MPs seek new rules for private jail tenders

An influential all-party committee of MPs yesterday criticised the secrecy which surrounded the award to Group 4 of the contract to run Britain's first privatised prison - now running £8m over its bid.

The Commons Public Accounts Committee was concerned that full details were not available about why Group 4 was chosen to run the Wolds Remand Prison on Humberside when its bid was at least £2.5m higher than other short-listed companies.

The MPs' report into the Wolds, which opened in April 1992, will fuel demands for greater public scrutiny of contracts awarded to run jails. The estimated cost of running the Wolds prison over five years to 1996-97 is now £29.87m.

MPs said "major" items of expenditure were not included in the initial contract with Group 4, and costs of certain activities were significantly underestimated. "It is important the full and true costs of running private sector prisons should be made known at the earliest opportunity, so direct and meaningful comparisons can be made with prisons managed by the public sector," they said.

But yesterday Derek Lewis, the director general of the Prison Service, said the extra £8m covered the costs of utilities and maintenance, which had been deliberately excluded from the initial contract and provision had been made in prison budgets. He said there would be no extra costs to the taxpayer and the Wolds was still on target to cost £4m less than if it was state-run. Mr Lewis said that initially the service had not revealed details of the contract because of "commercial confidentiality", but this policy had now changed.

But MPs said that to avoid any question of impropriety, detailed reasons should be recorded whenever a contract was not awarded to a company which submitted the lowest bid and was deemed suitable for the job.

MPs took "particular interest" in the fact that one of the eight members of the evaluation panel which made the decision to award the Wold contract to Group 4 - Charles Erickson - had left the Prison Service nine months after the contract was placed and had then joined Group 4. But they "noted" Prison Service evidence that the handling of Mr Erickson's move complied with rules.

nOffenders placed on probation or given community penalties are only marginally less likely in the short term to reoffend than those sent to jail - but they will have fewer social problems. In the long term they are less likely to resort to crime, according to research published yesterday.

The research called into question both the Government's forthcoming Green Paper plans to make community penalties much tougher and Home Office assertions that "prison works". But they fail to substantiate claims that community penalties dramatically reduce reoffending.

A study of 18,000 offenders by the Home Office showed that 54 per cent of those sent to jail offended again within two years, compared with 47 per cent of those given community penalties.