MoJ Give Evidence 2

Here we have another chunk of the recent dialogue with the Justice Committee and a bit more 'granularity':-

Q406 Victoria Prentis: It occurs to me that as part of this session I should declare that I am a trustee of Nacro and a non-practising barrister. 

You have already talked about the transition strategy. Is that part of a wider transition strategy for ensuring that there is continuous support? 

Amy Rees: The straightforward answer is absolutely. We are conscious that we now need to get to the end of the contractual period, which is likely, as Jim has just said, to be spring 2021, with everything in the best shape possible. We are going to do that in three ways: first, ongoing contract management that will continue throughout the period and is well understood; secondly, the benefit of what happened in Working Links is that we now have tried and tested contingency plans if we cannot make it to the end with any particular provider through unforeseen circumstances; and, thirdly, there will be active dialogue with the current providers about how we can best manage the transition. That is all on the CRC side of the house; there is also quite a lot we will need to do on the NPS side of the house to be ready. We are starting that work and planning now. 

Q407 Victoria Prentis: How are you going to incentivise the CRC companies to keep up the work? 

Amy Rees: First, our contractual terms are very clear about what they are obliged to do. Secondly, as we have just discussed, we have quite a lot of stabilisation measures to try to make a stable business for them going forward. In addition, we are working closely with them on how we can manage transition so that it is beneficial to both sides; and we are in active discussion, as you would expect, with trade unions about how we manage the change for the staff who will be affected. 

Q408 Bambos Charalambous: I have two points, the first of which is about the contracts. The contracts were very badly drafted in the beginning, which led to lots of problems. Has any lesson been learned from the procurement process? I think it was rushed through and that has led to untold problems now. 

Robert Buckland: Mr Charalambous, you reiterate and perhaps develop some of the points we have already discussed. I have already dealt with some of the baseline assumptions made about the type of cases that were going to be coming through the system, and the fact that we ended up with more serious offences that had to be dealt with by the NPS. That meant that fewer less serious cases would have been dealt with by the CRCs. We were also making sure that there was a full and proper understanding of the need for as stable a staff base as possible. My experience of the probation service is that we should encourage as much longevity of service and experience as possible. Nothing is better than experience, bearing in mind that we are dealing with a cohort of individuals who display all sorts of challenges. One learns from experience how to deal with them. 

More fundamentally, there is the role of probation staff and the wider public understanding of the importance of their role. I want to make sure that, in future, probation officers are valued by everybody as much as they are by people in this room and those of us who have worked with them, and that their vital role is enhanced and understood. That aspect of the reforms is going to be really important. 

To take your point, as you have heard from my officials, we are taking great care with any assumptions that are made about the future, but the big advantage of this change is that we will no longer have the division between serious and non-serious; we will have an overall framework with the regional model. Let us take an individual probation officer, for example. The inspectorate said that a caseload of more than 60 is too much. We are already mindful of that and want to help probation officers manage a lower caseload and a wider range of offences, not just all serious offences. A lot of NPS officers have had to deal with quite a serious diet of heavy cases. It is right to level that out so that there is a mixed caseload, to acknowledge the fact that it can take a very heavy toll when you are dealing with complex and challenging individuals. That wider understanding of the context is very much part of how we are going to develop the process. I take on board your comments. I think that this time, with the timescale we are talking about, we can and will do better. 

Amy Rees: TR was certainly an ambitious and innovative reform, and we acknowledge that there were two particular areas of complexity that will not exist in the new model. The first, as the Minister said, is that there will not be split offender management. That was quite difficult to contract for. We will not have to contract for offender management, which was a complicated and tricky thing to do. 

The other area was the inclusion of payment by results, which, as you can appreciate, was also a pretty tricky thing to try to contract for. We will not be doing that in the new model, so we are certainly looking to simplify the new contracts that we will be signing with new providers. 

Q409 Chair: It seems to be accepted in light of experience that payment by results was not the right model for probation. 

Amy Rees: We would certainly acknowledge that PBR added a massive level of complexity and risk that we and providers have been learning about in reality. 

Q410 Chair: You are not going to pursue it anyway; that is understood. Ms Crozier, turning to the relationship with the workforce, they have been through a good deal of upheaval and probably need some stability as well as support, don’t they? 

Sonia Crozier: Absolutely, but I have to say from my direct contact with NPS staff that the announcements have been broadly welcomed. There is a real sense that they want to get behind the changes as we go forward. Let us not forget that, whether you work in the NPS or a CRC, there is a strong culture of vocation in the probation service. People do not give up despite adversity, and that has been seen and assessed by Her Majesty’s inspectorate of probation; they have gone into probation areas where things are not as they should be, but people carry on. Obviously, we cannot rely on that good will forever, so the transitional work Jim will be leading has to put supports in place to make sure that we carry people forward to contract change. 

Q411 Ms Marie Rimmer: The National Audit Office said that the possibility of multiple provider failures is a live risk. How are you managing that? 

Robert Buckland: I think you are referring to the issue of what happens between now and the end of the CRC contractual period. We have already talked to the Committee about the experiences we have had, for example with Working Links, where we had to take action to make sure that another provider came in. That was done via Seetec. I am happy with regard to the transfer of undertakings, for example; it is not TUPE, but it is analogous to it. That happened in as smooth a way as possible so that staff were not unduly inconvenienced.

We took a lot of learning from that, which I think makes us very resilient if we are to face another challenge of that nature between now and the end of 2020. Wales is leading the way, because by the end of 2019 we will have a unified service up and running. That has been a very important source of information to equip officials with the wherewithal to deal with any failure. 

We have to be mindful of the fact that it would not be right, according to competition rules, to slot another private provider into a region because of the 25% rule, so there would have to be another solution, which will be a GovCo solution. We have thought ahead on this. We have had the experience already and we will put it to good use if needed. It is my belief that the provisions and contingencies we have made in order to support the CRCs will be enough to carry them through to the end of 2020, but we are ready if there is an issue. 

Q412 Ms Marie Rimmer: How are you going to monitor it as it goes along, without waiting until it collapses? 

Amy Rees: As you would expect, we monitor these contracts really carefully. Since the lifetime of the contract, we have been in active dialogue, hence the changes we made to the contracts over the last couple of years. We will be in even more active dialogue now about how we manage transition. We have an existing experienced contract management team that will continue to monitor the health of those contracts going forward. 

Q413 Ms Marie Rimmer: Our report was deeply concerned that the voluntary sector was less involved in probation than before the TR reforms were implemented, which was an unintended consequence. What is the MOJ doing about that? 

Robert Buckland: Perhaps I could preface the remarks and then Jim can come in. On the basis of what I said before, we think the new model, with its direct link between the NPS and providers, means there will be room for smaller localised organisations, whether it is the third sector or other types of organisation, to provide localised tailored support. I talked earlier to the Committee about co-commissioning with police and crime commissioners. You make an absolutely fair point. That was lost in the mix when it came to previous provision. We do not want to do that. In short, we are going to design a system to make sure that we can and will involve the smaller organisations. Jim might want to come in on that. 

Jim Barton: I have a couple of minor additional points. As the Minister pointed to, we are consciously designing the shape of the new market in a way that reduces barriers to entry for the voluntary sector. For the innovation partners, we intend to put in place larger contracts aligned with the future NPS regions. The first thing we are doing is fundamentally changing the payment mechanism. As we have already referenced, there will be no payment by results. Therefore, the financial sums that organisations need to put at risk, or have in their reserves earmarked to cover risk, will be significantly lower. That should make it possible for larger voluntary sector organisations or consortia to consider themselves credible bidders for those contracts. 

The second thing we will make sure that we do, which again is learning from transforming rehabilitation, is to provide much earlier clarity on what financial guarantees organisations need to put up, because I think that came as a slightly unpleasant shock to some organisations towards the tail-end of a procurement process, having invested a fair amount of time and effort to get there. We will make sure that people have sight up front of all the information that is relevant to them when making a decision with their trustees as to whether they can bid for contracts. 

