Derek Lewis, former chief executive of the Granada Group and chairman of UK Gold, told a press conference yesterday that he had never been inside a jail and his first task would be to learn about the service.
He is to be paid a basic salary of pounds 125,000 - nearly double that of the current director general, Joe Pilling, a career civil servant who moves to the Cabinet Office.
But Mr Lewis can earn up to pounds 44,000 in performance-related payments after the service is turned into a semi-independent agency with a pounds 1.4bn budget on 1 April.
The appointment of Mr Lewis, who has his roots firmly in business, is seen by unions and reform groups as an indication that further privatisation of jails and related services is likely.
Home Office sources suggest it reflects a desire to bring a new approach to penal policy in the light of continuing criticism of the conditions in which many of the 47,000 inmates are held, and to break the power of the Prison Officers' Association, the main union.
Announcing the appointment, Kenneth Clarke, the Home Secretary, said: 'I do not have any ideological hang-ups about private sector versus public. I am simply looking for modern management to deliver, on the ground, an improved service. I believe that Derek Lewis, with his business background, will bring in dynamism and speed up prison
Mr Lewis, 46, was forced to resign from Granada 18 months ago. Institutional shareholders blamed him for the dismal performance of the company which left it with falling profits and massive debts. He received a pounds 579,550 'golden goodbye'.
Following the death of Robert Maxwell, Mr Lewis was hired by Maxwell Communications Corporation to try to put together a rescue plan. MCC collapsed, but he moved to Thames Television where he masterminded the launch of UK Gold, the satellite offering BBC and Thames repeats. He will remain as non-executive chairman of UK Gold.
A graduate of Cambridge and the London Business School, he worked in Europe and the United States for Ford from 1968 to 1982. He joined Granada in 1984 and had been in the top slot for three years.
The POA expressed 'grave concern' that a chief executive had not been recruited from the civil or public services. 'We hope that the appointment of Mr Lewis does not signal the Government's intention to dismantle the public prison service,' said Paul Sullivan, its spokesman.
Clarke defends his policy, page 17
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