Government ready to accept jail bids: The Prison Service today moves to agency status, and private companies will soon be invited to submit tenders to run institutions

PRIVATE COMPANIES will be asked this summer to bid for contracts to run Doncaster prison and about five other jails.

The announcement, on the eve of the Prison Service's move to agency status, operating at arm's length from Whitehall, is a further indication that the Government sees privatisation as the key to improving Britain's troubled prison service.

Derek Lewis, who today formally takes over the management of jails in England and Wales as chief executive of the new agency, said the bids would be the first step towards creating a 'mixed economy of public sector and private sector prisons' that would 'restore the standards of excellence'.

Speaking in Milton Keynes, Buckinghamshire, yesterday at the opening of Woodhill Prison, a pounds 120m 'new generation' jail which offers inmates greater comfort and freedom of movement, Mr Lewis denied that he was seeking large-scale privatisation. The response of the public sector to competition from the private sector would determine how many prisons were contracted out.

He said: 'There will be a small number of existing prisons that will be market tested - performance targets set and bids invited from the existing prison service management and the private sector - later this year. Tenders will be invited for Doncaster.'

His philosophy was to increase private sector involvement in management but, he added, 'I do not want it to be seen simply as a threat to the public sector . . . The private sector is not a substitute for good management.'

Britain's first and only private prison, the Wolds on Humberside, was opened by Group 4 Security last April. UK Detention Services will open Blakenhurst Prison in Hereford and Worcester this summer. The Prison Service has received six bids from private companies to take over Strangeways in Manchester, the only established jail to be put out to tender.

Doncaster prison in South Yorkshire is still under construction and due to open in May 1994. The other five prisons, which have not been named, are established institutions.

Mr Lewis said that he did not see flagship prisons like Woodhill as candidates for privatisation. 'We are not going to achieve our aims of providing a better service for prisoners and the taxpayers by taking the best prisons from the public sector and transferring them to the private sector.'

But, he said, it was vital to create a 'viable and sustainable private sector' to increase competition and raise standards throughout the service. 'It will be constructive rivalry.' Different private companies would have to take over several prisons each to avoid replacing a state monopoly with a system involving only a few firms.

He added: 'There are more grounds for optimism about the future of the prison service now than for certainly the last 10 years and probably the last 20.

'The freedom and flexibility of the new agency status and the development of new programmes to discourage re-offending are very encouraging,' he said.

Earlier, Kenneth Clarke, the Home Secretary, said that agency status and competition would be an 'exceedingly good' way of delivering a service which is 'efficient, humane and imaginative'.

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