As the Minister referenced, the second part of our market strategy is a framework or dynamic purchasing system that has consciously been chosen and will be created with the aim of reaching out to more specialist and, therefore, predominantly smaller not-for-profit organisations that can support individual offender need and specific cohorts of offenders. We have learned the lessons and we aim to apply them. 

Q414 Ms Marie Rimmer: Is the voluntary sector still strong enough to carry out the role you envisage for it? As I am sure you are aware, we have lost some incredibly good smaller providers, particularly BAME providers. Is the strength still there in the voluntary sector to provide services? 

Jim Barton: As you will know, we fund Clinks, the umbrella organisation for the sector, for a number of reasons. One is to do precisely that—to monitor the health of the sector. Their last report, “TrackTR”, was published last year, and gave some evidence that we are on a declining trajectory. It is getting worse and harder for the sector as a whole, and we acknowledge that. We will continue to work closely with Clinks and, through them, the rest of the sector during transition, because it is not in our interests for the voluntary sector to be hollowed out. 

Q415 Ms Marie Rimmer: It is going to be incredibly difficult, isn’t it? 

Amy Rees: Anecdotally, in Wales, where I am based, we have been discussing this with the VCS for longer, since last July. It is true that the market and the VCS have found the landscape more difficult, but we are reassured that there are still providers out there; they absolutely want to work with us and are in active dialogue with us about how we can strengthen them and shape the contract so that it is better for them. They need a bit more certainty for a bit longer than we have perhaps given them in the past. I am reassured that there is still a market and a vibrant sector that we can work with, but it definitely has been difficult for them over the last couple of years. 

Q416 Ms Marie Rimmer: In October, the MOJ accepted our recommendation that it should publish a workforce strategy. Indeed, we were told that the Department was working on one. By May, the MOJ said instead that it had rejected the recommendation. Why did you change position? 

Robert Buckland: Being frank, with regard to strategies, one can spend a lot of time drawing up a plan. It is far better to get on with it, and the figures are yielding some positive results. In the last year, 2018-19, we have appointed an extra 624 probation service officers, which is already a substantial increase for the NPS. My plan is to recruit more officers. We have an active recruitment campaign now; I want to see it very much focused not just on the NPS but on where there are issues with provision at the CRCs, so that we crack on with recruiting more officers there as well. 

In short, we want more probation officers doing a caseload, as I was saying, in accordance with the recommendations of the inspectorate, and handling a more mixed caseload, to acknowledge the fact that it can be a very stressful and difficult job; plus the enhancement of the role of probation officers in terms of their professional status. That is a strategy. I have set it out to the Committee, and I am happy to write to the Committee to explain it. That is our strategy. We have it, and we are going to crack on with it. 

Q417 Ms Marie Rimmer: You are using the inspector’s report and other reports, so you must have some idea of the numbers you need, and where. How do we know that it is actually happening, and when is it planned to happen? Is it keeping up to date, Ms Crozier? 

Sonia Crozier: One of the key lessons we learned from transforming rehabilitation is the cost of breaking the probation pipeline in terms of qualified officers coming through. We had a break, and it has taken us some time to recover from that, but we now have a well-rehearsed process for recruiting new officers to the National Probation Service and a commitment, as the Minister has just outlined, that, through transition, we will not break that pipeline again in preparing for the future. We have a good system now to project forward and reach out to the market, to attract graduates into the organisation. 

Q418 Ms Marie Rimmer: The Committee is still concerned about the critical shortage of probation officers. It seems to me that what you are saying is that you can give us some information and we might not need to be as concerned as we are. Would you let us have that information, please? 

Robert Buckland: Indeed. As I said, the very significant increase in appointments last year is a good sign that we are moving in a positive direction to achieve the ambition I have for the service. 

Q419 Ms Marie Rimmer: Could you let us have something that we can see and test ourselves? 

Robert Buckland: By all means. 

Ms Marie Rimmer: Thank you. 

Amy Rees: I just want to add a little bit on workforce. There is obviously recruitment, but the other important announcement we made as part of the announcement the Minister alluded to earlier is that we will be creating a statutory professional framework. That is really important, because people qualifying on day one is one issue, but going forward we have to ensure that professional learning, training and development is maintained. This is a guarantee that that will happen for everyone existing in the system and for new people coming into the system. We also think that it is a really important statement to the criminal justice system more widely about acknowledging the professionalism and the critical importance of the work that probation staff do.

Q420 Ms Marie Rimmer: We welcome the intention of implementing the independent statutory register for probation. Would you like to tell us a little more about that? Which body will own it, how will it work and when will it come into force? 

Robert Buckland: The statutory basis is the big departure. We will develop the detail of the plans as we come to the legislative stage, because it will require legislation. As Amy said, it will be a new framework of standards and excellence, which will support probation officers not just in enhancing their role but in setting a standard to which they will work, which allows the sharing of best practice. We have many examples among local probation officers of individuals doing great and innovative work. Let’s share and understand that better and spread it through the service. What better way than via a framework? To coin a phrase, it is a royal college approach, which has worked so well in other professions that I want to see it in the probation profession. 

As I was saying to you, Ms Rimmer, you do not need to convince me about their value. I have seen it for myself. What I want to do is to convince the public about their value and to understand them. I do not want them to be a forgotten corner of public service; they are a vital part of public service and, without them, we would soon notice the difference. 

Q421 Ms Marie Rimmer: Yes, we have noticed the difference. 

Sonia Crozier: I am absolutely delighted about the announcement on formal registration. That will give confidence to staff that, in future delivery of probation, there will be a commitment from us on the quality of the training they should be offered post qualification, which will give greater consistency and enhance quality. It will restore some of the sense of confidence, in the way the Minister just described, and the sense that we are not a forgotten corner of the criminal justice system but have something of value to add, in our ability both to effect change in individuals and to protect the public. 

It also gives assurance to victims of crime. Some of the most difficult conversations I have with victims, particularly of serious crime, are about their concerns whether the professionals overseeing individuals are actually properly qualified and trained to do their job. Once we have registration, it will give confidence to victims of serious crime as well—the confidence piece that the Minister so well articulated.

(To be continued)

MoJ Give Evidence

Last Wednesday the House of Commons Justice Committee had the opportunity of grilling the new man at the MoJ, along with Jim Barton, Sonia Crozier and Amy Rees. As on previous occasions, although somewhat lengthy, it's important that what was said is examined in some detail, but in several chunks:-   

Q375 Chair: Minister, thank you very much for coming and bringing your officials. You are well known to us. All of us have met your officials in the past, but perhaps they could introduce themselves for the record. 

Jim Barton: I am Jim Barton, the director responsible for delivering the probation reform programme. 

Sonia Crozier: I am Sonia Crozier. I am chief probation officer of the National Probation Service. I also have responsibility within HMPPS for women.

Amy Rees: I am Amy Rees. I am the interim director general for probation and Wales. 

Q376 Chair: Let me kick off. There have been some important announcements about the future of probation, welcome ones as far as this Committee is concerned. What changed the Government’s mind from last October? 

Robert Buckland: First, can I pay tribute to the work of the Committee, which has taken a long and informed interest in this? I am grateful to all members for having considered the matter and helped inform the process. 

I am fairly new in post, but, as you know, Mr Neill, I have had a long involvement with the system and have worked with probation officers for the better part of 30 years, so I know their worth and value. I think we acknowledge that, although there has been important change brought about by transforming rehabilitation, we needed to make further changes. There had been a process during the TR regime from 2014 onward where we had made adjustments. Most notably, the decision to end the CRC contracts earlier than planned was a major adjustment, but we based our decisions on the evidence and the information, and as a Department we are not frightened to acknowledge when change is necessary. 

