On 29 March 2021 the Justice Committee published its Seventeenth Report of Session 2019-21, Rainsbrook Secure Training Centre (HC 1266).
The Committee published a further Report, Rainsbrook Secure Training Centre (HC 247) on 24 June 2021. The Government’s Response to the 2019-21 Report was received on 13 May 2021 and published as an Appendix to the 2021-22 Report.
The response to the 2021-22 Report is appended to this Report.
The Select Committee recommended:
We seek, in particular, an explanation from the Ministry of why MTC was, early in 2020, granted a two-year extension to its contract to run Rainsbrook when considerable concern had already been raised about the company’s capacity to do so.
1.The original procurement project for the running of Rainsbrook STC ran from 2014 to 2016 and went through all appropriate governance and approvals processes resulting in sign off from the MOJ Investment Committee (Investco) and HM Treasury (HMT). The approved business case was for a five-year contract with the option to extend by a further two years, meaning the overall approvals and budget were agreed for a potential seven-year contract. The opportunity was advertised to the market in this way at the start of the procurement.
2.When deciding to activate the two-year extension option (in 2019), given the pre-existing approvals in place, the requirement for authorising this was via MOJ internal processes. This involved receiving approval from the YCS Operational Management Committee in May 2019 and the MOJ Commercial Capability and Operational Risk Group (CCORG) in November 2019, with the two-year extension formally issued to MTC in February 2020. At this time, whilst performance at the Centre was not at the level we would expect it to be, it was not giving rise to the serious performance concerns which arose much later in 2020. In fact, the most recent Ofsted inspection report at the time of the extension (published November 2018) stated that “Improved judgements in four areas of this inspection reflect steady and determined efforts by the director over the last year to achieve sustained improvements to the care of young people that is provided in the centre.”
3.It should be noted that the recent decrease in the youth custodial population (with the current number of children in custody at historically low levels – 550 children and young people, including 18 year olds, as of April 2021) was not envisaged at the time of the extension; analysis of demand levels for STCs suggested Rainsbrook would be required as part of the strategy to manage this anticipated capacity.
We were told in oral evidence that two improvements notices had been given and financial penalties were, in fact, imposed on MTC for failings at Rainsbrook with one financial penalty in place since May 2019. Were those improvement notices and financial sanctions taken into account when it was decided to extend the contract? How does the Ministry define “significant failings”?
4.As stated at the oral evidence hearing on 9 March, the YCS deducted approximately £270,000 in 2019/20 (May 2019 to April 2020), the majority of which related to insufficient staffing levels. Deductions in the period May 2020 to April 2021, which were approximately £76,000 at the time of the oral evidence hearing, reduced as a result of relief agreed due to COVID-19. As with the May 2019 to April 2020 period, many of these deductions related to: insufficient staffing levels, failures by the provider to fully follow their operating procedures when preventing and/or managing incidents, and failures around some of their maintenance obligations, such as the timeliness of repairs. The two Improvement Notices referred to in the oral evidence session were issued in January 2021 and February 2021. This was after the contract had been extended and related to the provider’s underperformance in addressing recommendations following the Ofsted assurance visit (as per the contractual obligations) and safety concerns at the centre respectively.
5.At the time the two-year extension was activated (November 2019), there was only one Improvement Notice in issue for the centre, which related to maintenance obligations, with no improvement notices in effect at this time with regard to child welfare or safety.
6.Financial sanctions and the one Improvement Notice in place were considered during the process to agree the extension. However, it was assessed that the contract extension was crucial to maintaining operating stability and capacity across the youth secure estate over that period, most notably with regard to girls, with Rainsbrook able to provide a Mother and Baby Unit.
7.In the context of Rainsbrook we consider ‘significant failings’ to relate to serious concerns around child wellbeing and safety. There were no significant failings of this nature in place at the point when the contract was extended.
The response appears to imply that no Minister was involved in signing off the two-year extension. Is that so? If it is, why was there no ministerial involvement? What steps will be taken to involve Ministers in such decisions in future when questions have been raised about a contractor? The Ministry should explain what “internally approved” means, setting out clearly who took the decision to extend the contract.
8.As is referenced above, given the overarching pre-existing HMT and Investco approval, when deciding to activate the two-year extension option internal processes were followed. This is a consistent position across the department, with ministerial approval not required for routine extensions of existing contracts (that is, triggering pre-approved extension options).
9.The contract was let in 2016 on the basis of a five-year fixed term with the option to extend by two years. The provision of this five plus two-year contract option was approved by MOJ Commercial, MOJ Investco and HMT through all appropriate governance processes in 2015-2016. During late 2019, there were no significant performance (or other) factors that indicated this extension would be viewed as exceptional. The decision, therefore, followed the internal MOJ governance processes outlined in paragraph 2.
The extended contract gave MTC until May 2023 to operate Rainsbrook. We invite the Ministry to set out, in detail and including specific figures, what the additional cost was of extending the contract and what, if any, termination costs may now apply. The Ministry should also make clear as soon as possible what the future use of Rainsbrook will be and what is intended to be the Ministry’s future relationship with MTC.
10.The contract cost model continues in the same terms as the original procurement, subject to inflationary indexation. There was no additional cost outside of the initially agreed terms. The activation of the two-year contract extension for services at Rainsbrook STC was a cost of up to approximately £13.9m per annum, or £27.8m over the life of the (two year) extension.
11.We are currently considering the future of Rainsbrook, with a further announcement to be made on this position in due course. All options are being considered and preliminary commercial discussions with the supplier are underway. Given that these commercial discussions and investigations are at a relatively early stage, we are unable to say what the specific termination costs will be, or comment on our future relationship with MTC at this time.
12.As soon as a decision has been made regarding the future of the centre, we will write to you to ensure you are informed of the outcome.