A Step In the Right Direction But Not Enough

This blog was also posted on Social Finance’s blog here

Slowly we are getting to know more about the plans for probation and prisoner rehabilitation reform. We can see that some effort is being made to make the model work better following the consultation but is it enough to allow for a level playfield for all providers to take part? Will it achieve the ultimate goal reducing crime?

The key positive changes are as follows:

  • The whole idea that rehabilitation of prisoners and short sentence prisoners in particular has moved to centre stage and has become a key government policy is terrific and long overdue. Many should feel embarrassed that this has taken so long.
  • The idea of resettlement prisons, which will have a requirement to work with those providing rehabilitation services, and to which prisoners will be transferred at least three months before release. This resolves a key issue that effective rehabilitation needs to start in prison, rather than after.
  • The acceptance that a mix of binary and frequency measurement is required to make this system work. This may sound an esoteric point but is vital. A binary measure only pays in the event that a prisoner stops committing crime for twelve months. A frequency measure pays for reductions in offending across a cohort. Some people go through the prison system 10 or more times a year. If you have only a binary measure as was originally suggested the only correct financial decision when faced with such an individual (and required to give them a service) would be to give them a leaflet and tell them to go away. Further investment would invariably be loss-making as intense effort over a period of time and money is needed both to gain trust and thereafter help to move their lives in the right direction. Being paid on frequency and therefore acknowledging “distance travelled” will make it worthwhile financially.
  • The shift in number of contract areas from 16 to 21, and the different area sizes, are positive changes. This should mean that social organisations acting as primes, or a probation trust mutual, can bid.
  • But the positive impact of other elements in the response is less clear. The idea of standard contracts is interesting, but will they have to be finalised before the last round of bidding? In other words is there wriggle room?
  • The transparency piece sounds like a step in the right direction, but only a step. Input cost data and outcome payments should be transparently available across the market. In the public sector we see how much is spent on what and hopefully also get an idea (not always!) of the outcomes generated from that money. In the circumstances where you are building a new market, this data is even more important, not less. There will be enough benefit to incumbency without letting providers keep hold of this data. This will also make it clearer if a provider is not finding it economic to work with a particular cohort and is parking them.
  • The comments about women in prison were good to see, but they didn’t seem to imply that anything would be done to make the model work for women.

And there are areas where we simply don’t know anything:

  • What are the potential pricing expectations?
  • Will there be significant segmentation of the cohort and the pricing that goes with it?
  • Will men and women be priced the same? Needs and complexity are very different.
  • Is there room for alterations of pricing for specific groups as we learn over time? It seems deeply unlikely that it will be right first time.

So, at the end of this, what are concerns?

1. This is an incredibly complex, risky and ambitious programme of change. Tom Gash at the Institute for Government has written on this issue in his blog, with sensible recommendations for reducing the risk.

2. Bidding process and pace will favour incumbents

I was told by a private sector provider considering bidding for prisons that they had understood they should expect to bid in one round to learn how to possibly win in a later round. In other words, spend £1 million plus on a learning process before you stand a chance. Social organisations or probation trust mutuals don’t have that luxury. Those who know what the MoJ expects in large contracts will score better than those who are learning on the process. So the answer that it’s a level playing field simply doesn’t wash.

If charities are going to invest upwards of £250,000 of charitable funds and a considerable proportion of senior management time on a bidding process, they need more substance from the MoJ that they stand a realistic chance.

In addition, while there are some limited resources available to help test the mutual option, developing such a strategy and capacity takes time. So would developing a social prime and investment for it. The focus on the timetable above all else is in danger of defining the answer.

It should be a strategic imperative for the MoJ to end up with a mixed economy of private and social provision (and not just in the supply chain, at the prime level). There will be more learning, more constructive competitive tension, and probably greater investment in rehabilitation. European law should allow the MoJ to actively manage the market and they should do so, explicitly.

3. There is still room for gaming in the bidding

Gaming bidding is where an entity bids on the basis of having little intention of doing much rehabilitation, and makes money from input revenues without generating very many outcomes. Some seems to have occurred in the work programme, particularly around harder to reach groups. There are a number of ways that the MoJ can avoid this, examples include:

  • Requiring a certain level of investment in rehabilitation and monitoring it.
  • Scoring bidders on how much they say they will invest in rehabilitation and monitoring it.
  • Requiring transparency on input and outcome data and stating that bidders authenticity to what they said they would do will be assessed and those below a certain threshold won’t be allowed to bid again.
  • Without such measures, a sense that a low cost, gaming bid is likely to do better than a higher cost, rehabilitative bid will prevail

4. I’m not convinced the numbers add up

I can’t see into probation numbers, so I don’t know if it works to take out 20% of cost and provide an effective rehabilitation service for a wider community on top. But my instinct is that real rehabilitation will require real money. This money  is presently tied up in prisons. There should be a sense that these contracts can, if very successful, eat into the prison budget. What is fundamentally up for grabs here is what is the right allocation of resources between processing and punishing people, and trying to stop them doing it again. I wrote about this more substantially on another occasion. Read it here. My view is that the allocation that gets the number of future victims of crime to be as low as possible. In other words this is not about being nice to prisoners, or not nice to prisoners. It is about stopping crime and helping avoid further victims.

In conclusion, the MoJ is making some effort to allow this to work for a wider community than simply their incumbent private sector providers but not enough. The perceived need for speed and the inaccurate perception that they are building a level playing field are likely to undermine social sector interest in bidding at the top tier. The rehabilitation revolution should be about creating social value, reducing crime and reducing the costs of justice overall, and not simply about providing a lower cost privatised probation service. It would be a shame if at the end of the process this was how it was perceived.


One thought on “A Step In the Right Direction But Not Enough

  1. Pingback: Peterborough SIB – a success or a failure? | Musings on Finance and Social Change

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s