Probation Service reforms carry significant risks
20 May 2014
The Public Accounts Committee publishes its reports on Probation and Criminal Justice System.
- Report: Probation: Landscape Review
- Report: Probation: Landscape Review (PDF 2.3 MB)
- Report: Criminal Justice System
- Report: Criminal Justice System (PDF 3.7 MB)
- Public Accounts Committee
The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts, today said:
"The Ministry of Justice’s reforms to the Probation Service carry significant risks.
It intends to introduce new private and voluntary sector providers, bring in a payment by results system, create a new National Probation Service and extend the service to short-term prisoners, all in a very short period of time.
We recognise that the reform programme is still developing, but the scale, complexity and pace of the changes are very challenging, and the MoJ’s extremely poor track record of contracting out – such as the recent high-profile failures on its electronic tagging contracts – gives rise to particular concern.
The Ministry intends to pay Community Rehabilitation Companies by a combination of payment by results and fee for service. This is complex, untested and remains subject to agreement with providers.
The Ministry must ensure that the new contracts contain open-book accounting arrangements and allow the National Audit Office full access to contractual information, so that we can follow the taxpayers’ pound and be assured that value for money is being served and contractors are not gaming the system as has happened in the past.
The supervision and management of offenders is an essential public service that must be maintained in the event of a supplier failing or withdrawing from the contract. The Ministry pointed to the existence of the National Probation Service as a provider of last resort, but could not provide details of its contingency plans as commercial negotiations are still in progress.The provision of rehabilitation services will be extended for the first time to those sentenced to less than 12 months in custody, an estimated 50,000 offenders. This represents a 22% increase on the 225,000 offenders managed by the probation service during 2012-13. However the Ministry could not tell us how this significant increase in the case load of probation staff would be managed.
The Ministry must ensure that the current ‘good’ standard of performance is maintained during the transition to new providers and the increase in offender numbers.
The new arrangements have not been fully piloted and the Ministry expects the new National Probation Service and the 21 Community Rehabilitation Companies to begin operating from 1 June 2014, allowing only a limited opportunity for parallel running of the new arrangements during April and May 2014.
We therefore welcome the Ministry’s commitment to only proceed at each stage of the programme if it is satisfied it is safe to do so and that value for money will not be jeopardized.
The Committee also looked across the wider Criminal Justice System. We identified a number of weaknesses that have persisted for far too long and which cause delay and inefficiency, and serve to undermine public confidence.
The Departments responsible (Home Office, Ministry of Justice and the Attorney General’s Office) are struggling to ensure the smooth passage of criminal cases through the System. A quarter of trials are cancelled or delayed because of late decisions by Prosecutors or Court managers.
Also the quality of police case files is poor and getting worse. In 2011 around half of police files given to the CPS did not give an adequate summary of the case, rising to 63% in 2013. The Criminal Justice Board needs to monitor performance and drive consistent standards, so they can identify the poor performers and take action where necessary.
Collaboration between police forces undoubtedly improves efficiency. However, cooperation is voluntary, and the present level of collaboration is at best patchy across England and Wales. There is far more scope for good practice examples to be shared and replicated.
The remarkably slow progress in improving IT systems over the last decade means there are still too many disparate systems which fail to operate together. There are some 2,000 IT systems in use in the police service, and the Metropolitan Police alone uses over 300. The Departments need to set a clear vision for future IT with a timetable for how different initiatives will come together to provide a coherent and seamless case management system.
The Home Office, Ministry of Justice and Crown Prosecution Service have made some efforts to improve efficiency, but these are taking place against a background of reduced resources and staffing, and progress in addressing the key problems remains disappointingly slow."
Margaret Hodge was speaking as the Committee published its 58th and 59th Reports of this Session which, on the basis of evidence from Dame Ursula Brennan (Permanent Secretary, Ministry of Justice), Mark Sedwill (Permanent Secretary, Home Office), Alison Saunders (Director of Public Prosecutions), Peter Lewis (Chief Executive, Crown Prosecution Service) and Sarah Payne, Antonia Romeo, Michael Spurr and Nick Brown (National Offender Management Group, Ministry of Justice), examined the subjects of the Criminal Justice System and Probation.
