In May 1992, Mr Clarke signed contracts for new purpose-built headquarters as part of a relocation package totalling pounds 139m. Four months later, and under Treasury pressure to cut spending, he cancelled the deal.
At first, it was reported that the abortive venture could cost taxpayers in the region of pounds 11m on land, designs, and costs incurred by families who had already moved and settled in Derby. But it now emerges that Hyperion Properties, the main contractor, is seeking more than pounds 20m for the cancellation of agreed contracts.
A total of pounds 11.5m has already been paid out, and the Prison Boards of Visitors - appointed as independent watchdogs - fear the eventual cost will comprise nearly 2 per cent of the prison department's pounds 1,363m annual budget. Julian Ellis, chairman, said: 'Prisons need many facilities if they are to help prisoners become law-abiding citizens. It is a crying shame to see all this money wasted when it is so badly needed for positive improvements.'
Almost 2,000 jobs would have been relocated in Derby if the scheme had gone ahead. At the time, Mr Clarke said he regretted the cancellation, but offered the consolation that resultant savings might be redirected to benefit other public services - such as the police and the 'expansion and refurbishment of prisons'.
Tony Blair, shadow Home Secretary, called for a full report and said: 'It is disgraceful that money has apparently been mismanaged in this way.'
Harry Fletcher, of the National Association of Probation Officers, said it was an 'appalling waste of much-needed resources'. Stephen Shaw, director of the Prison Reform Trust, called for an investigation by the House of Commons Public Accounts Committee.Reuse content