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

Conclusions and recommendations

Extending supervision to short-sentenced prisoners

1.  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 (Paragraph 4)

2.  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 the expense 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. (Paragraph 10)

The evidence base for the reforms

3.  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. (Paragraph 21)

The scale and pace of the reforms

4.  Some of our witnesses were supportive of the 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. Nevertheless witnesses, including some supportive of the proposed changes, had significant apprehensions about the scale, architecture, detail and consequences of the reforms and the pace at which the Government is seeking to implement them. (Paragraph 24)

Assessment of risks

5.  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. (Paragraph 26)


6.  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. (Paragraph 34)

7.  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. (Paragraph 35)

Dual oversight in existing and future practice

8.  Research and professional experience suggest that those being supervised by probation benefit from having a single case manager. The changing dynamics of risk of harm in individual cases also require continuous case management to enable professional and objective assessment to be made, based on a direct relationship with an offender. Whilst under the present system offenders sometimes move between supervising officers much of the evidence we received pointed to there being additional risks over and above the current situation which will be challenging to remedy through contractual specifications. It is essential that arrangements are put in place to ensure very good lines of communication and cooperation between Community Rehabilitation Companies and the National Probation Service. Co-location will certainly help in the short term, but unless that is required through contractual terms there is no guarantee that it will happen in practice over the medium to long term, as the quest for efficiencies leads to the evolution of delivery models and reconfiguration of the probation service estate. It will be important for the Ministry to monitor this aspect of the new operational arrangements particularly carefully.(Paragraph 46)

Local partnerships

9.  Probation is the lead agency in a range of local partnerships. In future there will be two probation services (the new National Probation Service and the contracted provider) in every locality delivering similar services side by side and sometimes via one another. Each will have to form working relationships with other local organisations, bodies and services for the delivery of the joint or complementary services which characterise effective local work with offenders. Ministers should recognise that there is a potential risk that this will lead to inefficient use of resources, and confuse accountability at local level. The Government proposes to give new providers accountability for reducing offending within community safety partnerships by mandating this in contracts and asking prospective providers for clarification of how they will preserve and develop existing partnerships: that is to be welcomed. It is important that Ministers put in place appropriate safeguards to ensure that new providers in the private sector appreciate the importance of working with existing local partnerships to reduce reoffending. We will consider the future prospects for local partnerships further in our final report in this inquiry.
(Paragraph 50)

Transition to the new model

10.  In our 2013 report on ALS and the interpreting and translation contract we concluded that the Ministry did not give sufficient weight to the concerns raised by professional stakeholders, and argued that had it done so, many of the operational problems experienced during the project's implementation could have been anticipated and avoided. It would be extremely unfortunate if the Ministry's desire to see this new tranche of complicated reforms designed and implemented quickly led to a similar situation developing. We have heard compelling evidence that neither Chief Executives nor Trust Boards feel confident that they are ready for the first stage of transition or that their concerns are being listened to.(Paragraph 58)

Agreement with the unions

11.  The explanations of the unions and the Ministry about why they were unable to come to an agreement about terms and conditions for staff under the new model differ. Regardless of what actually occurred, it is important that both sides resolve this difference of opinion through negotiation. It is highly unfortunate that agreement was not reached before NOMS commenced the splitting of staff, but we understand that negotiations on terms and conditions have resumed and we hope that outstanding issues can be resolved swiftly and satisfactorily.(Paragraph 61)

Retention of skills and development of staff

12.  Community Rehabilitation Companies will be managing considerable risk on a day to day basis, yet will not be required to have professionally qualified staff. This is a matter of considerable concern to us. We welcome the creation of a centre of excellence for probation, and we would hope that new providers will support their staff to gain suitable accreditation and qualifications through this Probation Institute. We nevertheless believe that they should be bound by a contractual requirement to have a minimum proportion of qualified probation staff related to the volume and risk levels of offenders supervised and to provide continuous training. This should not inhibit the Secretary of State's desire to enable more ex-offenders to become involved in mentoring offenders currently under supervision, which we support. (Paragraph 65)

The proposed payment mechanism

13.  It is no exaggeration to say that the efficacy of the payment by results mechanism which is finally adopted will be crucial to the prospects for success of the Government's ambitious plans for a reduction in reoffending through a rehabilitation revolution. Serious question marks hang over the design of the PbR mechanism itself, and the proportion of payment to providers which will depend on the results they achieve. It is likely that any model introduced at the beginning of the new system will need to be modified in the light of experience. We will return to the question of the Ministry's preferred model and other potential models of payment by results in our final report in this inquiry. (Paragraph 74)

14.  The introduction of payment by results marks a major shift in the commissioning of rehabilitative services. Few of our witnesses argued with the premise of providers being rewarded according to their performance, but the approach remains novel, and the limited experience of its application, not only in the criminal justice sector but more widely, suggests that it can be beset with many challenges which the Government will need to overcome if it is to be a success.(Paragraph 81)

15.  We note that the Ministry appears receptive to comments on the design of the payment mechanism. In particular Ministers appear to recognise the hazards of providers "parking" the hardest to engage offenders and are considering the most appropriate ways of addressing this. The ultimate design of the mechanism will be vital to the success of the Government's plans, and an ostensibly small change in the payments system could lead to a major change in provider behaviour and hence the outcomes of the programme as whole. In this context, we understand the motivation of Ministers in wishing to seek complete desistance from reoffending as an outcome but the system has to be one which incentivises providers to work effectively with all the offenders for whom they are responsible. We therefore agree with many of our expert witnesses that the binary hurdle should not be retained in the final payment by results mechanism.(Paragraph 82)

