Helping the nation spend wisely Comptroller and Auditor General Telephone +44 (0)20 7798 7777 Sir Amyas Morse KCB Facsimile +44 (0)20 7798 7990 Email [email protected] Bob Neill MP Chair, Justice Committee Date 7 December 2018 House of Commons London SW1A 0AA Dear Mr Neill HMP BIRMINGHAM You wrote to me on 6 November inviting the National Audit Office to provide support to your Committee's inquiry into events at HMP Birmingham, in particular the contractual relationship between the Ministry of Justice (the Ministry) and G4S Care and Justice Services Limited (G4S). In the time available before the Committee's evidence session on 11 December, we have not been able to conduct a comprehensive examination of all aspects of the contract, nor of the contract management by the Ministry. However, this letter sets out: • Some brief background and context on HMP Birmingham; • An explanation of the arrangements for governance and oversight of the contract; and • A timeline of key events from the disturbance in 2016 up to the point of step-in. We acknowledge the assistance that we have received from the Ministry, HM Prison and Probation Service (HMPPS), HM Inspectorate of Prisons and G4S in undertaking this work to a rapid timetable. I have copied this letter to Michael Spurr at HMPPS and Martyn Kenyon at G4S. I hope this letter helps you with your inquiry. 2 Background and Context 1 HMP Birmingham (the Prison) is a Victorian prison that was originally opened in 1849 and was later expanded in 2002. Appendix One sets out a map of the Prison. In November 2009, the Ministry invited private sector bidders to submit proposals for providing custodial services at the Prison and four other existing prisons. Bids were invited to operate and maintain the prisons for seven years, but with an option to award contracts for up to 15 years. The Ministry's stated objective in outsourcing the management of the Prison was to obtain delivery of a safe and secure custodial service in a more cost-effective manner for the taxpayer. The Ministry also expected to secure improved performance, with the then Secretary of State for Justice acknowledging that the Prison had been identified as a poorly performing prison.1 2 In April 2011, the Ministry awarded a contract to G4S to deliver custodial services at the Prison for 15 years. The contract is between G4S and the Secretary of State for Justice, on behalf of the Ministry. For the 12 months to November 2018, the contract cost incurred by the Ministry in relation to the Prison was £22.2 million (for the 12 months to November 2017 this was £24.3 million).2 A study of the quality of life of both prisoners and staff during the transition from the public to private sector by the University of Cambridge concluded that, after an initial decline in quality of life, the Prison had shown signs of positive progression by 2013. Prisoners’ overall ‘quality of life’ score improved each year of the study, though remained low compared to other local prisons.3 3 In December 2016 a major disturbance took place at the Prison, causing severe damage and resulting in four wings being taken out of use and some 500 prisoners being moved to other facilities. Following this disturbance, in February 2017, HM Inspectorate of Prisons (the Inspectorate) inspected the Prison, and despite some serious problems, found "a very clear determination on the part of the leadership and staff to move on from the disorder, rebuild and make progress".4 4 In August 2018, the Inspectorate conducted an unannounced reinspection of the Prison, identifying a dramatic deterioration in its condition. The Inspectorate initiated the Urgent Notification protocol5 on 16 August describing a "near total failure to address … previous recommendations" and "an abject failure of contract management and delivery".6 Subsequently, on 17 August, the Secretary of State for Justice issued a contract Notice removing the Prison from G4S's control and placing it under the leadership of a Governor from HM Prison and Probation Service (HMPPS). Another Notice on the same day exercised the Ministry's right to 'Step-In' and take control of the contract on grounds of a contractual breach. 1 Hansard HC, 31 March 2011, vol. 526, col 526. 2 The contract cost for the 12 month period to November 2018 includes a reduction for the 116 places in G Wing, which was not in use during the period. The equivalent cost for the 12 month period to November 2017 takes into account a reduction in prison places available due to the disturbance in December 2016. 3 Liebling et al, Birmingham prison: the transition from public to private sector and its impact on staff and prisoner quality of life - a three-year study, 2015. 4 HM Chief Inspector of Prisons, HMP Birmingham, February 2017. 5 An Urgent Notification is a mechanism for HM Chief Inspector of Prisons to raise urgent concerns about a prison and requires the Secretary of State for Justice to respond with an action plan to address the concerns within 28 days. 6 HM Chief Inspector of Prisons, Urgent Notification: HM Prison Birmingham, August 2018. 