A Statement from PAC Chair on Restructuring the National Offender Management Service

The National Offender Management Service is less than halfway through its cost cutting programme but is already lagging behind its target to curb spending by £884 million before March 2015. This figure must be hit if the Ministry of Justice is to stand any chance of achieving £2 billion annual savings by the same deadline.

I am concerned that the agency has yet to pin down a plan to get back on track. The task has been made even more difficult by the government's choice to limit reforms designed to combat what it describes as 'the unsustainable rise in the prison population'. This decision denies the taxpayer £130 million of potential savings and leaves the agency scrambling to find savings elsewhere.

The agency's fragile financial outlook is at the mercy of events, such as last August's riots, and sentencing decisions of judges and magistrates over which it has little control. Even the slightest changes in the prison population can lead to the agency's plans being further knocked off course. Where it should have control , I am dismayed to discover that the agency has been incapable of holding IT suppliers to their word to fix ailing systems, setting back cost cutting efforts by as much as £35 million.

Without firm plans in place, the agency's ability to deliver required savings remains in doubt. My Committee will want officials to assure us that they can deliver long-term, sustainable reductions in spending without risking failures in the quality of the crucial service they provide to keep our prisons secure and the public safe.