This was one of the key moments when both the Secretary of State and I felt very strongly that we needed to streamline responsibility for provision in the area to make it clearer and more straightforward, in particular to understand the important role of the National Probation Service. These reforms will give the NPS a stronger and clearer role in managing all offenders. We believe that the system we are going to develop will enhance and encourage voluntary sector involvement in rehabilitation to a greater level than we have seen previously. 

I have described the scenario as a mixed economy. I believe that very fundamentally. It is important that we retain the voluntary sector, and indeed the private sector, in helping us to make that provision, but the overarching framework within the NPS and the creation of 11 regions will underline the importance of allowing each part of the sector to play to its strengths and deliver more investment in further enhancing the role of our probation staff. That aspect of our proposed reforms has perhaps been somewhat overlooked. 

For me, it is absolutely vital not only that we increase the number of probation staff, which is happening, but that they feel valued and understood by wider society as a vital part of the system, whose judgments are to be relied upon by sentencers and whose assessments within the community are an important part of offender management and rehabilitation. As part of that process, your Committee played its role, but the observations of the former chief inspector of probation, Dame Glenys Stacey, also played a very important part in influencing the thinking that has brought us to this position. 

Q377 Chair: It is Keynesian; the facts or evidence have changed, and you have changed your view. 

Robert Buckland: To condemn TR out of hand and say that it was a failure is unfair to many aspects of it: for example, the increase in the overall number of people supervised; some of the really good projects that we saw in the south-east relating to stalking; and the work done on unpaid work requirements. I do not think it would be fair to write off the past four or five years as a blind alley, because it certainly was not. A lot of what we have learned from that will be taken forward in the new model, but the end of the division between serious offences and less serious offences will help us, most notably not just with overall accountability but with the workload of probation officers. Perhaps we can explore that as we go into questions. 

Q378 Chair: You have come into post recently. Have you had the chance to meet many frontline probation staff since you have been there? Perhaps you would tell us what you have found in terms of their response. 

Robert Buckland: In the few weeks that I have been in office I have already visited a probation centre in Greater Manchester, together with senior probation staff, but, most importantly, to meet probation officers working with offenders on the ground in an innovative way. In the particular probation office I visited they were managing quite hard-to-reach offenders with a particularly innovative programme that involved therapeutic and support services to understand the underlying reasons for offending. For me, it is reacquaintance with a profession I have worked with and been impressed by over nearly 30 years. 

Q379 Chair: I understand and agree with what you are saying. I think we would all endorse what you say about probation staff. 

One of the things that troubled us was what seemed to be a diminution of confidence on the part of the judiciary and sentencers in the way they could rely on the follow-up to sentences. Can you talk to us specifically about how that is going to be addressed in the new system? The decision was that the people who wrote the reports were NPS staff, but in the past the follow-up was done by CRCs. How is the confidence of magistrates and judges going to be addressed? Bring in your officials by all means. 

Robert Buckland: Absolutely, but can I lead off on that basis? I come to this job in the sense that I will take the position of the sentencer. Having done it myself and sat in the judge’s chair and looked at the options when sentencing, I understand that the confidence sentencers need in their options is absolutely vital. We are already seeing some important examples of work being done to improve the options that have existed for a very long time in statute but which, in reality, have proved somewhat different. 

Let’s take mental health treatment requirements as part of a community order. A number of pilots are now being undertaken in Milton Keynes, Northampton and a few other centres—I think London is piloting two. We have not yet seen the outcome evaluation or the process evaluation, although we will, by the way, have some idea shortly from the Department of Health as to the process evaluation, but we are already seeing a tailored approach to individual need. I accept that that can be a challenge and there is always a resource issue with these options, but it is my aim to try to make sure that sentencers have a proper choice, that the words on the page in the 2003 Act become more and more of a reality, and that by improving that choice prison is not the only staple in the diet of sentencing, if I can use that phrase. That is well understood. I am happy for officials to come in to develop those points. 

Q380 Chair: I understand that and agree with it, but I am interested in the nuts and bolts of how we give the sentencer reassurance that there will be a better follow-through than appears to have been the case in the past. Who would like to deal with that? 

Amy Rees: To add to what the Minister said, in July we launched our probation consultation document called “Building Confidence”. As part of that, we trialled the new model in Wales, which looks very similar to the model we are now going for in England and Wales, so we were able to gather quite a lot of detailed feedback about what people thought about that model, including the judiciary, and they were very supportive of what we were planning to do in Wales. 

It comes down to some quite simple things. There will be one person responsible for probation in a region. If you have issues that you want to follow through, you will be able to go directly to one person. The system will have an owner in a region that gives a point of interface with the judiciary that we think has been missing over the last four or five years. 

Q381 Chair: A resident judge at Chelmsford, Maidstone or somewhere has a specific person they can go to. Is that what it comes down to? 

Amy Rees: And who manages the whole system. 

Q382 Chair: That can be followed through, and the recorder, Mr Buckland or I, is in the same position to do that. 

Robert Buckland: Indeed. I think the relationship between the judiciary and the probation service is absolutely vital. The judiciary need to have confidence that the authors of pre-sentence reports are people who have the experience, authority and understanding to reach judgments that can be relied on. I am not a nostalgist, Mr Neill, but we are looking at building those relationships in a stronger way. With technology, there are many other ways in which it can now be done just as effectively. The relationship—the liaison—is strengthened so that resident judges, circuit judges and recorders can have confidence. 

Q383 Chair: I understand that. Does anyone want to add anything to the details and specifics of that? 

Jim Barton: I acknowledge that the model we are now proposing to implement removes the disconnects you have referred to, Mr Neill, in terms of the person offering advice to sentencers not necessarily working for the organisation that is then responsible for those cases. Under the new model, that disconnect is simply removed. 

Q384 Chair: There will be a direct link between the author of the report and those who do the administration. Similarly, if for any reason there is a breach and people are brought back, do you think you can give better assurance under the new system that it will be joined up? 

Robert Buckland: Yes. 

Q385 Chair: That is helpful. How does it differ from the old probation trusts? The Secretary of State says it does not, and I can understand why to some extent. Eleven regions are a bit different. What would you say are the key differences? 

Amy Rees: There is obviously a size difference, which we have acknowledged, and that is important. Beyond that, there are some more important differences. As I just referred to, there will be a single director responsible for probation services in a region. That means both the directly delivered part and the commissioned part, but that responsibility is through a civil service relationship so the Minister will still be able to have a line of sight, not just on the direct delivery but on the commissioned services. 

Jim Barton: Perhaps another point of difference with probation trusts is the size of the market involvement. I know that the Committee has followed the history of probation very closely over many years since the creation of probation trusts in 2010. You will remember that there was always an intent that probation trusts should commission out potentially up to 20% of their services. From my anecdotal memory of that time, having worked for one of those trusts, I think only one or two got anywhere close to that level, despite a considerable push from Ministers through successive Governments to try to achieve it. What we are committing to under this model is that there will be an absolute requirement that the National Probation Service commissions the provision of interventions from market providers, whether they be private or voluntary sector organisations. 

Sonia Crozier: The other obvious difference is that we have become a national probation service in areas where it is important to have a greater degree of consistency. We have pursued that very hard and have taken out some of the differences that we inherited from 35 trusts—for example, in the use of our approved premises and the targeting of that. The benefits of being a national service will be taken forward into the new regions but will be combined with the kind of flexibility at local level around commissioning and engagement with the voluntary sector that Jim Barton has just described. It is about taking the best of what works nationally but combining that with new opportunities to have a greater focus on local engagement. 

Q386 Chair: One of the criticisms of the previous regime was that, whatever the intention, in practice some voluntary groups were involved, maybe not as many as had been hoped, but that one thing the old trusts had was a fairly direct link into the local community through representation and membership of the trusts. That seems to have been very much lost. 

