Ministry of Justice Adds Probation Services To List of Contracting Failures

Today, another example of the UK public sector news stories slipped out recently just before the “end of term”.

Maybe that was to meet KPIs or agreed deadlines, but maybe it was to avoid too much parliamentary, public or media scrutiny as we entered the core holiday season.

This case featured the Ministry of Justice and the Probation Service, and was the latest in a series of problems relating to the outsourced contracts for probation services which were let in 2015.

Now we’re not ideologically against public sector outsourcing by any stretch of the imagination. But it should always be driven by hard “business” reasons rather than ideological belief - a blind faith that the private sector can always do things better than the public. Outsourcing to reduce the power of public sector unions is another usually unadmitted and not very good reason for outsourcing; and it always looked like some of these drivers were behind this particular programme.

So there have been various issues along the way, and the other day an announcement signalled the end of the programme as it was first designed.   As the FT reported; “The UK is set to tear up private companies’ contracts to run probation services and embark on a comprehensive rethink of supervision for offenders, in a stark admission that reforms introduced just three years ago have gone badly wrong”.

The relatively new Justice Minister, David Gauke, is going to end the payment by results system under which firms were rewarded largely based on whether offenders under their supervision committed more crime. The contracts will be terminated two years early in 2020 and there will be an additional £170 million given to the firms to improve standards and services in the meantime – a reward for failure, the cynics might say.

This was predictable from the beginning to most intelligent observers, in the main because despite the Ministry’s attempt to carry out some sort of limited “market making”, fundamentally they outsourced a service that the private sector providers had no experience in delivering. There was no existing capability sitting on the supply side just waiting to do a great job on these contracts. And the services themselves were and are complex, very sensitive and not at all easy to get right. MoJ also demanded significant cost savings from the process, as this excellent article from Richard Johnson explains.

If there was a view that perhaps the private sector could bring innovation and something different to the table here, it would have been much more sensible to try a pilot, take things slowly and see if the market could indeed provide value.  But no, the ideology seemed to take over, and it had to be a big bang, one that has cost taxpayers huge amounts of money as well.

On top of a series of procurement and commercial problems, from the offender tagging scandal (and the tagging scheme rumbles on from one failure to another, it seems) to the Courts interpreter services and various problems for the Legal Aid agency as they attempt to reform Legal Aid provision, the MoJ is getting a reputation for commercial failures.

It does have more than its fair share of difficult problems to solve, but despite the best efforts of some capable procurement leaders over the years, it has unfortunately not built a reputation for good commercial performance, and probation has simply added to that list. There are plans to "work with the market to design new and improved contracts" according to the government, but of course we may have a Labour government by 2020 - in which case one assumes it will all come back in house!

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