Union ‘vindicated’ after NAO investigation reveals disastrous financial planning by the MOJ

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PRESS STATEMENT

Tuesday 19 December 2017

Union ‘vindicated’ after NAO investigation reveals disastrous financial planning by the MOJ

The general secretary of probation union Napo says its members have been “vindicated” by a National Audit Investigation into the changes to Community Rehabilitation contracts across England and Wales.

The report published today reveals the MoJ has handed over an additional £342m of the public purse due to “unforeseen challenges” and “to reflect more accurately the cost of providing critical frontline services”.

However, the 21 CRCs still stand to lose £443m over the duration of the contracts owing to payment by results mechanisms built into the contracts.  

As of June 2017, CRCs had met only one third of their performance targets, despite the number of offenders being supervised increasing. While it was estimated the contracts would be worth £3.7bn over their lifetime, the MoJ has now had to revise this figure to £2.1bn based on client throughput and services delivered – the CRCs have categorically stated they are unable to maintain existing levels of service if they are paid at this lower rate.

Part of the problem is that the MoJ and bidders had overestimated the ability of CRCs to reduce their costs. It was originally assumed that only 20% of the CRCs costs were fixed – this figure has been now revised to 77%.

Napo General Secretary, Ian Lawrence, said: “This is a result of a rushed through ideology that had not been fully costed at the outset. Taxpayers are now propping up private companies and receiving a worse service for their money. In the meantime CRCs are cutting back on staff to save money and this in turn is putting the public at risk”.

Enquiries should be directed via General Secretary Ian Lawrence on 07788 118005 or Tania Bassett 07904 184195.