The performance of PFI prisons against contract has been mixed

5 Irrespective of whether a prison is publicly or privately managed, the opening period will be difficult for staff and management. All but one of the PFI prisons have incurred financial deductions for poor performance (Figure 5), although the level of financial deductions in themselves do not provide a full picture of performance in a prison. In most cases, the financial deductions tended to be highest in the first year of operation and generally reduced in the following years. The main exception to this is Ashfield, where the level of financial deductions has increased since the prison opened in 1999. The Prison Service took control of Ashfield for five months in 2002, following concerns about the safety of prisoners there. In October 2002, the Prison Service considered that the improvement in performance at Ashfield was such that control could now be returned to Premier Prison Services (Premier). Following a visit in April 2003, the Prisons and Probation Ombudsman concluded that Ashfield was providing custodial care of a good quality. However, he also noted that it was at half of its operating capacity but with a full complement of staff. The Prison Service has made clear to Premier that the prospect of contract termination remains, if the improvement in performance is not sustained.

6  Failure by a contractor will have serious and direct effects on the Prison Service. For example, serious problems at Ashfield resulted in the Prison Service moving the Young Offender population to other establishments and putting its own management team in charge. The contractor will face large financial penalties as a result of the problems at Ashfield but the Prison Service had to take the ultimate responsibility for ensuring that the establishment was safe for the young people held there and for accommodating those who were moved.

7  Prisons constructed and managed under PFI contracts, like those built and funded conventionally, may not be sufficiently flexible in design and operation to respond to changing penal priorities. Negotiating changes through a PFI contract or SLA adds a further level of complexity to this process. For example, there is now a greater emphasis on education and rehabilitation rather than employment in prison workshops, which was a priority when the earlier PFI contracts were let. Furthermore,  the  monitoring  of  each  PFI contract  depends  partly  on  the relationships between the individuals involved. Controllers2 have different approaches to their contract management responsibilities which can affect the level of financial deductions levied on a prison. This was especially the case in the early PFI contracts where renegotiations of the performance penalty points took place as a result of the contractors disputing assessments by Controllers.

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2  Correctional Services employees based in the PFI prison who monitor the contactor's performance.