“drive…reductions in reoffending”.

Had these pilots gone ahead, we would have had more than a year’s experience of this sort of model, but unfortunately the current Secretary of State cancelled them as soon as he took up his post. When we ask, as Opposition Members rightly do, how well these proposals work, there is no evidence with which to answer the question, because the Secretary of State has not tested them, and does not intend to do so, to see whether they work. If he were here, I hope the hon. Member for Reigate would be tempted to vote for new clause 4, because he seemed to support the principle when he was a Minister.

We are left, then, without any evidence and without a pilot, and we have lost the opportunity to test the details of these plans on a much smaller scale and with a manageable level of risk. Inevitably, there will be teething problems and inexperienced providers, there will be failures in communication and there will be glitches in the new IT system. We have just had an hour’s urgent question on the difficulties of introducing a new IT

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system, yet here we are implementing one at the same time as a wholesale upheaval and sell-off of the service. All this will have to be contended with all at once and on a national scale.

Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op): My hon. Friend is no doubt aware of the fiasco of the IT service for interpreters in courts, which, dare I say it—ironically—is another Ministry of Justice success story. Does that not underline her point?

Jenny Chapman: My hon. Friend is completely right. Serving on the Public Accounts Committee, she will be familiar with the manifold problems that the MOJ has with commissioning and procurement. I will refer later particularly to the court interpreters contract and the inclusion of small mammals, which hon. Members might find surprising.

We have recent experience of the fallout from a botched implementation. At the end of last year, universal credit was slowed down, for its own good, after being poorly managed and heavily criticised and after wasting what was predicted to be millions of pounds of taxpayer money. The Work and Pensions Secretary assured Members that the programme would eventually work because under the timetable they were

“testing the system and learning first, and then finally implementing it.”

When I asked him, he said that I needed

“to understand the difference between an approach that rolls something out at every stage and learns from it”—[Official Report, 10 December 2013; Vol. 572, c. 139-144.]

and an approach that rushes something in and sees it fail. Well, I think he is right, but I am well aware of the difference. It is just a pity that he has not had the same discussion with the Justice Secretary.

After the recent track record of the Ministry of Justice in mismanaging procurement processes, the PAC recommended that the Ministry

“should draft and implement future contracts so as to minimise transitional problems, for example through piloting and rolling-out new systems gradually.”

The NAO agreed and reported that steady regional roll-outs would allow the Ministry to limit the effect of poor performance. But rather than learning from past mistakes and introducing his reforms at a sensible pace, the Secretary of State is instead opting for a national roll-out at breakneck speed. The operating model for the reforms was published only in September, yet if it all goes to plan trusts are supposed to be abolished by April. Lord Ramsbotham described the timetable as a party political time frame

“that pays no attention to practical reality.”

Alison Seabeck (Plymouth, Moor View) (Lab): My hon. Friend is certainly reinforcing concerns raised by officers in Devon and Cornwall about the way in which this is being handled. Although they are unhappy about the whole process, they would be prepared to consider operating within a pilot to see whether it had legs, to put it crudely. Does she agree with that?

Jenny Chapman: It will not surprise my hon. Friend to know that I do agree. I visited the pilots when they commenced and was impressed with the entrepreneurial attitude taken by trust chief execs and the desire to

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make them work. For all that the professionals involved had misgivings, the desire in the probation service to make whatever it is dealt work for the benefit of victims of crime and the offenders it works with is quite overwhelming. It is such a shame that those very organisations that have developed to become quite outstanding are going to be abolished.

Lord Ramsbotham said that the time scale paid no attention to practical reality and he is absolutely right. The Chair of the Justice Committee has said that there are

“significant risks in the pace at which the government intend to implement the programme.”

The Minister’s own officials describe the timetable as “aggressive” and a number of probation trust chairs have written publicly to the Secretary of State to advise that he must delay his plans or risk inevitable public protection failures. The chairs of Derbyshire, Leicestershire and Warwickshire probation trusts have, in turn, warned that the timetable is risky and unrealistic and has serious implications for service delivery.

The Ministry of Justice’s own assessment of the implications for service delivery are bleak. A leaked copy of the Department’s risk register reported an over 80 per cent. chance of an

“unacceptable drop in operational performance.”

We have been over this—I have lost count of the number of times that the Minister and I have had this conversation —so I know he will reply that it is not the Government’s practice to publish departmental risk registers. But as the information is already out there, does he not think that it would be beneficial for the Secretary of State to come to the House to discuss the possible risks with Members? I would like to know what an

“unacceptable drop in operational performance”

might look like when we are talking about the supervision of dangerous offenders in the community.

