3.8 To maintain a competitive market, it is in the interests of the Commissioner for Correctional Services that the private sector remains committed to prison provision. PFI contracts, which are awarded after a competitive tendering process, provide a long-term incentive to the private sector in the form of a steady stream of income over their lifespan, usually 25 years. A privately-managed prison is operated under a contract for a fixed 10-year period.27 After this period, the incumbent has to compete in order to win a further contract. There is a risk that with the recent return of Blakenhurst and Buckley Hall to the public sector, the private sector could become disenchanted with the use of the contract system. As Premier pointed out to us, if a private company finds itself with just one prison to manage because it has lost contracts through market testing, then the company may not think it worthwhile to carry on in the sector.
3.9 The competitive market has been beneficial to the Prison Service as it allows the performance of public prisons to be assessed against that of alternative providers. There is now so much data available on prison performance that it is inevitable that public prisons will be compared to PFI prisons, whatever concerns there may be regarding the accuracy and reliability of the performance measurement systems. Such comparisons occur when prison Governors hold meetings with their senior managers and discuss issues such as their KPT performance and their position within the weighted scorecard. Similar comparisons are made at meetings hosted by the Area Manager. This acts as an incentive for public-sector prisons to improve performance by benchmarking themselves against the best prisons.
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27 The early privately managed contracts were for five years, but with options to extend for three further three-year periods.