Given that a lot of the folk who will be dealt with by probation will have housing and social services issues, potentially education issues and health issues, how will you get a meaningful say at local level as well as national level rather than everything being referred up the line to the Minister, as I found when I was in a health authority, and becoming very centralised? How are you going to avoid that? 

Robert Buckland: We are already having active dialogue with police and crime commissioners. There was dialogue prior to the announcement, as you would expect and hope, and that has carried on. I met a representative sample of PCCs only last week to discuss ways we can jointly commission local services. 

It seems to me that the “and crime” element of the PCC model is one that comes into play when we are dealing with prevention and rehabilitation. Therefore, it is an entirely logical step to use that network as an important framework, below regional level, to identify some excellent examples of local provision so that we can, as you say, have a direct link with the small charity that might be working with veterans in Wiltshire, for example, or an organisation that might be working with a particular cohort of vulnerable offenders in another part of the country. There will be a direct link in terms of how the relationship with the NPS is maintained. As Sonia says, the local being blended with the national is where the balance needs to be struck. 

Q387 Chair: It is local knowledge, isn’t it? Some of the key decision makers being involved is critical. What are the practical means by which you can achieve that, Ms Crozier? 

Sonia Crozier: As we take forward future design, we want enough well-informed local managers who are working to a common set of principles engaging with local partners. That is different from the position we have been in previously where you might have managers from the NPS and the CRC combining two voices locally, which can be confusing, or perhaps there are no voices because one thinks the other is doing something. We will have a unified approach, with leadership flowing down and sufficient local managers on the frontline doing all the things you have just described, building relationships with local charities at a very local level in small towns across the country. 

Q388 Chair: You signed MOUs with both the Mayor of London and the Mayor of Greater Manchester in relation to elements of justice devolution. Many of us would say that some elements of probation work are pretty obvious examples of areas where you could devolve a lot of the delivery of these matters. How will that fit together under the new set-up? 

Amy Rees: We are in active dialogue with both of those Mayors and both regions. We already work quite closely with them. For example, in Greater Manchester we have had an intensive alternative to custody pilot running for some time, so it is building on a dialogue that already exists. We think the new model will be much better placed to allow us to work much more closely with those kinds of partners and others. Why? Because we are directly commissioning from a framework that will both allow much smaller organisations to be part of that framework and enable us to commission together with all sorts of organisations—PCCs, metro mayors or local authorities. 

Q389 David Hanson: I will take you back to the National Audit Office, if I may. In its report in March this year, it said that the part-privatisation of probation services had been extremely costly to the taxpayer. What is your current estimate of the cost? 

Robert Buckland: Where we are with the overall cost is that the net figure, in fact, is somewhat more encouraging when one takes into account the fact that we will have ended the contracts early. 

Q390 David Hanson: What is it? 

Robert Buckland: The projected spend? The overall non-spend on the contracts is £1.4 billion. The net figure is £800 million in terms of money actually not spent, so there is still an overall excess, if you like, rather than a deficit. 

Q391 David Hanson: There is a figure of £171 million in the National Audit Office report as the cost to the taxpayer. How do you account for that? What is that for? 

Robert Buckland: That figure is included very much in the net figure. I can break that down. That £171 million consists of £113 million that the Department agreed with 20 of the 21 CRCs with regard to changing the baseline. You will remember that there was a frequency of reoffending baseline assessed as at 2011. What happened was that that was not reflected by the reality of the number of cases being dealt with by CRCs, and it was remodelled to a figure based on the 2015-16 year. 

Q392 David Hanson: There was £467 million put in 18 months to two years ago. Where has that gone? 

Robert Buckland: I am just trying to explain, if you will bear with me. A figure of £1.8 million was allocated to the Merseyside CRC. There was a particular issue there because they had overseen quite a significant improvement in the frequency of reoffending in their area and were making some progress. There was a request made by the parent company for the original baseline to be maintained because they were performing. 

A figure of £30.2 million was agreed by the Ministry with regard to some technical variations with providers, which related to the source of the data used to calculate the volume of casework by CRCs, and £43 million was agreed with CRCs to deliver an enhanced through-the-gate specification right through to the end of 2020. There was £213 million that was a marginal adjustment factor change; in other words, that was the change to the contracts made back in 2017. That payment was made to rectify the original assumptions that we know have been looked at carefully by the PAC and which I know you understand. 

There was an £82.2 million additional fee for service payments made to CRCs in the financial years 2016-17 and 2017-18, but, as I have said, because of the underspend of £1.4 billion, you take that into account and, although that money has been significant, the overall net sum that we are not spending—it is a bit inelegant—or the net money we have avoided spending because we ended the contracts earlier is £800 million. 

Q393 David Hanson: But by ending the contracts early you are still going to spend that money in some form or other in the next couple of years, but not with the current CRCs. 

Robert Buckland: Yes, but it is an important point— 

Q394 David Hanson: As a taxpayer, Minister, what I am interested in is that the National Audit Office has said that the cost to the taxpayer is £171 million. I want to hear from you whether you agree with the National Audit Office or whether you can publish figures that show a different form of defence. I would appreciate that.

Robert Buckland: With respect, I have gone through the figures with you because you deserve particularity. I know you would insist on nothing less as a former Minister for Prisons yourself. 

What I am saying is that the projected overall spend on the contracts was going to be £3.7 billion. By ending them, we spend only £2.3 billion. You then add on the £470 million I have talked about. I am not giving you a conservative estimate. There are other rounding figures that mean an overall £800 million underspend. 

Q395 David Hanson: Has it been a good deal for the taxpayer, Minister? 

Robert Buckland: I have acknowledged that there have been problems with TR. That is why we are making these reforms. I am sitting here telling you frankly that we think we can do better, of course; but it would be wrong to say that overall, looking back on this period, we will have ended up spending more than the projected £3.7 billion. In fact, we will be spending £800 million less than that, which I think is an important overall framework in understanding where we are financially. 

Q396 David Hanson: How much additional money have you put into the current CRCs for 2018-19? 

Robert Buckland: I do not know whether Jim has any more granularity on that. 

Jim Barton: You will appreciate that this is a reasonably confused figure, because, within the £467 million total, some payments, essentially, are backward looking because they correct assumptions in the original payment mechanism; some of them reflect adjustments to the ongoing monthly payments that we make—the changes to the fee for service mechanism that we made in 2017—and some of them are straightforward top-up payments to buy new services. 

On the specific question about 2018-19, the changes we have made previously that will impact this year are the £22 million additional spend on a significantly enhanced through-the-gate service. That service is now live in all bar four resettlement prisons, with 500 additional staff in post delivering improved support for offenders pre-release. The changes that we made to the frequency baseline that the Minister referenced previously mean that as a result most CRCs would, if we had not made those changes, have been paying us because of underperformance on the frequency measure. Most CRCs are now in a position where their frequency payments hover around a zero figure. 

As the Minister pointed out, we believe that the change in the frequency baseline was, with the benefit of hindsight, absolutely the right thing to do, because the deterioration in performance between 2011 and 2015 happened before the CRCs existed or were under private ownership. If we had our time again, we probably would not have signed a contract that linked frequency payments to a baseline in 2011 that we and providers did. Last year, we made the choice that to enforce that element of the contract would have meant that contracts would have been underfunded. The consequence of that is a poorer probation service. That is not in our interest. 

Q397 David Hanson: What is the plan for payments for 2019-20 until the contracts expire? 

Jim Barton: We will apply current contractual terms, so it will depend on the volume of work that CRCs do and their performance under the PBR mechanism. 

Q398 David Hanson: What is your rough estimate of the net cost to the Department of that contract for 2019-20? 

Jim Barton: That is included in the figures you cite. When the NAO rightly says that the cost of those contract changes is £467 million, that extends from the date we made the changes to the end of the contract. For example, through-the-gate is £22 million a year, and £43 million in total between the point when we made that change and the end of the contracts. 