Probation: Landscape Review
Summary
The Ministry of Justice (the Ministry) is implementing wholesale changes to how rehabilitation services for offenders are delivered in England and Wales on a highly ambitious timescale. It intends to introduce new private and voluntary providers, bring in a payment by results system, create a new National Probation Service and extend the service to short-term prisoners in a very short time period. This is very challenging and this report sets out a number of risks that need to be managed. We recognise the reform programme is still developing but there are evident risks arising from both the scale and pace of the reforms. The new arrangements and structures have not been fully piloted and the Ministry has a poor track record of procuring services. We, therefore, welcome the Ministry’s commitment to only proceed at each stage of the programme if it is satisfied it is safe to do so and that value for money will not be jeopardized.
Conclusions and Recommendations
The probation service in England and Wales supervised 225,000 offenders in our communities during 2012-13, at a cost of £853 million. The service is currently delivered by 35 Probation Trusts which are independent Non-Departmental Public Bodies, reporting directly to the National Offender Management Service. As part of the Ministry’s Transforming Rehabilitation reforms, the Trusts will cease to operate from 31 May 2014 and will be abolished shortly afterwards, to be replaced by a National Probation Service and 21 Community Rehabilitation Companies. The Ministry anticipates that savings generated by the reforms will allow the provision of rehabilitation services to be extended for the first time to an extra 50,000 offenders sentenced to less than 12 months in custody.
The scale, complexity and pace of the reforms give rise to risks around value for money which need to be carefully managed. We welcome the Accounting Officer’s assurances that the Ministry will not proceed with the arrangements unless it is safe to do so. The Ministry expects the new National Probation Service and the 21 Community Rehabilitation Companies to begin operating from 1 June 2014 with only a limited opportunity for parallel running of the new arrangements during April and May 2014. The movement of staff, records and implementation of the arrangements required to make the new structures operate are ongoing. Initially the Community Rehabilitation Companies will be in public ownership pending a share sale, expected in time to launch a payment by results mechanism in 2015. The Ministry told us that it remains on track to deliver the proposals on the current timetable.
Recommendation: The Ministry should set out the key review points it will use to assess whether it is safe to progress to the next stage of the programme and report the basis on which, should it decide to do so, it considers it safe to proceed.
The Department must ensure that the current standard of performance is maintained during the transition to new providers and the increase in offender numbers to be covered by the reformed service. During 2012-13, the performance of all Probation Trusts was assessed by the Ministry as either ‘good’ or ‘exceptional’. The Ministry anticipates that savings generated by the reforms will allow the provision of rehabilitation services to be extended for the first time to offenders sentenced to less than 12 months in custody. The 50,000 offenders involved represent a 22% increase on the 225,000 offenders managed by the probation service during 2012-13, which will result in a significant increase in the case load for probation staff. The Ministry was unable to articulate exactly how the additional caseload will be managed, but believed it would be achieved as a result of structural changes and from new ways of working. The Ministry will need to avoid repeating mistakes which we have already highlighted in a previous Committee report.
Recommendation: The performance of the current probation service should be the benchmark against which the reformed service is judged. The Ministry should set clear performance metrics for the new systems, both during the transition process and beyond, and monitor performance to ensure a satisfactory service is maintained.
The Ministry’s poor track record of managing procurements and contracts raises particular concerns given the scale and ambition of this programme. The Ministry recognises that its performance in managing procurements and contracts has been poor, with the failures revealed in its electronic tagging contracts and the contract for providing interpreters to the Courts. The Department is addressing this through wider changes to contract management procedures, for example by bringing in better equipped people on short-term contracts who are commercially focused to manage the contracts effectively. The Ministry is recruiting and training staff who can manage contractors and contracting over the long term. The Ministry maintained that appropriate weight will be placed on assessing the quality of the bids received and the organisations putting them forward. Contracts will be designed to prevent Community Rehabilitation Companies changing ownership without prior discussion with the Ministry and contingency arrangements are being considered to ensure that continuity of service will be maintained during the procurement and after the sale of the Community Rehabilitation Companies. The Ministry also plans to apply the lessons from past PAC reports and ensure that contracts have appropriate penalty clauses up to and including termination for non-performance.
Recommendation: The Ministry needs to apply best practice in all aspects of contract design, bid evaluation and contract management and be able to demonstrate that it has learned the lessons from previous contracts.
The supervision and management of offenders is an essential public service that must be maintained in the event of a supplier failing or withdrawing from the contract. The supervision and management of offenders is a vital public service. The Ministry acknowledges the importance of contingency planning for a supplier collapsing or prematurely leaving. As commercial negotiations were in progress when we took evidence the Ministry was unable to share the specifics of its plans in this area, but it pointed to the existence of the National Probation Service as a provider of last resort alongside the new companies.
