Straw denies £300m hole in prisons budget

Super-jails scrapped because of opposition, minister insists

Jack Straw was accused last night of scrapping plans for a new generation of "Titan" super-jails because of a £300m "black hole" in the Government's prisons budget.

As revealed by The Independent yesterday, the Secretary of State for Justice will confirm next week that he is abandoning moves to build three giant prisons holding up to 2,500 inmates each. He will instead unveil plans for five smaller 1,500-bed jails, only two of which will be built immediately. Penal reform groups welcomed the U-turn and urged that the Government should go further and divert offenders from prison to community service.

Ministers denied claims that the £1.2bn flagship policy was being cut because of a squeeze on spending announced in Wednesday's Budget. They said the retreat followed opposition in areas where the prisons were planned, and fears raised by reform groups about the effectiveness of warehouse-sized jails.

But the Conservatives highlighted the budgetary constraints faced by the National Offender Management Service (NOMS), which runs jails and the probation service.

The NOMS has been asked to find "efficiency savings" of £81m in 2008-09, £171m in the current financial year and another £85m in 2010-11 – a total of £327m over three years.

Dominic Grieve, the shadow Justice Secretary and MP for Beaconsfield, said the prison service faced a financial "black hole", adding: "It is hard to take seriously ministers' claims that this decision is nothing to do with the fact that another Labour government has simply run out of money." He claimed that criminal justice policy was in "total disarray" and ministers had no coherent strategy for achieving plans to increase prison capacity in England and Wales to 96,000 by 2014.

Last night, the Ministry of Justice said savings could be made without cutting front-line services. Both the ministry and Downing Street also insisted that the Government was on course to create the extra spaces.

But Paul Cavadino, the chief executive of the crime reduction charity Nacro, said ministers should ditch all prison expansion plans.

"This is a waste of scarce resources which would be better spent on community sentences, offender rehabilitation and crime prevention," Mr Cavadino added. "Instead, we need a strategy designed to cut our use of imprisonment to levels nearer those of our European neighbours."

Juliet Lyon, director of the Prison Reform Trust, said: "A decade of wasting billions building more prisons but under-investing in tackling the root causes of a rising prison population has left us with record prison numbers and prison being used as a social dustbin.

"We hope the pressure on public finances will now mean that prison policy is focussed on what works, not on what gets good headlines."

Frances Crook, director of the Howard League for Penal Reform, added: "Titan jails were a disastrous idea and are now a titanic policy failure. Building five 1,500-place prisons – bigger than any other jail in the country – is not the answer to the chronic problems of overcrowding and violence in our jails."

Jon Collins, campaign director for the Criminal Justice Alliance, said: "Instead of building new prisons as a quick-fix solution to prison overcrowding, the Government should develop a new approach to criminal justice policy that combines reducing the use of prison with investment in properly-resourced alternatives in the community."