Q399 David Hanson: In a previous session with Richard Heaton, we asked for a breakdown of the costs for each CRC, and the net plus or minus figure for each CRC. I have a letter from Richard Heaton dated 8 April in which he says: “You also asked for a breakdown of costs for the financial year… We are still finalising our year end position, so are not yet in a position to provide this data. We will provide you with an update as soon as we are able.” Do you know when that will be? 

Robert Buckland: I will take that away and make sure that the Committee is furnished with that information as soon as possible. 

Q400 David Hanson: This is the final question from me on financing. In May this year, the permanent secretary, Richard Heaton, required a ministerial direction to process payments to CRC subcontractors because he could not reconcile those payments with his duty as accounting officer. Why could he not reconcile those payments? Why did the Minister overrule the decision of the accounting officer? 

Robert Buckland: I do not have the information before me with regard to that particular decision. I accept that the procedure is not one that is commonly used. 

Q401 David Hanson: It has not been used generally in the last 10 years. 

Robert Buckland: I accept that, Mr Hanson. It is a matter on which I will want to furnish the Committee with full information. I do not have it to hand. 

David Hanson: I am grateful for that, Minister. Could we have an explanation as to the reasons why the accounting officer’s decision to rule out payments to subcontractors was made by the Minister, unless anybody at official level can help?

Q402 Chair: It will be helpful to have that. 

Mr Barton, you talked about proceeding on current contractual arrangements until they terminate. Is there a risk of any further payments being necessary? You are working on the current volumes and assumptions until the end of the contract. Those assumptions of workload proved erroneous and unreliable in the past. Is there still a risk that we may need further bail-outs for some of those firms? 

Amy Rees: As Jim outlined quite clearly, the contracts will operate in the way we have now set out. The package to which we have been referring in terms of the £467 million was one that we designed in order to take us to the end of the revised contract period. We believe, from the best knowledge we have, that that will be enough to stabilise as we go forward. Having said that, in the way we have just described, the contracts are built on changing metrics. Did they reduce reoffending? Is that binary or is it among the reoffending group? What happens to fee for use? What happens to the rate card? Lots of elements can change over the next two years, so it is impossible to say it will be exactly as this, but in good faith we negotiated those contract changes in the belief that they would take us to the end of the contract period, and that would be sufficient to stabilise the system. 

Q403 Chair: I think the Committee is rather in favour of the change you made. There remains a risk, but your view is that it is a manageable one. 

Amy Rees: There are lots of changing numbers, and multiple parts and frequencies, which mean that it is difficult to say, when you take all of that, that there is no risk at all, but we believe we have taken steps to eliminate the risk as far as we can. 

Q404 David Hanson: Can I get a commitment from the Minister, helpfully, for the Committee? When the period with the current CRCs has been finalised and completed, will you agree to publish a cost analysis of the final package for the costs of CRCs and the changes from 2011 to 2020? 

Robert Buckland: What we can do is provide as much information, with as much granularity as possible, for the Committee, so that we understand the whole period. What that will look like precisely I cannot tell you now, as Amy has said, but in terms of learning we have had to deal with a number of issues—for example, Working Links and what has happened in Wales as well. We have the learning and experience of the model now to deal with any contingency issues that might arise between now and the end of 2020. 

Let’s not forget that the issue was the profile of offences and the unforeseen outcome that was the increase in serious offences that had to be dealt with by the NPS. The workload of the NPS increased in a way that perhaps had not been foreseen, which meant that there were fewer of the less serious offences that would have been dealt with by the CRCs. 

Understanding that fundamental reality can perhaps inform as fully as possible not just members of the Committee but the wider public about the scale of the challenge that CRCs faced.

Jim Barton: On the question about further contractual changes, you will have noticed in previous evidence that we had planned to end current contracts on 4 December 2020, but in our announcements on the future direction of travel we are referencing transition happening in spring 2021. We think we need to take the time to manage transition well. That is a hard lesson learned from transforming rehabilitation. To provide us with the small number of additional months needed to do that, we have an option to extend CRC contracts into the first half of 2021. We have recently published, through the Official Journal of the European Union, notice that we have that option and that we intend to make that contract change. That would be on amended contractual terms. 

Q405 Chair: I understand that. Perhaps hard-wiring anything by an absolute fixed date is never wise. 

Robert Buckland: That’s right, Mr Neill. As Jim said, the pace of change is different from the period prior to the introduction of TR in 2014. We will be developing our business case by late summer and looking to move on to the next stage, the competition stage, in the autumn. You are looking at a clear set of milestones within which there will be a lot of work that I will be keeping a very close eye on, because I get the point that we have to get the commissioning right. You will be bearing down upon me very hard if we do not, so it is very well understood. 

Chair: That is fair enough.

(To be continued)

Plan A, B or C?

Without a doubt 'probation' finds itself at a crossroads once more and on the verge of yet another major upheaval. Speculation abounds and anxiety levels are raised, but all those who have probation in their blood and care deeply for its future know the current omnishambles simply can't continue and the government must act to repair the damage brought about by its split in half. The question is, how?

In the absence of other forums, Facebook is rapidly becoming a platform for considered and insightful debate by practitioners and some feel it deserves to be brought to a wider audience. In this vein David Raho, one of Napo's Vice Chairs, has agreed to my sharing contributions he made back on 4th May and which I believe help explain the current situation:-   

In his comment on the Public Accounts Committees report Bob Neill says:

"The Ministry needs to sort this mess by setting out a new, clear strategy for the future of probation services, which is rigorously tested and not rushed through, when it announces plans for the next generation of Community Rehabilitation Companies due soon."

This is an unprecedented message showing a high degree of agreement and similar observation across government committees, the National Audit Office and inspectorate. Surely Gauke cannot simply carry on regardless against the deluge of criticism and calls for a rethink of proposed plans. So, do Bobs comments indicate that MoJ Plan A is still in play or is he hedging his bets or alternatively is he being deliberately ambiguous as he knows the responsible minister has gone and this now risks delays?

May appears to be having difficulty finding someone to take on the job (anyone would think she was distracted by something) and the longer this key post remains unfilled by someone who appears competent the more chaotic and desperate her government will seem on every front. Will the appointment of a new minister scupper any hope of reconsideration of Plan A (TR2) or work on Plan B (Trust+) and as for Plan C (full return to public sector)?

Surely the MoJ would not be keeping the Justice Committee Chair in the dark regarding the future shape of probation or maybe nobody really knows?

David Raho

Chair's comments

Commenting on the Public Accounts Committee report, Transforming rehabilitation: progress review, Chair of the Justice Committee, Bob Neill MP, said:

“This damning report from the Public Accounts Committee backs up the findings of our own inquiry that it is doubtful the Government’s disastrous reforms can ever deliver an effective or viable probation service. As well as laying bare the eyewatering cost of terminating contracts which should never have been entered into in the first place, the report also highlights the failure to improve support or reduce reoffending. This has a real human impact: more victims of crime and more wasted lives as offenders ricochet in and out of custody.

We are also seriously concerned about the decline in judge and magistrate confidence in community sentences - even though these sentences generally lead to better outcomes.
We said back in June last year that the Government should review into the long-term future and sustainability of delivering probation services, including how TR might compare to an alternative system. They didn’t start such a review and ten months later we are still waiting for a full response to our report.

The Ministry needs to sort this mess by setting out a new, clear strategy for the future of probation services, which is rigorously tested and not rushed through, when it announces plans for the next generation of Community Rehabilitation Companies due soon. We sincerely hope that the change in responsible Minister will not delay things any further.”

