'Jails create jobs and they're quiet neighbours'

As the Government prepares to hand out construction contracts for three 'Titan' prisons, Mark Leftly asks if the usual suspect will prevail
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The Independent Online

The Government faces a race against time if it is to put more of the criminal population behind bars. Lord Carter of Coles, the best man at both of Justice Secretary Jack Straw's weddings, concluded last year that there would be a 13,000 shortfall in the necessary prison places by June 2014.

The key policy for tackling this problem is the introduction of "Titan" prisons. The Justice Department's plan is to build three of these huge institutions, which would accommodate 2,500 inmates apiece. David Hanson, the Justice minister, has called for them to be located in the North-west, the West Midlands and in the Thames Gateway near London.

Titan prisons have their critics. Last month this newspaper quoted Carol Hedderman, professor of criminology at the University of Leicester, who argued that locking up large numbers in Titan prisons would lead to "thousands more people offending again".

She added that the proportion of people going back into crime within two years of release could reach 75 per cent in 10 years.

Whatever the arguments for and against these institutions, the business opportunities are huge as each Titan will cost £350m in 2007-08 prices. At the end of this month, submissions to the Justice Department are due from prison operators and builders, trade bodies and unions about how best to push ahead with their construction.

And this is where some of the crunch debates will begin. Most importantly, there is division in the business community over how the prisons should be procured. The much-vilified Private Finance Initiative (PFI), under which the public sector has paid companies to build, maintain and operate hospitals over a period of 25 to 30 years, is thought to be the model favoured by the Government.

However, Chris Booton, a director at construction company Wates and one of the key advisers to Lord Carter when he looked into the idea of Titan prisons last year, believes PFI is flawed in this instance.

He says that a notice in the Official Journal of the European Union last month, which invited builders to express an interest in the Titan projects, "implied it is likely to be PFI". But he adds: "The public sector should operate these prisons. They're flagship, so why not use Titans to prove the public sector is the best at operating them?"

He suggests using the existing prisons roster of construction firms to build the Titans. A dozen companies, including Galliford Try and Kier, have worked on around 50 projects for more than 20 prisons across the country. Mr Booton argues that they have built up expertise and the Government could run a quick and simple "mini-competition" to select the construction teams.

While not dismissing PFI as the most effective model for Titans, Mark Fox, chief executive of outsourcing trade body the Business Services Association, agrees to an extent with Mr Booton. "Delivering prisons is unique in the public sector in that it is the imprisonment of human beings," he says. "We need really good management from the private sector and strong public sector management overseeing that. The public sector mustn't aggregate responsibility on the private."

A PFI approach could also delay construction. The first Titan is due to be completed by late 2012 but bidding for PFI projects is a notoriously drawn-out process, with legal documents capable of filling several rooms in some of the more complicated projects. Under the PFI, 2014 would be a far more likely date for the first man – Titans are not expected to accommodate women – to arrive at Her Majesty's Pleasure.

Serco, the outsourcing group that is bidding to build jails at Belmarsh in London and Maghull in Merseyside, will advise the Government in its submission that PFI is the best way to run Titans.

John Smith, Serco's director of prison operations, says the timetable is "tight" whatever the procurement route. He points to evidence suggesting that PFI projects are typically built on time and on budget once the painstaking contract negotiations are completed.

Mr Smith adds that PFI tends to result in greater collaboration between the design, building and operating teams than if the private sector simply does the construction. This is because consortiums of these different types of company bid together, each usually taking an equity stake in the project.

"Integration is quite important for Titans, as there is a question over whether it is safe to have so many prisoners in the same place. Good design is crucial [for the operators]," he says, arguing that architects and operators need to work together to ensure guards have areas of safety and that inmates do not have access to places that they could use to cause violence.

A spokesman for the CBI says it will back Mr Smith's views in its submission to the Justice Department.

The Government is not thought to have ringfenced any money for Titans, making PFI the most affordable option. The scheme involves paying the private sector consortium over the length of the contract, meaning that full cost does not have to be coughed up straight away. This has often been criticised as passing the cost on to future generations, but it does have the advantage of ensuring that the Titans can be built even in this depressed economic climate.

"Every projection shows that the size of the prison estate needs to be increased – and quickly," explains the CBI spokesman. "We have no views on what types of prison – Titans or otherwise – are needed, but we are concerned how long they will take to get built."

This view is echoed by the Police Federation. Although the organisation is unlikely to make any formal comment on the consultation, its concern is simply that more prisons are vital for the public's safety. "So long as the prisons are working effectively – they are suitably staffed and those who need to be detained are detained – we would not have any difficulty with the idea of Titans," says a Police Federation spokesman.

Potentially there are other problems. Mr Booton at Wates admits that the biggest delays to Titans might not be down to PFI, but people living near the proposed locations for Titans. People unhappy with the idea of 2,500 criminals on their doorstep are likely to clog up the planning process with appeals.

Mr Booton, though, suggests that such nimbyism is unnecessary: "I've been involved in prisons for nearly five years and I'd happily live next door to one. Prisons create employment and they're quiet neighbours."

Whether these nice new neighbours are likely to move in by 2012, though, is very much in the balance.