Recommendation: The Ministry must establish a clear mechanism for identifying suppliers at risk of failing or withdrawing from their contracts that includes setting out what action it will take in these circumstances to maintain an adequate service.
The proposed mechanism for paying Community Rehabilitation Companies by results is quite complex, untested and remains subject to agreement with suppliers. Payments to providers will comprise two elements: a fee for service and payment by results. Payment by results will be on the basis of achieving statistically significant reductions in reoffending against a baseline. Over the life of the contract the fee element will reduce to maintain pressure on providers to focus on reducing reoffending to maintain income streams by increasing their payments for results. The proposed payment mechanism has been reviewed by consultants and by some probation staff, albeit not in an operational environment. The Ministry is seeking to address risks by including open book provisions in the contracts with providers, but these are subject to commercial negotiation.
Recommendation: The Ministry should set out how it intends to satisfy itself that the proposed payment mechanism is workable. As we recommended in our recent report on contracting out public services, the Ministry must include open book accounting arrangements and ensure that they are used effectively. We would also want the NAO to have full access to contractual information that is relevant to assuring Parliament that value for money is being served in these contracts.
The Ministry told us that it expected to make savings by creating a new Probation Service. However, the Committee will wish to return to an examination of the new arrangements to ensure they haven’t resulted in more bureaucracy and additional demands on managing offenders.
The Criminal Justice System
Summary
The Criminal Justice System is complex and to operate effectively relies on numerous interdependencies between the different bodies involved. There are weaknesses in the System which have persisted for far too long and which cause delay and inefficiency, and serve to undermine public confidence. One example is the failure to ensure the right information is available in case files, where the quality has consistently worsened; another is that a quarter of trials are cancelled or delayed because of late decisions by one or more of the agencies involved. The Home Office, Ministry of Justice and Crown Prosecution Service have made some efforts to improve, but progress in addressing the key problems remains disappointingly slow. Crime has fallen but the Departments gave little evidence linking this improvement to their actions, and while both crime and police officer numbers are down, prison numbers have remained static over the same period. The Departments’ efforts to improve efficiency are taking place against a background of reduced resources and staffing, and a prison population twice as high as 20 years ago. The Departments are struggling to: improve the smooth passage of criminal cases through the System; achieve greater collaboration and efficiency between criminal justice organisations at local level; and improve the use of new technology for sharing information.
Conclusions and Recommendations
The Criminal Justice System is overseen by the Home Office, the Ministry of Justice (the Ministry) and the Attorney General’s Office, which oversees the Crown Prosecution Service (‘the Departments’). The System encompasses the police, prosecution, courts, prison, youth justice and probation services. Its objectives include: reducing crime and reoffending; punishing offenders; protecting the public; and increasing public confidence. In 2012-13, total expenditure by central government was some £17.1 billion; but the estimated social and economic cost of crime is much greater, with organised crime alone costing at least £24 billion each year. The System is currently undergoing comprehensive change, designed to improve the aspects the government considers do not work well and to help make significant cost savings. The White Paper Transforming the CJS, published in June 2013, set out a two-year programme of reform and contained a 64-point action plan. The White Paper recognised that the System remained cumbersome and slow, contained too many complex procedures and archaic working practices, and that there was a need for better collaboration between the bodies involved.
The Departments need to demonstrate a clearer link between their actions and the recent reduction in crime. The Departments’ explanation for why crime has been falling since the 1990s focussed on wider social, technological and economic changes. The Home Office cited, for example, cars now being less vulnerable to theft because of improved design, and there being fewer crack and heroin users, who are becoming an aging group. It is unclear, however, to what extent the Departments’ own actions have influenced the fall in crime. The Departments gave us little assurance over detailed progress on their June 2013 action plan, other than to say they were “on track”. The effects of the action plan on outcomes for crime and justice remain unclear as several of the completed actions were merely commitments to investigate a subject rather than acting to achieve a specific outcome.
Recommendation: The Departments should:
- Write to us in six months to update us on their progress against the 2013 White Paper action plan.
- Undertake the research necessary to understand better the impact of their interventions on the fall in crime, to enable them to target their activity to maximum effect.
