12. The performance of the seven PFI prisons against contract has been mixed. All but one have incurred financial deductions for poor performance, 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 have tended to be highest in the first year of operation and generally reduced in the following years. The Home Office intends that in future there will be a much greater link between financial deductions and the performance of the prison.12
13. Comparing the performance of PFI prisons against publicly-managed prisons is difficult because of variations in their age, design and function and because of the different ways in which their performance is measured and targets are set. PFI prisons tend to perform better than public prisons in relation to the Prison Service's decency agenda, such as respect shown to prisoners, and the availability of purposeful activities for prisoners. They tend to perform less well in areas such as safety and security. Indeed, it is unusual for any prison, whether privately or publicly managed, to perform equally well on both counts, indicating that there is a difficult balance to be struck between the two areas of work.13
14. One of the seven PFI prisons, Ashfield Young Offenders Institution, which was opened in 1999, has performed significantly worse than the other six. The Prison Service became so concerned about safety at Ashfield that it put in its own management team for five months in 2002 and moved the young offender population to other establishments. In October 2002, control of Ashfield was returned to the contractor, Premier Custodial Group Ltd, after conditions improved, although an improvement was to be expected as the institution was half empty of prisoners but operating with a full complement of staff.14
15. Premier was in breach of its contract for Ashfield on several occasions. Rather than terminate the contract, the Prison Service had opted to put in public service management to improve the prison's performance. Under the contract, Premier had incurred financial deductions for poor performance and non-availability when young offenders were moved to other institutions. Premier's income was halved but it still had to maintain a full complement of staff, the cost to Premier amounting to £4.2 million. However, it was not only the contractor who suffered losses. Some of the risk of poor performance was borne by the public sector as young offenders had to be redirected to other institutions which were already overcrowded. The Prison Service has made clear to Premier that the prospect of contract termination remains if the improvement in performance is not sustained.15
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12 C&AG's Report, para 5; Q 67
13 C&AG's Report, paras 8, 2.16; Q 87
14 C&AG's Report, para 1.15, Appendix 2