1.23 The performance of each PFI prison is monitored by an on-site Controller. Controllers are Governor-grade employees and lead a small team of support staff which usually includes a deputy and administrative support. The Controller has two main functions: to adjudicate disciplinary charges brought against prisoners, and to monitor the performance of the contractor against the contract. Up until March 2003 Controllers, who are recruited from the operational part of the Prison Service, were line-managed by the Area Manager. PFI prisons were also part of the Prison Service's area management structure and Directors of PFI prisons reported to the Prison Service operational line through an Area Manager. In most cases the Area Manager was responsible for a number of prisons in a geographical area. The relationship between Controllers, Area Managers and senior staff in PFI prisons was therefore important to ensure consistent monitoring of performance against contract and to support the efficient operation of the prison (Figure 1). Since March 2003, Controllers and the PFI prisons at which they are based have reported directly to the Home Office's Commissioner for Correctional Services.
1.24 The role of the Controller is critical to the effective monitoring of PFI contracts. They need to have sufficient operational experience to adjudicate on prisoner discipline cases, and the skills to understand and monitor the complex contractual relationship between private contractors and the Commissioner for Correctional Services. Their relationship with the senior managers in a contracted-out prison is of fundamental importance.
1.25 Our interviews with Controllers revealed differences in approach to their contract management responsibilities and sometimes different views of their role. To some extent this may be explained by the performance of the particular prison. For example, a well-established PFI prison which has been running well for some time and has good systems in place may need a different approach from a new prison which is having problems at the beginning of the contract. The attitudes of the contractor will also be a determinant of the approach taken by the Controller. We were told that the relationship between Controllers and senior staff in PFI prisons depends to a large extent on the personalities of those involved and, inevitably, some relationships were more constructive than others.
1.26 As a result of being based in an establishment operated by a private contractor, Controllers are relatively isolated from their Prison Service colleagues. Staff in Controllers' teams felt that the job was not one which is widely respected in the Prison Service and were worried this would count against them as their career progresses.
1.27 The Commissioner for Correctional Services recognizes the importance of the role of Controllers and the dangers of them either getting too close to the contractor or, conversely, applying the contract too stringently. The Central Procurement Unit (CPU) considered this latter case to be true of the early contracts and as a result, reduced the size of the financial deductions for Altcourse and Parc in the first year of their operation. The Commissioner also acknowledges that a pedantic approach by Controllers to contract monitoring could create an adversarial relationship between the prison Director and the Controller. Such a relationship would make it difficult for them to work together and consequently would not be in the best interests of the Commissioner for Correctional Services, the contractor or the prison. Alternatively, regulatory capture may occur if the Controller over-identifies with the institution to such an extent that they begin to favour the contractor. This appeared to us to be a significant risk given that the Controller and his small team are the only public-sector representatives in a private sector prison. The Commissioner for Correctional Services proposes to reduce the threat of regulatory capture by introducing new arrangements whereby all Controllers work under an Assistant Director of Contracted Prisons. The idea is to harmonise contract management across this sector through exercises designed to standardise the approach of Controllers to identifying and acting upon practice inconsistent with the contract.