- Greater strategic alignment at top level is not matched at the front line. The Criminal Justice Board, which is responsible for setting the direction for how criminal justice partners should work together and for coordinating activity, is chaired by a joint Minister situated in both the Home Office and the Ministry of Justice. But at ground level better efficiency and effectiveness is dependent on voluntary cooperation and coordination. We noted poor collaboration at a local level; for example, Crown Prosecution Service representatives have too often failed to collaborate in local co-ordination efforts. The Departments’ ability to persuade local participants to act in the wider interests of the whole System is constrained by the emphasis placed on the independence and separateness of the agencies, because of the different roles within the System of the police, prosecutors and judiciary.
Recommendation: The Departments need to develop their understanding of the interdependencies throughout the Criminal Justice System, communicate expectations to all and apply good practice at all levels.
Collaboration between police forces undoubtedly improves efficiency. There are 43 separate forces in England and Wales, and the Departments are trying to make collaboration the norm. For example, the Norfolk and Suffolk forces are collaborating with back office functions to maintain front-line police numbers, while in both Hampshire and Devon and Cornwall the police forces have pooled their back-office functions with other local emergency services. The Home Office is also developing national frameworks for some functions, such as a shared national air service, led by West Yorkshire police, which the Home Office expects will mean that fewer helicopters will be needed. Collaboration is voluntary and the Home Office cannot compel police authorities to secure better value for money through collaboration. The present level of collaboration is at best patchy across England and Wales, and there is far more scope for good practice examples to be shared and replicated.
Recommendation: The Criminal Justice Board needs to drive better and greater levels of collaboration, recognising that this may take different forms in different areas depending on local characteristics. The Board should understand the range of approaches evolving on the ground, highlight areas of inertia and use its levers and influence to promote best practice in them.
The quality of police case files is poor and getting worse. Police case files contain the information that prosecutors need to present evidence to the court and are the starting point for cases System. However, the Crown Prosecution Service confirmed that the poor quality case files they receive from police forces has been a longstanding problem, which has got worse – in 2011 around half of police files did not give an adequate summary of the case, rising to 73% in 2013. The Crown Prosecution Service is working on ways to introduce more standardisation into police reporting, starting with the simplest high volume cases such as street crime and traffic offences. The Crown Prosecution Service expects radical improvement from concentrating on these high volume cases, but was uncertain whether prioritising such cases was at the expense of dealing with others which might be more damaging to the efficient operation of the System.
Recommendation: The Departments should build upon the actions in hand to address poor quality case files. The Criminal Justice Board should set priorities and develop metrics to monitor performance and drive consistent standards, so they can identify the poor performers and target remedial action.
The remarkably slow progress in improving IT systems over the last decade means there are still too many disparate systems, which fail to operate together. Information Technology is particularly fragmented in the police service, where there are some 2,000 IT systems in use, and the Metropolitan Police alone uses over 300. The Departments accepted that sharing information was a fundamental issue, and that the failure to tackle this issue in the past has hindered previous attempts to make the System more efficient. There has been some progress; for example, at the time of our hearing more than 90% of police files had been transferred to prosecutors digitally, compared to none two years ago. However, prosecutors have reported that it takes significantly longer to process work digitally rather than on paper. Furthermore, officials cannot transfer information automatically from the magistrates’ courts to the upper courts, with documents instead having to be copied and transferred either physically or by email. The Departments accepted that mistakes had been made in the past, where taking a big-bang approach has caused them problems. Now they are seeking to advance incrementally, and to join-up systems that already exist, as they try to implement a smooth case management system from offence to probation.
Recommendation: The Departments need to set a clear vision for future IT with a timetable for how different initiatives will come together to provide a coherent and seamless case management system.
The Criminal Justice System is too reliant on a small number of large suppliers, and is missing the opportunity to fully exploit what markets can offer. Contracts let by the Departments have been too large and complex for most companies to succeed. Small and Medium Enterprises (SMEs) face serious barriers to entry, such as the bidding costs and protracted tendering processes. In contrast, large companies such as Serco and G4S hold major contracts across the Departments’ activities creating the problem of over-dependency on a small number of contractors who could become too big to fail. The Departments have done some work to encourage wider groups of suppliers to participate, including by breaking contracts into smaller lots, by advertising opportunities to supply government more widely, and by running events to raise awareness amongst SMEs. The Departments also acknowledged that they need stronger contracting and commercial management skills in their organisations; the Ministry of Justice, for example, is planning to use contract specialists to advise it on the types of skills it needs, so it can train its staff accordingly.
Recommendation: The Criminal Justice Board should be able to demonstrate by its actions and choices that it has created a mixed market of suppliers. Contracts should therefore be framed in a way that creates genuine opportunities for a broad range of suppliers, including SMEs, to participate.