G4S stripped of prison contract
The firm at the centre of the Olympics security shambles has been stripped of its responsibilities for running Britain's first private jail.
G4S, which failed to provide enough guards for the London 2012 games, will stop running the Wolds prison in East Yorkshire, which will return to the public sector from next year, said the Ministry of Justice (MoJ).
The company, which also lost the other prison contracts it was bidding for, saw its shares plummet more than 3%, making it the second biggest faller on the FTSE 100 Index with more than £100 million wiped from its value. But in a surprise move, Justice Secretary Chris Grayling also announced a new approach to prison privatisation.
Private firms will be brought in to all public prisons to run maintenance, resettlement and possibly catering in a move which could save up to £450 million over six years. Think-tank Reform said it amounts to the end of competition for prison management between the public and private sector for the time being.
Reform director Andrew Haldenby said: "This is a dramatic U-turn which calls into question the Government's whole approach to improving public services. Competition has improved the prisons environment for both prisoners and staff. It has worked successfully for two decades under successive governments."
Mr Grayling said the new approach would "lead to better value for the tax-payer, linked to more effective services to reduce reoffending". He said: "The cost of running our prisons is too high and must be reduced. We can do this by being more innovative and efficient, and without compromising public safety."
Ministers also announced that competitions to run Northumberland prison, an amalgamation of Acklington and Castington jails, and a trio of South Yorkshire jails - Lindholme, Hatfield and Moorland - will now move to the final stage, with the two contracts likely to be awarded to either Sodexo, Serco or MTC/Amey next spring.
Their bids "produced a compelling package of reforms for delivering cost reduction, improvements to regimes and a working prisons model in these prisons", said the MoJ. But this was not the case for the Wolds prison in East Yorkshire, which is currently run by G4S; Coldingley prison in Surrey; Onley in Northamptonshire, or Durham jail, the ministry added.
The Wolds prison, a category C training prison holding up to 395 men, has been run by G4S since it opened in 1992, but will return to the public sector next July.
A G4S spokeswoman said she was "disappointed" by the announcements.She added: "Our performance across all six prisons we run has been to a high standard with every aspect of performance either meeting or exceeding the key performance indicators applied by the MoJ."