3 Arrangements for governance and oversight of the contract 5 The contract between the Secretary of State for Justice (the Ministry) and G4S is an extensive and complex suite of documents comprising the main contract and some 30 detailed schedules, many with their own constituent parts and appendices. It defines the respective responsibilities of the Ministry and G4S, and the key staff who discharge them. Key posts with respect to overseeing service performance are: 6 For the Ministry: • A Senior Business Owner (SBO), who is Head of Custodial Contracts, providing operational oversight for all Privately Managed Prisons and enabling enforcement of Contractual obligations at an over-arching level. • Senior Contract Managers (SCM), provide oversight on a number of prison contracts for which they have operational responsibility. They are the point of escalation from the Controller based on site. • The Controller, who provides the permanent on-site presence for the Ministry and has rights to roam the establishment freely. The Controller, who enforces contractual implementation and change at an operational level, provides monitoring of G4S and reports to the Senior Contract Manager. The Controller is supported by a small team of Assistant and Deputy Controllers conducting daily monitoring. 7 For G4S: • Managing Director G4S UK Custodial and Detention Services, with overall responsibility for G4S’s five prisons in England and Wales. • The Prison Director, responsible for day-to-day delivery of the custodial service, supported by a management team and some 300 custodial staff. The Director is the equivalent of a prison governor, except for some functions reserved for the Controller. The Director meets at least weekly with the Controller for compliance meetings. • Head of Contracts, responsible for day-to-day contract management. 8 The Ministry has a number of ways in which it can influence how services are delivered under the contract. These include: • Regular meetings to discuss performance and agree actions, including formal escalation processes where there are concerns; • The contract performance regime, including Contract Delivery Indicators, which create direct financial incentives; • Financial remedies in respect of cells being unavailable; and • Influencing prison maintenance and renewal. 9 In addition, the Inspectorate provides independent assurance over the status of individual prisons through its programme of unannounced inspections. 4 Regular meetings to discuss performance 10 The contract specifies the need for monthly meetings between the Controller and the G4S Prison Director, supported by their respective teams. The Controller's team also reports on progress more generally and on any actions arising. Quarterly Contract Review Meetings take place and these are attended by the contract managers for the Ministry and G4S. This is the more senior and structured meeting where the performance of the Contractor is formally reviewed and assessed. Figure 1 shows how these meetings sit within the overall governance structure. Figure 1 Levels of governance and key meetings required under the contract Source: The Ministry's Contract Management Plan for HMP Birmingham 11 The contract provides a formal route for escalating issues, from routine day-to-day management of performance and service delivery, through successive stages of escalation as issues become more serious or protracted, leading ultimately in the worst case to "step in" by the Ministry and potentially to termination of the contract. Figure 2 shows the main stages of escalation. A contractual requirement for each stage is that the Ministry is required to specify its concerns through a written Notice, allow G4S a period of time (to be agreed between the Ministry and G4S but at least 7 days) to respond with an Improvement Plan for resolution, and then allow time for the agreed actions to be implemented. 5 Figure 2 Escalation of issues under the contract for custodial services at HMP Birmingham The figure shows the stages in escalation from routine service management through to more formal contractual stages should these prove necessary Notes 1. Some schedules also make additional provision for the Ministry to issue an Outstanding Issue Notice (OIN) between the Improvement Notice and Rectification Notice stages. The Ministry issued an OIN in June 2018, the validity of which G4S has contested. Source: National Audit Office review of contract documentation 12 In addition to the above process, the contract specifies that G4S shall at all times maintain a sufficient number of staff with the requisite level of skill and experience engaged in the provision of services to ensure that the Prison is a safe, secure and decent environment. The contract requires G4S to notify the Ministry in advance of any significant changes it proposes to the staff levels set out in its resourcing plan.