1.3 Broadly there are three other sets of circumstances under which the Prison Service may make deductions from the unitary payment:
■ unauthorised overcrowding of cells, (for example, holding two prisoners in a cell designed for one);
■ fixed deductions for specific incidents, such as an escape; or
■ where the contractor has exceeded a contractually-agreed threshold of penalty points for poor performance in providing facilities management and other support services.
Financial deductions vary between the PFI contracts. For example, under the contract for Lowdham Grange, an escape incident, regardless of the number of prisoners who escape, will result in a fine of £50,000 (0.4 per cent of the annual payment) as compared to a fine of £60,000 (0.5 per cent of the annual payment) under the Rye Hill contract. Under the first two PFI contracts, Altcourse and Parc, escapes, other than Category A escapes, are not dealt with as separate incidents but form part of the performance point system.
1.4 Each contract sets out 30-40 performance measures and the number of points which each incident will attract. The more serious an incident, the higher the number of points. For example, an incident involving a Class A drug such as heroin may result in the loss of ten performance points. An incident involving a non-Class A drug such as cannabis may result in one performance point. A selection of contractual performance measures is set out in Figure 8.
1.5 At the end of a set period, usually either a year or a quarter, the accrued number of performance points is compared to a contractual baseline total. The inclusion of a baseline in the contract recognises that for a complex and demanding contract of this kind, total compliance would require a much greater level of resources than would normally be needed to meet contractual obligations. Where the number of performance points is greater than the baseline total, the contract sets out by how much the unitary payment should be reduced. The baseline total is determined by the fixed number of available prisoner places but varies according to the amount of overcrowding. The individual performance measures, the baseline totals and the equivalent cost of each performance point in excess of the baseline vary between each PFI contract. If all places are available but performance in other areas is poor, the maximum amount that can be deducted is capped at 5 per cent of the payment due in each quarter6.
8 |
| A Selection of PFI Contractual Performance Measures | |
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| Performance measure | Performance Penalty Points per incident |
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| Failure of security procedures | 5 |
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| Key/lock compromise | 50 |
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| Items smuggled in | 20 |
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| Assaults against prisoners or staff member | 20 |
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| Incident of roof climbing | 5 |
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| Failure to ensure prisoners see health care staff on arrival | 1 |
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| Failure to comply with cleaning schedule | 2.5 |
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| Delivering programme hours of < 95% of contract standard | 5 |
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| Delivering programme hours of < 75% of contract standard | 10 |
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| Delivering programme hours of < 50% of contract standard | 25 |
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| Source: National Audit Office analysis of the PFI contracts | |
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6 This was a feature of many of the early PFI deals and reflected the fact that the only security for debt repayment to lenders is the stream of service payments made to the contractor. Such a cap limits uncertainty about the degree of variation in this income in order that third party debt can be obtained competitively to finance the service, but does not include deductions for non-availability or fines outside the penalty points system for escapes. Should there be a persistently inadequate level of service then the contractor would be in default and at risk of losing its invested equity should the contract be terminated.