There are three broad areas where structural differences exist between public and PFI prisons. First, the contractual payment mechanism for PFI prisons ensures a consistent level of funding over a 25-year period with a degree of protection against the effects of inflation. In comparison, public prisons have to compete with each other, and other demands on public expenditure, for resources on a three-year cycle. Although the element of inflationary risk which is passed to the contractor, particularly wage inflation, means that it is not possible to state with any degree of certainty that they will be funded more generously than public prisons in the long term, their funding streams will be easier to predict. This makes it easier for private contractors to plan ahead than Governors of public prisons working with annual budgets.
A related issue is that the contract system makes it difficult to erode the agreed standards. For example, the unitary charge in PFI prisons contains an element for ongoing maintenance. Many public sector Governors told us that this was an area which was often cut when there were other demands on budgets. Similarly, changes in the criminal justice system which may have effects on prisons will have to be considered within the contractual framework for PFI prisons and all cost implications carefully assessed. Public prisons, which do not operate under a SLA, are more likely to be expected to reallocate existing resources and balance competing demands. There is a similar effect with the current overcrowding of prisons. Under a contract, overcrowding automatically raises the revenue stream on a marginal cost basis. In the case of non-SLA public establishments, there is an expectation that the prison's core funding is sufficient to operate beyond their certified normal accommodation levels and up to operational capacity35. This highlights the flexibility of non-SLA prisons but also the pressures they are under when dealing with overcrowding and changing priorities.
Second, PFI prisons are all modern buildings often based on new designs. The Prison Service estate includes prisons built in different periods and to radically different designs. For example, prisons such as HMP Chelmsford and HMP Pentonville were built in the early Victorian period to hold large numbers of prisoners on each wing and this dominated prison design for most of the 19th century. Although a number of establishments, such as army barracks, were converted from their original use, new prisons were not built again until the 1950s. The new prisons were radial prisons based on smaller cell blocks. Prisons built in the 1960s consisted of rows of corridors and are generally considered to be poorly constructed. The most modern prisons managed by the public sector, such as HMP Bullingdon and YOI Lancaster Farms were built in the late 1980s and early 1990s. All new prisons built since 1997 are now managed by the private sector.
The age and design of the prison can have a detrimental effect on the extent to which individual prisons can meet current Correctional Services priorities. For example, HMP Pentonville performs very poorly relative to other local prisons on purposeful activity and particularly poorly when compared to local36 PFI prisons. However, Pentonville opened in 1842 and was not originally designed to offer activities to prisoners. There are no workshops and few spare areas where activities can be offered to prisoners without compromising security. Furthermore, the corridors are cramped and not designed for moving large numbers of prisoners around the prison. However, Swansea, originally constructed in 1859, was one of only four public sector prisons to gain a green indicator in the traffic light matrix. Hence maintenance and refurbishment may have a larger impact that the age of the prison per se. Finally, modern PFI prisons use technology such as CCTV and more up-to-date radio equipment which is not generally available to prison officers working in the public sector.
Third, in attempting to provide a full value for money comparison of PFI and public prisons it is necessary to compare their respective costs. There have been a number of recent attempts to analyse the components of the unitary charge paid to PFI prisons and compare it with the costs of public prisons. Academic research has highlighted the inherent difficulties of evaluating the comparative costs of prisons and this is a problem in other countries.37 For example, there can be disagreement over how Head Office costs should be accounted for. The most recent cost per prisoner place figures in the Prison Service Annual Report are provided on a resource account budgeting basis compared to previous years when they were provided on a cash basis. They are not therefore comparable with previous years. The costs in the annual report for PFI prisons include an element for the capital repayment of the prison; they are not therefore comparable with the figures for public prisons.
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35 However, when a public non-SLA prison's operational capacity is increased there is a greater expectation, but no guarantee, that they will get additional funding.
36 Prisons which take prisoners directly from local courts; they are designed to hold prisoners for a short period of time.
37 see, for example, Mcdonald, D.C. et al., Private Prisons in the United States: an assessment of current practice, 1998.