Blame for multimillion-pound probation failings ‘goes beyond MoJ’

MPs say Cabinet Office, Treasury and Major Projects Review Group have questions to answer over bungled payment-by-results reforms

Meg Hillier Credit: CSW/Parliament TV

By Jim.Dunton

03 May 2019

Responsibility for the failure of the government’s probation reform programme spreads beyond the Ministry of Justice, a damning report from parliament’s Public Accounts Committee has concluded.

MPs said the ministry’s “rehabilitation revolution” – which involved the introduction of a payment-by-results model to drive down reoffending rates, but which has cost £467m more than projected and led to worse outcomes – had been problematic since its 2013 inception.

In their latest report on the fiasco, PAC members said the MoJ had failed to involve voluntary sector organisations in delivering probation services on the scale it promised, and that the Cabinet Office, Treasury, and the Major Projects Review Group had a share of responsibility for the reforms’ inability to deliver.


The PAC said that by MoJ’s own admission it had implemented its Transforming Rehabilitation reforms at “breakneck speed” to procure contracts before the 2015 general election and had failed to conduct adequate pilots or to “learn sufficiently” from similar programmes elsewhere. It said the errors had combined to tie the reforms to a timescale that was “undeliverable from the outset”.

MPs said that despite the inherent risks involved with such an ambitious programme, “the checks and balances for major projects designed to protect the taxpayer, including Treasury and the Major Projects Review Group” had given the programme the green light and failed to provide effective challenge.

They gave MoJ, the Cabinet Office and the Treasury until the end of next month to set out in writing what steps have been taken to strengthen the approval and challenge processes both within the MoJ and at the centre of government in response to the programme’s failure.

Committee chair Meg Hillier said the Transforming Rehabilitation blunders had left probation services “underfunded, fragile, and lacking the confidence of the courts” six years after the programme was launched by then-justice secretary Chris Grayling.

“Despite warnings from this committee and the National Audit Office over the past three years, the Ministry of Justice has failed to bring about the promised revolution in rehabilitation,” she said. “Rather than deliver the savings hoped for at the start of the programme, the ministry’s attempts to address the failures in the reforms have cost the taxpayer an additional £467m while failing to achieve the anticipated improvements in reoffending behaviour.

“Over-optimistic initial forecasts left the Ministry of Justice fighting fires of their own making since the programme’s inception."

All of the Cabinet Office, the Treasury and the Major Projects Review Group share responsibility "by providing insufficient challenge at the early stages of the project and allowing it to proceed too quickly with insufficient safeguards or testing", she added.

“The way offenders are treated on their release from prison has a significant impact on how they re-integrate into society – the failures of this programme have left offenders unsupported leading to further costs to taxpayers in dealing with both reoffending and supporting individuals failed by the rehabilitation system.

“The Ministry of Justice must demonstrate that it has learnt lessons and be more assertive in addressing the failures of design, delivery and financial planning.”

The Transforming Rehabilitation programme saw the creation of community rehabilitation companies – CRCs – to oversee the rehabilitation of low or medium-risk offenders, and the National Probation Service to manage offenders posing higher risks.

CRCs – of which there were originally 21 – were tasked with reducing reoffending rates and introducing new innovations in rehabilitation, and were in line to receive “maximum” payments of £3.7bn between 2014, when work commenced, and the end of the 2021-22 financial year.

However, by March 2017 just six of the companies were consistently achieving significant reductions in reoffending, while reduced volumes of work and a failure to make efficiency savings meant that CRCs were facing significant losses.

The MoJ tweaked its financing arrangements for CRCs in late 2017, effectively providing a £342m boost for them, however by the following March they were still facing collective losses of £294m over the life of their contracts. Their work had originally been expected to deliver profits of £269m. In February this year, Working Links – which owned three CRCs – went into administration.

While the early years of the reforms recorded a 2.5% reduction in the proportion of reoffenders, a 2017 snapshot found there was a 22% increase in the number of offences committed by service users when they did go on to commit more crimes. Reducing the number of new offences committed by those who go on to reoffend  –  the so-called "frequency rate" –  was one of the payment-by-results criteria on which CRCs' success was measured.

In March, the National Audit Office said the number of people recalled to prison had increased by 47% as a result of statutory rehabilitation being extended to those serving sentences of less than 12 months. It said that between January 2015 and September 2018 offenders on short sentences as a percentage of those recalled to prison rose from 3% to 36%.

In July last year the MoJ announced it would terminate CRC contracts 14 months early in December 2020. However, it intends to operate a revised model that retains the split between CRCs and the NPS.

The NAO’s £467m additional cost figure comes from the combination of the government’s decision to pay CRCs £296m above the stipulated cost of their contracts, to underpin their financial viability, and the £171m cost of terminating the contracts early.

An MoJ spokesperson said the department wanted a probation service that put public protection first, commanded the confidence of the courts and broke the cycle of reoffending.

“Our reforms mean 40,000 more offenders are being supervised, which is the right move for public safety, but the current model is not working and we need to do more,” they said.

“We have already acted decisively to end current contracts early, make changes to existing arrangements and we are still spending considerably less than originally forecast. This has enabled us to invest an extra £22m a year to support offenders on release and we are now carefully considering our plans for the future.”

The department said that despite the additional £467m in costs identified by the NAO, ending the contracts early would mean that its total spend on them would be £2.3bn rather than the originally anticipated £3.7bn. Its statement did not give a figure for the cost of providing probation services that would be required in place of the terminated contracts.

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