1.The breakneck speed with which the Ministry introduced the Transforming Rehabilitation reforms created an unacceptable level of risk that was not sufficiently challenged by the safeguards intended to protect the taxpayer. Transforming Rehabilitation was an ambitious programme that contained inherent risks, including combining a ‘black box approach’, using payment by results to incentivise innovation, with extending statutory supervision to offenders sentenced to less than 12 months. The Ministry failed to conduct adequate pilots or to learn sufficiently from similar programmes elsewhere and tied the reforms to a timescale that was undeliverable from the outset. It suffered from optimism bias and gambled on the promises of innovation and it is unacceptable that so many unnecessary risks were taken with taxpayers’ money. The Ministry acknowledges that it implemented its reforms at breakneck speed in order to procure contracts before the 2015 general election. In its haste, it failed to get enough commercial input into its plans. Responding to the problems with these contracts will cost the taxpayer an additional £467 million. Despite the risks involved, the checks and balances for major projects designed to protect the taxpayer, including HM Treasury and the Major Projects Review Group, gave the programme the green light and failed to provide effective challenge.
Recommendation: The Ministry, Cabinet Office and HM Treasury, should write to us by the end of June 2019 to set out what has been done to strengthen the approval and challenge processes both within the Ministry and at the centre of government in response to failed programmes such as this.
2.The Ministry has created an underfunded and fragile probation market and we are not confident in its ability to cope with further provider failure. In September 2016 we warned about CRCs’ increasing dependence on payment by results and the risks to the financial sustainability of CRCs. The Ministry failed to realise that a payment by results model was not appropriate for probation or that reoffending was not a good measure of performance for CRCs. Its system relied on volumes of work which did not materialise, meaning that CRCs were unable to cover the cost of basic probation services let alone invest in innovation. At the outset, the Ministry modelled a 2% reduction in volumes of work but, two years into the programme, volumes were between 16% and 48% lower than anticipated. In February 2019, Working Links and the three CRCs it owned went into administration, requiring the Ministry to transfer these services to Kent, Surrey and Sussex CRC. The Ministry was confident that it or another provider would be able to step in if other suppliers fail, but it is constrained by a cap which means that no provider can own 25% of the market, and the NPS is already dealing with intolerable workloads. Interserve, the owner of five CRCs, went into administration on 15 March and it is unclear what impact this will have on the future of these contracts.
Recommendation: The Ministry should write to the Committee, by the end of June 2019, providing details of its contingency arrangements in the event of further provider failure, and explaining what it is doing to manage this risk as its contracts proceed to termination in December 2020. The Ministry should also provide the Committee with an outline of how it managed the impact of both Working Links and Interserve collapsing into administration.
3.The Ministry will not make sustained progress with reducing reoffending until it can provide the support offenders desperately need on leaving prison, including securing stable accommodation. The reforms failed to reduce reoffending by as much as expected and, from 2011 to March 2017, the average number of reoffences committed by each reoffender actually increased by 22%. The number of offenders recalled to prison increased by 47% from January 2015 to September 2018 and the Ministry acknowledges that it is a long way from getting post-sentence supervision right. The Ministry’s Through the Gate (TTG) model has not provided the services it promised and an estimated 2,961 prisoners did not receive TTG services in 2018. Prisons have been releasing prisoners without settled accommodation, with some prisoners having been provided with tents instead. The Ministry does not know how many prisoners have settled accommodation after they leave prison. The cross government Reducing Reoffending Board has met two or three times in its first year but there is little concrete evidence of what it has achieved so far.
Recommendation: The Ministry, working with the Reducing Reoffending Board should report back to this Committee, by the end of June 2019, setting out a cross-government strategy to reduce reoffending, and how it will measure whether this is working.
4.The Ministry failed to involve voluntary sector organisations in delivering probation services on the scale it promised. We warned in both September 2016 and March 2018 that the Ministry was not doing enough to involve the voluntary sector in efforts to improve rehabilitation services. As at October 2018, just 11% of voluntary sector organisations (VSOs) working in the sector provide services to CRCs, and probation trusts spent less than 3% of their budgets on voluntary and third sector provision. VSOs were frozen out of bidding because they were unable to provide the onerous Parent Company Guarantees required to tender for the contracts. The voluntary sector has also become less involved in providing TTG services, resulting in the loss of better-quality specialist services, that had been provided at no cost to the taxpayer. Currently provision of specialist services on mental health, employment and substance abuse is poor and not tailored to offenders’ needs. The Ministry acknowledges that VSO involvement is patchy and it intends to design its new system to have greater input from VSOs.
Recommendation: When it announces its new approach, the Ministry should write to the Committee to clearly explain what role it expects VSOs to play in the probation system, and what it will do to ensure this role is being fulfilled successfully. The Ministry should also outline how it intends to improve its provision of specialist services and how it will tailor these services to the specific requirements of those in need of support.
5.The Ministry’s decision to split the probation service has let down offenders and those working in the justice system. The split of probation services between the NPS and CRCs introduced many new points of contact between different parts of the probation system and with the wider justice system, which create friction and require effort and resource to manage. The reforms split the role of probation services in court, so the NPS provides all advice to courts in a pre-sentence report, while CRCs do not attend court. These arrangements undermine sentencers’ confidence in CRCs which, in turn, is partly responsible for the declining use of community sentences – even though community sentences generally lead to better outcomes for offenders. The Ministry failed to anticipate that changes in sentencing practice would increase caseloads for the NPS. As at September 2018 the caseload split between CRCs and the NPS was 59:41 against an original assumption of 64:36. Combined with severe staffing shortages, this has resulted in intolerable workloads for the NPS. Delays to the Ministry’s ICT gateway to provide a link between CRCs and HMPPS have cost the taxpayer £23 million in compensation to CRCs and only two CRCs are currently using the gateway.
Recommendation: If it persists with this flawed structure, the Ministry should urgently spell out how such a separation of probation service can work effectively and what it will do to address the failings with the current system.
6.If the Ministry does not put into practice the lessons from its failed reform programme it is in danger of repeating the same mistakes again. In July 2018, the Ministry announced that it will terminate its CRC contracts, 14 months early, in December 2020. It has consulted on the future of probation services and plans to procure second-generation contracts in April 2019. It does not yet have a blueprint for its new system. The Ministry has stated that the NAO’s report has provided it with a clear framework of things it must do differently in its new system, and that there was not a single lesson in the report it would not take on board. Despite this, the Ministry has not allowed any more time for its procurement of new contracts than it did last time, although it is working on contingencies that may give it some more time. The Ministry is unable to say whether it will conduct pilots of the new system, conceding that it ‘might’ for some areas.
Recommendation: When it announces its new plans, the Ministry should write to this Committee spelling out exactly how its plans to address the failings set out by this Committee and the NAO, and how it will avoid the same mistakes happening again.
Published: 3 May 2019