]; Q146 [Mr Gash] Back

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Prepared 22 January 2014