Prison tenders produce cost savings model

09 November, 2012

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9 November 2012 | Anna Reynolds

A new model to drive cost savings across the entire UK prison estate has been developed by the public sector in collaboration with private firms Mitie and Working Links in bids for service contracts to operate eight prisons.

The bid was not shortlisted for the next stage of competition, however, the Ministry of Justice (MoJ) plans to roll out the model of public and private sector collaboration across the entire prison estate for prisons run by the public sector in England and Wales.

Under the proposed model, the public sector will provide the core custodial work while the maintenance of facilities will be outsourced to the private sector. A spokesperson for the MoJ said: “This will create one single procurement exercise for the entire estate.”

By contracting out maintenance services, significant cost savings are expected to be found within plumbing and heating maintenance. The MoJ has estimated these changes will generate £450 million savings over the next six years.

Secretary of State for Justice Chris Grayling said: “The cost of running our prisons is too high and must be reduced. We can do this by being more innovative and efficient, and without compromising public safety.

“That is why I have decided to take a new approach to how we compete prison services and reduce unit costs across the prison estate that will lead to better value for the taxpayer, linked to more effective services to reduce reoffending.”

Three bidders - Sodexo, Serco and MTC/Amey – have been shortlisted for the next stage of the competition for the contracts of HMP Northumberland (consisting of the former HMPs Castington and Acklington) and the South Yorkshire group of Moorland, Hatfield and Lindholme prisons. The MoJ said the bids produced particularly strong value for money and cost savings.

However, the MoJ has scrapped the competition to run Coldingley, Durham and Onley prisons, with bidders not meeting the benchmark set by the public sector for delivering cost reduction, improvements to the regime and a working prisons model. There are no plans to continue the bidding process.

In addition, HMP Wolds will return to public sector management, when the contract currently held by G4S expires in July 2013. There are currently 13 private sector prisons in England and Wales.





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