--oo00oo--

LET'S GET THE PROBATION REFORM PARTY STARTED

The heightened media interest in probation recently is no coincidence. Many of those who have an interest in probation and keep an eye on developments can read the tea leaves and know that there has definitely been something brewing deep within the bowels of the MoJ. But be warned that trying to visualise what is fermenting in that dark place will ultimately suck out your soul. One has only to observe the ragged groups of glassy-eyed MoJ employees clustered around the doors of Petty France desperately chain smoking and drinking multiple cups of coffee before dashing back into the teleportation tubes to the 9th floor. It's grim but that's what happens when you are asked to keep working on Plan A and then asked to come up with a workable Plan B and even the previously unthinkable Plan C. The atmosphere is like the NASA control room when Apollo 13 was in trouble (Where is Tom Hanks when you need him? Can we achieve a reunified functioning probation service relatively free of government interference?)

Increased recent media coverage of probation is also no doubt catalysed by the public interest piqued by the continuing saga of Graylings failures and the mystery of his continued employment as a minister. Grayling is the journalist's gift that keeps on giving. What fresh failure will occur? What will be the scale of the disaster? Is there anything he hasn't ruined destroyed or is in the process of cocking up big time? If I was an editor with one story short I'd send the new appointee out with the brief 'Find Grayling, find out what he is doing, write about how it is bound to fail, draft a follow-up saying how it was a dead cert for failure and how we saw it coming given the long list of previous disasters'. What we do know is that if May goes Grayling will probably go too but that is what should happen in ‘normal’ times. Times are far from normal.......

Then there are all the recent reports confirming what we already know to be the case about the TR omnishambles. But thanks to the inspectorate, NAO, Howard League, CCJS, PAC, Justice Select Committee etc, however, what we now have is evidence from a variety of reliable sources. Evidence confirms that a divided part-privatised probation service doesn’t work well and was and is a very bad idea indeed and needs sorting out properly rather than just continuing with a failed model albeit expanded with the same players. Stop. Pause. Think again!!! A colleague who was once seconded to NOMS recently described to me how the MoJ continues to make the same mistakes over and over. 'They start out looking at a regular teapot. Somehow decided that a chocolate teapot would save money and that they have somehow decided is the best solution. They then ask the private sector to make more tea using fewer tea leaves expecting them to use a smaller flashy looking streamlined teapot and then wonder why they land up with a sticky mess and everyone is blaming each other'.

What some of us have long been engaging in is an attack on the false narrative that Grayling generated that the probation service had failed to supervise and address reoffending in the case of those serving prison sentences of 12 months and less and was somehow a failing service. The fact was that probation services were not failing before Grayling and his cronies started TR and were aware of those they had not been authorised and/or directed to supervise and were perfectly willing to this work so as long as the government were prepared to fund the increase in resources required – as you would expect. 

Regarding the supervision of those serving prison sentences under 12 months. After putting the legislation on the statute books New Labour looked at the figures and decided that they were not going to implement Custody Plus as they rightly estimated that though desireable the cost/benefit analysis didn’t add up. Better to put the money into other services. The Select Committee on Justice 5th report (published 2008) made clear governments failures -not probations - to tackle short sentences. It makes interesting reading. It is obvious that Grayling and those who supported him chose to completely ignore this report. It is also obvious that he lied when he placed the blame for failing to work with those concerned on Probation Trusts.

During TR, when lack of supervision of those serving under 12 months was repeatedly used as an overwhelming justification for privatisation, Probation Trusts offered to do the work in-house despite their reducing budgets. Grayling rejected this option. Quite how this would have been achieved, given the cost, was not explained in detail however compared with what happened (the through the gates debacle) it would probably have been preferable to have bitten that particular bullet if it had meant remaining as devolved and locally connected Probation Trusts. 

However, as we know to our cost we were not dealing with rational persons back then but instead with those who saw fit to ignore experts, practitioners, their own risk registers and evidence relevant to the way probation had worked for over 100 years as slightly removed from central government with strong local links. Grayling had looked around the MoJ for soft targets to privatise and found probation – lawyers were a tougher target. 

Grayling and others like him, let us remember he started his political life as a Liberal, no doubt he saw probation not as successful collection of joined-up Trust organisations with a reasonable amount of confidence from the public and sentencers contributing with others to a criminal justice system that was ultimately reducing crime, albeit slowly and steadily, but rather as a failure in addressing reoffending quickly due to public sector sluggishness and inefficiency. He saw public sector probation plodding along doggedly resisting some of the sweeping changes that had beset many other professions and those delivering public services and needed a shake-up. He had advisors and Tory think tanks all bending his ear saying that the probation service could be made more efficient if only pressure was brought to bear upon them to perform better or they used more innovation etc. The solution he chose was to privatise as much as he thought possible by creating an artificial market and using PBR. 'Let market forces bear down upon them and the private sector knock them into shape.' It all sounded so good to his Tory friends around the dinner table (no experts welcome) who roundly supported him and praised him for his audacity not appreciating that he was, in reality, a serial loser of stupendous proportions.

The idea of private providers all doing their own thing with freedom to develop their own solutions was, of course, deliberate as what was meant to happen was for certain players to act as disruptors to the status quo and win the competition by finding the magic bullet that had so long eluded the probation profession who were portrayed as failures and incompetents. The new providers were to act as new brooms with fresh ideas and perform as well if not better than the public sector had done for reduced cost a win-win. We know the result. We also know how he contrived to tie the NPS so tightly in bureaucratic knots that they would start to believe the delusion that they were indeed some kind of elite civil service organisation - ripe to be privatised down the line. 

So pause for thought now. All the reports and all those experts who know a thing or two and are not in the pay of the Tory party are more or less in agreement regarding what should ideally happen to probation. The question is now whether the government has the courage to grasp the nettle and do what is required rather than pander to pressure from their pals.

1) A reduction in private sector involvement in delivering core probation services with a view to private probation service providers moving to commissioned services under the public probation banner (much like electronic monitoring services are in more enlightened jurisdictions).

2) A reunited service that is not simply an expanded NPS (the NPS is a very dysfunctional model) but rather a return to public sector status with a little distance from central government. This might mean a return to Trust status and for those in the NPS to give up their pseudo civil servant status (probation officers should never be civil servants).

3) A more locally accountable probation service. Although PCCs and Mayors have been mentioned as becoming de facto probation bosses this does not have to be the case. Probation was previously 80% Home Office and 20% local authority run which in most cases worked very well. Let us not forget that there has been a movement away from the probation service being as locally accountable as it used to be without it becoming too parochial.

4) Bigger probation areas with powers to commission local services that are as far as practicable co-terminus with police areas. I have previously used the term Trust+ when talking about what probation might look like. 

If the government do find the courage then I’d like to see a new national probation service as being potentially bigger, better, faster, stronger and more connected and coordinated than the previous Trusts working with our service users as we should. It is what the public expects and deserves. Despite everything, some (not a lot but some) innovation has been achieved by private probation providers and millions and millions of taxpayers money spent during the TR debacle. This should not be wasted. The MoJ needs to buy all the good stuff up and then roll the best of it out as already tested in the new Trust+ system and get everyone back working in the same way together in an even more effective way than previously. It's an opportunity and a challenge that we might actually relish for a change. It is possible and can be done but not necessarily by the lot currently in the driving seat. This would be the chance to rebuild our profession the way we know it will work best and work in ways we know from experience work and are in the public interest and will benefit all our communities.

Trust+ would see all staff on the pay system developed for the NPS, using easier to use IT systems such as MTCs OMNIA and smartphone apps better hardware. We could all be classified as local government officers (payroll and other HR and support services provided by the local government). I have always regarded myself as an LGO and we tend to fit that definition better than a civil servant which is essentially a government lackey (look up and compare the definitions and choose how you would prefer to be labelled). The key characteristic of a true civil servant is that they can transfer between government departments retaining terms and conditions of employment. Anyone know anybody who has managed to do this? Most people in the NPS would have trouble transferring between LDUs.

