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Prison service made 'common mistakes' in its first outsourcing efforts

07 February 2020

Details of the report on the outsourcing of services by Her Majesty's Prison & Probation Service (HMPPS) have been released by the National Audit Office (NAO).

After outsourcing services to Amey and Carillion in 2015, it had expected to make savings of £79m but "failed to achieve these", said the NAO, which provided a number of reasons for the failure.

These included an "inaccurate and incomplete understanding of its assets, their condition and required services".

One of the recommendations of the PFM Editorial Advisory Board has been for more intelligent procurement of FM services, including a complete understanding of each facility and estate and what is required to maintain it and meet all future objectives.

HMPPS had also failed to carry out sufficiently robust due diligence and "severely underestimated" costs for dealing with vandalised  and failing assets.

One of the results of its failures was paying out more than £160m in the 2018/19 financial year against a predicted sum of £17.7m, which meant that extra costs of £142.6m were paid.

The two companies' performance has been monitored by HMPPS since services were outsourced five years ago and the NAO said Carillion provided a "poor and highly variable" response prior to its demise in January 2018.

Although Amey had been found to have missed some of its key performance indicators (KPIs), it was seen to have performed at a better level than Carillion and had continued to improve.

The NAO said the errors committed by the HMPPS in its attempt to outsource its service and save money were due to the "common mistakes made in first-generation outsourcing" that have been made by other organisations.

HMPPS is now faced with funding major repairs to more than 40% of UK prisons over the next three years, said the NAO, with the cost estimated at £900m.

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