16.  We also note with approval that the Ministry has subjected the proposed payment by results metrics to internal testing. It appears to us that officials have appreciated the potential perverse incentives that must be avoided. At the same time, while a "straw man" is of course designed to be knocked down, the degree of criticism encountered by the "straw man" mechanism implies that the extent of restructuring of the mechanism which may be required is extensive, especially taking into account the speed with which the changes are being wrought.(Paragraph 83)

17.  It appears to us that the risk of not achieving sufficient savings relates more to the level of savings that providers are able to achieve to reinvest in extending the reach of existing provision, and the quality of services that might prevail as a result, than the overall costs of the reforms per se. This, and the proposal to revise the payment mechanism to enable providers to receive more of the fee for service upfront in return for taking more risks later on, also suggests that the length of the contracts is the basis on which the Ministry and Treasury have concluded that the numbers will add up. (Paragraph 84)

18.  We consider it important for the overall success of the reshaping of the rehabilitation landscape that the final payment by results mechanism, as determined during the contracting process, should be capable of further refinement and modification in the light of experience. The mechanism, and the metrics which it involves, must in addition remain open to parliamentary and public scrutiny, which must not be deflected by the fact that it is private sector providers who are delivering this essentially public service. The Ministry should explain in its response to this report how it will ensure reliable public accountability of the performance of providers of rehabilitative services under the new model.(Paragraph 85)

Capacity within the private, public, and voluntary sectors to bid as prime providers

19.  We would be extremely concerned if the bidding process for prime providers were to be dominated by the very small number of large businesses which currently hold most of the major outsourcing contracts in the criminal justice system. Thirty bidders have gone through the first stage of the competition process and will be invited to tender. It remains to be seen if this will prove a sufficient number to provide satisfactory bids for a viable service in all 21 contract areas. (Paragraph 94)

Confidence in the tender process

20.  The Ministry of Justice has a questionable track record in procuring quality services when seeking better value for money, most strikingly in relation to the language services contract. It appears that every effort has been made to learn from this but the assessment of quality during a bidding process is notoriously difficult, particularly where new providers are seeking to enter the market. Although the Minister wishes to ensure a balanced consideration of potential bids, an unavoidable consequence of the way this programme is designed is that one element of the competition will be about how cheaply providers can deliver the residual service to enable the maximum resource to be unlocked to "reinvest" in rehabilitative provision for short-sentenced prisoners and others in prison and after their release. (Paragraph 98)

Protection for second and third tier providers

21.  The Ministry of Justice's market stewardship principles are designed to enable smaller organisations to have the confidence to take part in the contracting process so that their skills can be brought to bear in rehabilitation. We will be interested to see how these principles, in particular those related to the level of risk that will be passed down to lower tier providers, will be integrated into the contract management processes as well as the industry standard sub-contracts. It remains to be seen whether prime providers will agree to these as contractual obligations as the competition progresses, and how the Ministry will respond if they do not. It is also not clear to us whether, once the contracts have been let, there will be sufficient incentive for the Department to take appropriate action against the misuse of market power against partner providers or subcontractors. (Paragraph 103)

22.  Witnesses from a range of different perspectives felt that there is a risk that rehabilitation will be lost in the process of change and restructuring. A key question for the Government is how the focus on reducing reoffending will be maintained while the restructuring in the market that is necessary to create efficiencies takes place. There is insufficient detail about the final payment mechanism to determine whether there will be sufficient incentive for new providers to offer initial upfront investment or to reinvest their resources in rehabilitative services.(Paragraph 104)

Probity and corporate renewal

23.  We welcome the Ministry's endeavours to strengthen its contract management and oversight in the light of the electronic monitoring debacle. We will study the report of the internal review, which will assist us to hold the Ministry to account on this aspect of its administration. We also recommend that prior to the next stage of competition under the Transforming Rehabilitation programme the Ministry should publish a statement setting out its expectations of the integrity of prospective providers and the steps it will take in holding bidders to account for the probity of their activities. In our view, this should include greater transparency in their publication of financial and performance data, than has hitherto been the case. We shall return to the question of corporate renewal with the Secretary of State once criminal investigations and any subsequent legal proceedings have concluded. (Paragraph 110)

Contingency planning

24.  It is unclear whether supervision of short-sentenced prisoners for the whole of England and Wales would have to await the successful conclusion of bidding for all areas, and it is unclear what would happen to the programme for supervision of short-sentenced prisoners if one or more areas subsequently had to suspend operation of the contract. This issue must be clarified. (Paragraph 114)

25.  The Ministry has high expectations of what can be achieved in the way of efficiency savings and extension of services through contracting out the management of low and medium risk offenders within existing resources. It seems entirely feasible to us that as the competition progresses and details are refined, the attractiveness of these contracts might wane, resulting in incomplete or inadequate provision in certain areas or types of service. None of the possible contingency plans proposed by the Ministry were very clear to us. (Paragraph 116)

26.  We received evidence about the risk of operational failure during the implementation of the programme. We note the Government's efforts to test the model with shadow state-run companies before contracting these new arrangements out to new providers, but these are regarded by some as artificial conditions. If the Ministry proceeds as planned it must be able to make modifications to all aspects of the system in the light of experience. For example, in drawing up contracts with new providers, we recommend it should ensure the payment by results metrics are open to modification in the event that unforeseen gaming by providers occurs.
(Paragraph 117)

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Prepared 22 January 2014