If I had the time I could probably work out most of the operational detail and funding for the MoJ (who would spend a million on finding the best way to make a cup of tea and still forget the milk!) and it would probably not mean large amounts of additional expenditure. Why on earth wouldn't you want to do this now whilst some of the expertise is still around that can make it happen? A large number of potentially motivated probation staff are currently dormant, like sleeping giants, awaiting activation. It's up to you MoJ. Your move.

David Raho

(published with author's permission)

In response to a question:- 

‘Bigger, better, faster..’ Sorry, I agree with pretty much all of what you say but please, this language...it makes my heart sink. We work with humans. And we are humans too. It’s complex. It takes time. And small can be beautiful.

David Raho explains:-

I meant to contrast what we have become with what we could be if given the resources. It’s a reference to 70s Sci-fi TV show The Six Million Dollar Man whose opening credits featured the main character in a major experimental aircraft crash as a voiceover went on to say ‘We can rebuild you. We have the technology....’ make you better than before etc which I think should be our aim to progress but retain probation's identity. As opposed to the present services that are too lean to function, poorly performing and so resource starved in parts that it is now too slow to respond to meet service user needs. I’m old school social work probation trained and very human orientated but it doesn’t matter how you are as a practitioner you can’t realistically provide a quality service when you only have half a team, constant change, and huge caseloads. There are a lot of people who will flock back to probation if it is reunited and properly back on track. We need to reject a lot of the current nonsense and return to basics.

Obfuscation Masterclass 4

Q66 Chris Evans: I want to move on to the contracts. When I first came into this place nine years ago—would you believe?—I served on the Justice Committee between 2010 and 2012. Serious issues were being raised at the time, especially within the justice system and NOMS, about payment by results. That was raised by the Justice Committee on several occasions even after I left. Why did you use payment by results in this case, even when there were concerns for the probation service? 

Sir Richard Heaton: As Mr Spurr tried to explain earlier, there was, I will not say a philosophical belief, but a belief, on some evidence, that if you incentivised providers to do the thing we cared about most, which was to reduce reoffending, they would economically be driven to do things that achieved that result, and therefore a payment-by-results mechanism would be the right mechanism to incentivise and reward them. There was some evidence for that, I think, from the early signs from the Doncaster and Peterborough trials—that actually there were innovative, amazing things that new providers could do, with fresh insights, that would improve recidivism. I think on the back of that evidence, payment by results was imposed. 

There was one aspect of payment by results that we have not mentioned, which has also caused us difficulties—in a spirit of complete candour. There is nothing wrong with payment by results to provide a top-up where something has been achieved, that you want. I think a failing in these contracts—or a flaw in these contracts—was that we failed to safeguard the core costs of delivery. What you should not do when you are designing a payment-by-results contract is allow the core costs of public service delivery to be jeopardised by failure to achieve payment by results. If you are trying to achieve a public service you need to pay for it. Payment by results as a top-up for an additional benefit is, I think, more respectable. 

Q67 Chair: I am going to ask Mr Lodge, from the National Audit Office, to give us some clarity on this point. 

Oliver Lodge: I just wanted to point out for clarity, as it has been mentioned a couple of times, that the Peterborough and Doncaster pilots were quite different from the model pursued under Transforming Rehabilitation, in the sense that they were based within prisons. My understanding is that participation in them was voluntary, as well, rather than compulsory. So there were some significant differences. 

Sir Richard Heaton: You are quite right, and the Peterborough one was a social impact one, which is absolutely not the model we have used here. I only adduced them to illustrate what was in the air, which was that there was a feeling that if you created the right financial incentives people would do interventions which would— 

Chair: We have certainly covered this in previous work we have done— that these were not piloted. We have talked today about the breakneck speed, so we know some of the challenges. 

Q68 Chris Evans: Rather than innovate, payment by results placed additional financial pressure on CRCs. 

Sir Richard Heaton: It did, indeed. 

Q69 Chris Evans: How did that come about, if you were just looking for results and innovation? 

Sir Richard Heaton: As I say, I think because the measure was not one sufficiently within their control, partly because of the time lag and partly because reoffending is really complicated and depends on factors like housing and access to benefits and so on; and partly because—I think 18% of the contract value was through payment by results—effectively it put too much at stake, and if they failed to achieve the targets not only did they not get that reward but their cost base was undermined, so it was an element of the contract, which, I think, looking back on it, we should have done differently. 

Q70 Chris Evans: Before I move on from this section, obviously lessons have to be learned. What has been learned about the payment-by-results model, and about contractors’ overcost? 

Sir Richard Heaton: For me, it would be the point I have just made: you must not put payment for core services at risk. Secondly, the reoffending rate is possibly the wrong measure, because it is too attenuated. I would go for proxy outcomes instead. Thirdly, I think, it assumes that the system is prepared to accept zero intervention. In other words, it assumes that the system is ambivalent as to whether an intervention takes place, whereas, as we have discussed, the system, including ourselves and including the inspector, actually requires interventions to be made. So payment by results, which implies you can do nothing if you think that is the best way to achieve a result, is not satisfactory. Those would be my main learnings on this point. 

Chair: So they will inform your next procurement. 

Q71 Chris Evans: I want to go on now to ICT systems, and I have to say this is like groundhog day. It seems every Government Department in front of us has problems with IT. Could you just go through the problems you have had with the gateway system, please? 

Sir Richard Heaton: I will start and Mr Spurr may wish to fill in the details, again. When the probation trusts came into the Ministry they brought with them, as you might expect, many different computer systems, none of which were compatible, and many of which were not very good. A successful effort was made to choose the best of those and to create a national system. There was then a commitment made, during the course of transfer of rehabilitation to the CRCs, that we would deliver what we called a strategic partner gateway, which was quite a complicated software gateway into our system, so people could plug into it. We were 12 months late in delivering that. We did deliver it in September 2016, but 12 months too late. That commitment was probably made at a time when things were moving very quickly. Again, in retrospect, it probably was not the right commitment. A better one would have been to say, “We’ll put our national system on to the cloud and provide modern API interfaces, and you can simply plug into them,” which is how we would do it these days. We promised a rather cumbersome, old-school way of connecting up, and it was 12 months late. We acknowledge that that was a fault. 

Q72 Chris Evans: You have paid out £23.1 million in compensation to various CRCs. Do you think that this has damaged your reputation, and the confidence that CRCs have in working with you in future? 

Sir Richard Heaton: I hope not. We have a very constructive relationship with the CRCs, both the probation officers on the ground, who are excellent, and their management. I hope that we dealt with this in the course of our long and difficult contractual relationship in a professional way. I do not think that it has undermined their overall confidence in us. It was one of those things that did not go as well as it should have done. Do you have a different perspective? 

Michael Spurr: No, I think you have summed that up right. Getting a national system for probation was difficult in itself. That took longer. We did put it in place. We were delayed in putting in the partner gateway. A lot of the providers themselves have found their own difficulties in developing their own systems to link into that gateway, which demonstrates for all of us that this is tricky. The world moves on very quickly. The cloud options were not seen then in the way that they would be today. That makes things more straightforward. Having a national system, whoever is delivering the service, so that everybody has one care system to work through is important. That is one of the things that we take from this. 

Q73 Chris Evans: Why are so few CRCs using the gateway system? Is the lack of confidence a reason? Why are they opting not to use it? 

Michael Spurr: The majority of them have chosen to continue to use the national system that we produced, nDelius, itself directly without using their own. Two are using the gateway to link into our system, and some have developed some of their own, but there are various reasons why they have done that. Forgive me for saying this again, but they have spent some money on this in terms of innovation; I suspect that they have decided to spend no more money on it, given where we have got to. 

Q74 Chris Evans: Could you clarify something in the report? Paragraph 1.11 says: “By January 2019, only two CRCs were using the gateway, seven were still working towards introducing their own systems, and 12 CRCs had decided to retain HMPPS’s systems rather than introducing their own.” Could you clarify that? 