The area of the proposals that has raised the most professional concern is the issue of risk management itself. These are people who are in the risk management business. The Government’s plans will fragment the service and split up offenders based on their category of risk, with low and medium-risk offenders being managed by new providers while those deemed to be high risk stay with the public sector. The problem with that split is that risk is not static and regularly shifts. Around a quarter of offenders change risk category during their order and they do not just change it once or in incremental steps. Low risk can become high risk almost instantaneously if an offender’s circumstances change. The Government are institutionalising into this system a break, which we think is dangerous, where offenders whose risk escalates will have to be handed over to a different provider at the moment they are most volatile, with all the risk that that brings in terms of time delays and communication failures, which we know from other areas cause real problems. That is an unnecessary and, worse, a dangerous layer of bureaucracy that the Government should be doing all they can to avoid. The chief inspector of probation has warned that

“any lack of contractual or operational clarity between the public and private sector will, in our view, lead to systemic failure and an increased risk to the public.”

We find that deeply concerning.

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1.45 pm

The Minister has previously given assurances that providers and the national probation service will be co-located to ease handovers but I am not hugely comforted by that. He cannot guarantee that that will be the case in a few years’ time when providers have taken over their own office management; of course he cannot. Anyway, does being in the same building mean that an officer of the national probation service will have the time to monitor the entirety of a community rehabilitation company’s cohort as well as their own case load? It is just not realistic. Will the national probation service be guaranteed the resources and capacity to take over quite a high percentage of CRC cases if that is what it needs to do? We are not reassured, and neither is the profession, that that will be the case.

1.45 pm

Lorely Burt: My understanding is that within the CRCs there will be skilled professional people whose job it will be continually to asses the risk factor of low and medium-term prisoners. Would that not indicate that those issues are being covered?

Jenny Chapman: I would hope that there will be someone working in a CRC who could assess risk. The point is that whenever we have a transition between organisations, there will be different systems. The relationships will not be so strong and there will be scope for communication failures and for information not to be passed on. That gets to the nub of the concern felt by us and by those working in the sector about where the problems will arise with what the Government are proposing.

The Government have made much of the fact that new and inexperienced providers will only manage those who are low and medium risk. But the Minister knows that low and medium risk includes offenders who have committed sexual assault, burglary, violence against the person, domestic violence and other quite serious offences. All of them will now be under the supervision of companies that have no experience of managing this kind of risk. Alarm over this lack of experience of providers is part of a wider concern not only that the proposal is not fit for purpose, but that some of these potential providers are not properly fit to deliver it either.

The Government are, I know, painfully aware of the MOJ’s record on procuring services and managing contracts. After the somewhat infamous saga—here is the mammal bit—of the language services contract, the PAC concluded that the Ministry of Justice

“was not an intelligent customer”

and the Chair of the Justice Committee reported that “serious flaws” were exposed in the Ministry’s procedures and policies and that the process was a “shambles”. The NAO concluded that the Ministry

“underestimated the project risks when it decided to switch from a regional to a national rollout”

and allowed the contract to be operational before it was ready. I do not need to spell out the extent of the risk to public safety if these sorts of failures are allowed to occur in this exercise.

Perhaps because of all these problems, Ministers have pinned all their hopes on the payment mechanism. They assure us that success is guaranteed because providers

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will be paid by results. But Members will recall similar claims being made about the Work programme, in which every provider started by failing to meet its targets. Ministers have also so far been unable to tell Members exactly how much of a fee will be paid by results and how much the provider will get up front, regardless of their performance. My hon. Friend the Member for Rotherham (Sarah Champion) made an excellent point in Committee, when she said that when universal credit had been bailed out the original structures were still in place to provide services that the reforms could not. There was at least some sort of continuity. Given that the Secretary of State is planning to abolish every probation trust in a matter of months, what will be in place to protect the public? Should a provider fail or the entire roll-out have to be halted because of poor performance, nothing would be in place.

The performance of providers and the very real concern about failure brings me to new clause 5, which deals with contract management. It is designed to ensure better performance from providers and much better management of contracts by the Ministry of Justice than we have seen in recent years. I know the Minister will accept that this is needed. Now we come to the bit about the rabbit! The MOJ paid for a rabbit to be licensed as a court interpreter—the commissioning car crash, as it was called, meaning the language service’s contract. The Chairman of the Justice Select Committee concluded that the Ministry’s naivety at the start of the process appeared to have been matched, once the new arrangements came into operation, by its indulgence towards underperformance against the contract.

