Scottish Prison Service lose pounds 2m property & computer deals

The Scottish Prison Service lost pounds 2m last year on property and computer deals which went wrong, according to a National Audit Office report published yesterday. Sir John Bourn, auditor general, highlighted the two cases in his audit of the prisons agency.

A pounds 1.8m loss was made on the purchase and subsequent sale of Middleton Hall, Midlothian, which was intended for a prison service college. The property was bought in 1989 for pounds 1.3m despite a valuer's assessment that it was worth only pounds 700,000. No structural survey was carried out before it was bought and emergency repairs were required. The prison college project was cancelled due to a redirection of resources and Middleton Hall sold in 1993 for pounds 580,000.

The second big loss was on a computer maintenance contract. The prisons agency paid for the three-year contract of pounds 266,000 in advance at the beginning of 1996. Less than six weeks later the supplier went into receivership and the prisons agency does not expect to recover any of the cash.