Michael Spurr: I think that is what I was trying to say—12 of them have decided not to put their own systems in place, but to use ours. That was an option for them. The reason for the gateway was to say, “You can take the case data that we have from the central system, but if you want to use it in a different way within your own system, as long as we have the information on the central system, you can do that.” Initially, everybody thought that they wanted to do that; 12 of them are simply using our national system. They have not invested in doing other things with that. 

Q75 Chair: Presumably they pay you a fee to use the national system—do they? 

Michael Spurr: I don’t think they pay a fee. We want everything on the national database, so— 

Q76 Chair: So it is cheaper for them to use the national system. 

Michael Spurr: Well, they haven’t had to develop their own system, so— 

Chair: Exactly, so it is a lot cheaper for them. That is presumably a driver. 

Q77 Chris Evans: If you are able to, and it is not commercially sensitive, could you tell us how many legal claims you have against you for delays and the impact of those delays? 

Sir Richard Heaton: I think we have settled, as part of the negotiations, so I do not know the detail. 

Michael Spurr: I think on the IT we have settled, but we can let you know. 

Chair: You can write to us. 

Q78 Chris Evans: How much was the cost? Would you be able to share that with the Committee? 

Chair: You can share it with us privately, if not publicly. We would like everything to be public. 

Sir Richard Heaton: I will do what I can in the meeting. I might have it here, but if not— 

Chair: That is a couple of things that we have asked you to write to us about. 

Q79 Chris Evans: I will just end with two last questions; I know that my colleague wants to come in. I want to talk about parent company guarantees. They froze out the voluntary sector, and did not protect the taxpayer. What have you learned from that? 

Sir Richard Heaton: You are right: it made it a difficult field to enter for the voluntary sector. Having said that, parent company guarantees serve a purpose. They mean that the taxpayer and the system are protected from the insolvency of a subsidiary. They are useful in some situations, and not in others. It is fairly standard Government contracting practice to seek one. The Government are not the only player that seeks guarantees of this sort. It is one of the obstacles to voluntary sector players being prime providers in this field, but not the only one. 

Q80 Chris Evans: Okay. Voluntary organisations obviously play a massive role in the justice system. How are you going to ensure in the future that they are involved in any procurement? 

Sir Richard Heaton: That is absolutely going to be part of the design for the next iteration of these services, when Ministers announce them. We would like there to be greater voluntary sector involvement in this field. 

Q81 Shabana Mahmood: Before we talk about the future of probation services and your re-procurement process, can we talk about Working Links? Why were the three Working Links CRCs not brought back into public ownership at the point at which it became obvious that the company was going to go into administration? 

Sir Richard Heaton: We were aware in advance that Working Links was in difficulty and we prepared a number of contingency plans. It would have been possible to bring them into public ownership. On a balance of risk and cost and operability, we decided that this outcome was the correct one in the interim. The work has been taken over by a small CRC, which is doing well, and persuaded us that it was well able to take the work on. As a pragmatic move, that seemed the right way to go for us. 

Q82 Shabana Mahmood: Are you confident that that decision will result in the best possible outcome for the taxpayer when we are picking up the tab further down the track? 

Sir Richard Heaton: By definition, it is a short-term outcome, because the contracts are now due to terminate earlier, but yes—of the various options available to us, it was the best outcome for the taxpayer. 

Q83 Shabana Mahmood: Aurelius is the German venture capital company that bought Working Links in June 2016. Can you tell us whether they are the purchasers’ guarantor for the Working Links contracts? Sorry—the parent guarantor. 

Sir Richard Heaton: No; the parent company guarantee in this situation remained with Working Links and Aurelius did not offer us an alternative parent guarantee. 

Q84 Shabana Mahmood: Will that risk transfer to the Ministry of Justice? 

Michael Spurr: Working Links are in administration. We are going through a process of administration. They hold the parent guarantee at the moment. We will have to work that through with the administrator. 

Sir Richard Heaton: We have reserved our rights under the parent guarantee vis-à-vis the defunct company. 

Q85 Shabana Mahmood: So we will have to see how the administration process unwinds. What is your assessment of the current state of probation services in Wales and the south-west, given the collapse of Working Links? 

Sir Richard Heaton: Michael might have a better operational view, but I think I would distinguish between Wales and the south-west. The southwest, as you will know from the inspector’s report, was not in a great state. Wales was in a slighter better state. We are confident that the new provider has got the bandwidth, resources and motivation to do well. 

Q86 Shabana Mahmood: What is the current operational assessment of the quality of the services in those two regions? 

Sir Richard Heaton: Poor, in Devon and Cornwall. Better in Wales. Do you have more detail than that, Michael? 

Michael Spurr: That’s it. Unacceptable provision, frankly, in the southwest. Wales is significantly better. Unacceptable, as evidenced by the inspection and by our own audits, which was why we stepped in, alongside the administration. The two went together. 

Q87 Chair: What about the continuity? I have a constituent who is trying to move from London to Wales. There have been a lot of hiccups, which I may write to you about. Do you think that is anything to do with the handover from Working Links to the new provider? 

Michael Spurr: Continuity for? 

Chair: Of case load. 

Michael Spurr: Oh, I see what you mean. 

Q88 Chair: If someone is in the system, are they guaranteed a seamless service? I only have one anecdote, but how should it be? 

Michael Spurr: I don’t think the operation was working—well, I know the operation wasn’t working well. Ms Flint asked before about staffing numbers. The staffing numbers are not sufficient to make that work properly in the south-west. 

Chair: In the south-west and Wales. 

Michael Spurr: Yes. That is one of the reasons that we needed to address that. That is something that we have said very directly that we need addressed. That will be addressed. I am sure that will have affected some of the transfers, but I don’t know the precise detail. It is less so in Wales, so I would have expected it be easier to have achieved that in Wales. 

Q89 Chair: But you are sure that the handover is being worked through. 

Michael Spurr: At the moment, we are very happy with the way that that has been going, but I am not underestimating how difficult that is going to be, given that that service provision in the south-west has been so poor. 

Q90 Chair: Did staff TUPE over? 

Michael Spurr: Yes. 

Sir Richard Heaton: If you have a constituent’s case that shows otherwise, please do let us know. 

Chair: I certainly will, if I need to. Back to Ms Mahmood. 

Q91 Shabana Mahmood: How confident are you that your contingency plans can handle the failure of bigger providers such as Interserve? 

Sir Richard Heaton: We are pretty confident that we have good contingency plans. 

Q92 Shabana Mahmood: Pretty confident? 

Chair: For the record, Ms Mahmood is looking sceptical. 

Shabana Mahmood: Can you try to bottom that out? 

Sir Richard Heaton: We have a large contractual exposure across every part of our business, and we have had to step in in all sorts of ways: after Carillion, for example, with the management of Birmingham prison, and with Working Links. So I think we have good contingency plans. 

Q93 Shabana Mahmood: Previous failures have given you some good experience to draw on, but given that no company can control more than 25% of the total market, what practically are you going to do if somebody else fails? 

Michael Spurr: As in this case, we have the option to step in directly, and we will step in— 

Q94 Chair: But that is now your only option. 

Michael Spurr: It depends on which provider we are talking about, doesn’t it? It is not the only option for all those providers. We have a range of options, which include, if we are able to do this, using other providers, and stepping in directly. 

Q95 Shabana Mahmood: Finally, on the employees of Working Links, what action have you taken in respect of pensions? 

Sir Richard Heaton: I assume the staff have been TUPE-ed over in the ordinary way, but I can write to you if there is a particular point on that. 

Q96 Shabana Mahmood: Yes, I think pension liabilities and what would happen were discussed previously, so if you could— 

Sir Richard Heaton: I will write to you on that. 

Q97 Chair: Of course, it depends on which pension scheme. There may be lots of issues. If you could write to us with what exactly is happening to staff who have been TUPE-ed over— 

Sir Richard Heaton: Yes, of course.

To be continued....