We will disagree today on how well the Secretary of State and his Department can manage this kind of process, but I am sure that the Minister would agree with the Opposition Front-Bench team at least on the fact that we must not tolerate underperformance if and when these contracts come into force. We cannot allow these problems to happen again in the future. Neither the Ministry’s nor the Government’s records are particularly encouraging on this front. The Justice Select Committee in its review of the budgeting structure of the MOJ reported—astutely, I think—that the Department has a tendency to focus on policy creation rather than implementation. The recent independent review of MOJ contracting reported in December that there were long-standing and significant weaknesses in contract management at the Department. It found that the focus on contracts lessened significantly after the initial procurement and, in some cases, there appeared to be a lack of appetite for continuous improvement. The review concluded that opportunities to mitigate risks and optimise services were being missed.

We have seen first hand the damage done when the Ministry’s attention span fails to keep track of a contract. Our new clause 5 attempts to support the Government to get a bit better on that. Contracts for two major providers and potential failures in probation bidding are currently under investigation by the Serious Fraud Office, after the taxpayer was overcharged by millions for the tagging of offenders who were dead, had been released or, in some cases, had left the country. The prisoner escort contract with Serco has been referred for investigation by the Metropolitan police, and the Ministry’s own review of contracts has led to two more G4S contracts being referred to the SFO. It should not

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be necessary to mention how unhappy Members on both sides of the House would be if a company under investigation for fraud were to be permitted to bid to manage public protection, so I am sure the Minister will want to assure us that that will not be the case. So far, the Government have not done so.

Opposition Members have proposed a number of safeguards in new clause 5, which we believe should be included to improve the quality of the Government’s reforms. If the Government are hellbent on going ahead, new clause 5 would provide at least some kind of oversight and scrutiny for this House. We want them to pilot the proposals and seek parliamentary approval, which we have discussed. We tabled in Committee a number of measures to help improve the quality of contracts. These included ensuring that all providers of this key public service would be subject to freedom of information requests, that contracts would last for a maximum of five years so that a Government were not able to make decisions binding the entire Parliament that follows them, and that taxpayers’ money should be protected by the inclusion of break and clawback clauses in all contracts.

Mr David Burrowes (Enfield, Southgate) (Con): I am listening intently to the hon. Lady’s argument, but how can it have real force if she dismisses the experience of contractual arrangements gained over a significant period of time with organisations such as Turning Point, the St Giles Trust and Catch 22? The argument cannot have force if she dismisses out of hand the quality provision of rehabilitation by these and other organisations. Is she saying that these organisations cannot be trusted with the management of rehabilitation?

Jenny Chapman: I do not have a problem with any of the organisations to which the hon. Gentleman refers. The fact that organisations are third sector does not of itself make them good, responsible and right in every case. If organisations are to take on these contracts, they will do so almost entirely in conjunction with other large companies, and it is reasonable to expect them to be open to scrutiny; my experience suggests that they will be.

Mr Burrowes: I am trying to get to the point of the characteristics of the organisations that are fit for the purposes involved. One cannot label an organisation as acceptable simply because it is third sector if it is inappropriate. Does the hon. Lady recognise the principle that there is a role for private sector involvement in rehabilitation?

Jenny Chapman: Yes, I do. All I am asking for is parity. A public sector provider of these services is subject to a certain level of scrutiny, not least in respect of freedom of information, and when we are spending increasingly vast sums on a small number of private sector providers it is not unreasonable to expect them to be subject to similar oversight. The hon. Gentleman will not be surprised to learn that the Government voted against all these measures in Committee, saying that the current arrangements offer enough protection and assuring us that any necessary safeguards would be included in the contracts.

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I am afraid to tell the Minister, who is well respected in this House, that it is a little difficult simply to accept even his word on such important issues, particularly given that the Government’s record on outsourcing is so awful. We have already discussed the compelling example of the court translation services contract, and another example fresh in our minds is the running of Oakwood prison.

The Parliamentary Under-Secretary of State for Justice (Jeremy Wright): I am grateful to the hon. Lady for giving way and, as ever, for her kind words. I suggest, however, that I am not asking her to take only my word about the safeguards in the contracts. We will publish the contracts in draft so that the House can see for itself.

Jenny Chapman: Perhaps, then, if that is the Minister’s attitude, he will be minded to support our new clause 5. It is reasonably worded and if he reads it carefully he might find that he can support it.

Returning to HMP Oakwood, the Government have somehow managed to build a brand new, state-of-the-art prison that seems to be failing on every imaginable front. A surprise prison inspection last year found inmates reporting that it was easier to get drugs than soap on the wings, while the inspectorate report revealed that the inexperience of staff was visible everywhere, with staff unwilling to challenge bad behaviour and many being

“passive almost to the point of collusion”.

