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)
Costs
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)
| 
