Urgent need for improvement
That’s the verdict of the Public Accounts Committee (PAC) in today’s (21 March 2018) report on “Government contracts for Community Rehabilitation Companies”.
Here’s the report’s summary in full:
More than three years into its seven year contracts with Community Rehabilitation Companies (CRCs), the Ministry is a long way from delivering the ‘rehabilitation revolution’ it had promised. In 2017, the Ministry was forced to adjust its contracts with CRCs because it pushed through its reforms too quickly and failed to anticipate foreseeable consequences. The volumes of work paid for under the contracts has dramatically reduced, meaning that CRCs have not invested in probation services. The quality of rehabilitation services has suffered as a result and is undermining the objectives of the reforms.
The Ministry accepts that the CRC contracts were plainly not working as intended and has agreed to pay them up to £342 million more of taxpayers’ money. But the Ministry could not explain what it is getting back for this extra commitment. Despite this bailout, 14 out of 21 CRCs are still forecasting losses. This raises concerns about the potential for contracts, or providers, to fail. One provider, Interserve, has issued two profit warnings. As a company with multiple contracts across government this is particularly worrying in light of the collapse of Carillion.
The future income of CRCs will increasingly depend on their ability to reduce stubbornly high reoffending rates. While there has been a modest decrease in the number of re-offenders since CRCs were introduced, 19 CRCs have not met their targets for reducing the frequency of reoffending. These disappointing results raise questions about whether the current arrangements will be able to deliver the promised benefits before the contracts expire in 2021–22. The Ministry urgently needs to make sure CRCs improve the quality of the services they provide and deliver on their promises of innovation to achieve the improved outcomes that offenders and communities so desperately need.
Conclusions & Recommendations
The committee makes six key conclusions and linked recommendations which are set out below.
1: Financial insecurity
The Committee is concerned that most CRCs are not financially sustainable and is not convinced that they will improve the quality of services they deliver despite the additional £342 million. It requires the MoJ to:
update the Committee by the end of April 2018 about the financial stability of providers, particularly following profit warnings issued by one provider, and set out any further changes it intends to make to get its rehabilitation revolution on track to ensure the prime goal of reducing offending is actually achieved.
2: Lack of investment
The Committee criticises the MoJ’s failure to pilot TR and says this has led to CRCs not investing in probation services which have suffered as a result. It requires the MoJ to:
explain how it will ensure any future changes to the contracts of this scope and scale are well thought through and piloted to minimise damaging unintended consequences.
3: Third Sector
PAC notes that the MoJ has still not delivered on its commitment to ensure that the third sector can help improve rehabilitation services and requires the MoJ to publish a gap analysis of rehabilitation services which could be addressed through greater involvement of the sector.
4: IT Systems
The Committee says it is unacceptable that almost half way through their seven year contracts with the Ministry of Justice, CRCs are not yet able to link their ICT systems to HM Prison and Probation Service. PAC expects this linkage to be complete by July this year.
5: Performance management
The Committee is angry that MoJ has still not published performance indication for 5 of its 24 indicators and describes overall performance as “woeful”. It requires the department to:
explain its rationale for changing how CRCs’ performance is measured and set out when it expects CRCs to be achieving their new targets.
6: Value for money
PAC says it is not clear what MoJ got from CRCs in return for the additional £342 million and says it wants reassurances that this funding is being invested in frontline services and to recoup the £9 million it is owed by CRCs.