As the report continued, indicators of levels of violence were high, there were not enough activity places and the control and supply of medication was “chaotic”. The chief inspector of prisons called the state of the prison “unquestionably concerning”. The Secretary of State was disappointingly somewhat less firm in his criticism, largely dismissing these as “teething problems”. A couple of months later, inmates managed to stage not one, but two rooftop protests. As late as last week, six months after the inspectorate visited the prison, West Staffordshire police were notified of an incident lasting through the night, apparently involving an entire wing being barricaded by inmates.

Sir Edward Garnier (Harborough) (Con): I am sure it is entirely my fault for being obtuse, but could the hon. Lady try to weave her remarks about the prison into her arguments in support of the new clause because I do not see a connection?

Jenny Chapman: I will attempt to assist the hon. and learned Gentleman. The point is that Oakwood prison is run by one of the would-be providers of probation services.

Jeremy Wright: It is not.

Jenny Chapman: Perhaps the Minister knows more than I do—I hope he does—but nothing we have read suggests that G4S will not take part in any way in the provision of these services. A statement made on 19 December informed us that it would not be a lead bidder, but also indicated that it might be part of a consortium.

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2 pm

Jeremy Wright: Perhaps I can help. The list of prime bidders has now been published, and Members may well find it worth their while to have a look at it. It is true that neither G4S nor Serco appears on the list, but a number of others organisations do, including 10 probation mutuals.

Jenny Chapman: But those are lead bidders, and I understand that none of the contracts will be taken on by one organisation alone. There is nothing to prevent G4S and others from being involved in the provision of probation services when the contracts are awarded. The other reason this information is relevant to probation is that it reveals that the quality of the supervision and enforcement of contracts by the Ministry of Justice is not quite what we would like it to be.

John McDonnell (Hayes and Harlington) (Lab): The statement that was made to the House a couple of weeks ago was explicit about the possibility that G4S and Serco would form parts of consortia. I think that the Minister should make the position absolutely clear.

Jenny Chapman: That is certainly my understanding, and nothing that the Minister has said so far contradicts it. Unless we hear something more definitive from G4S, the Ministry of Justice or the Minister today, I think that that must remain our assumption.

The MOJ tends to take its eye off the ball as soon as a contract has been signed, so new clause 5 helpfully provides for a longer-term regular check on the performance of probation service providers. Its scope is really quite limited: it merely requires the Secretary of State to report to both Houses of Parliament on the performance of all providers that are contracted to manage offenders. In particular, the report must include an assessment of the transparency of each provider, and must specify what information it is making available to the public and how reliably it is responding to freedom of information requests submitted to the MOJ. It must also update both Houses on what measures were included in the contracts to ensure that poor performance could be penalised, and on whether any have been invoked.

Sir Alan Beith (Berwick-upon-Tweed) (LD): In the past, the Justice Committee has suggested not that private companies should be subject to freedom of information requirements, which would be contrary to any working commercial system, but that when writing contracts, public bodies should ensure that they have access—and thus create freedom of information access—to any information that would have been public if the work was still being done in the public sector.

Jenny Chapman: We would probably go a little further, but I accept what the right hon. Gentleman says. The new clause merely requires companies to respond in a way that helps the MOJ to meet its own freedom of information requirements.

Opposition Members are becoming increasingly concerned about the blind spot that seems to be developing in relation to outsourced contracts. Given the rate at which the Secretary of State is issuing invitations to the

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likes of Eddie Stobart to take over justice contracts, more and more information is being put out of the taxpayer’s reach.

Responding to amendments tabled in Committee, the Government argued that the status quo, whereby a contractor is considered to hold information on behalf of a public body, was working well enough. We disagree, and the Minister knows that, in practice, there is information that private contracts choose to keep to themselves while public providers are rightly held to account. That is not a level playing field, and it does not give us, our constituents or, indeed, the press enough power to scrutinise those who are wielding large public budgets and providing front-line public services.

Meg Hillier: The heads of some of the big private sector providers recently appeared before the Public Accounts Committee. They expressed a wish for more openness, and some of them told us that they were being constrained in that regard by their contracts with the Government rather than by their own desires.

Jenny Chapman: I was not aware of that, but I am very pleased that some of the big providers are taking that attitude.

We have pledged to expand the scope of freedom of information requirements if we win the next election. We should have liked the Government to make a start with probation providers, but, unfortunately, it seems that so far they are unpersuaded. We hope that, as a compromise, they will agree to monitor the extent to which providers respond to their duty to release information to assist the Ministry of Justice with its FOI duties. That will allow us to establish whether the current provisions are indeed sufficient, or whether more needs to be done to make companies accountable to the public.

Finally, new clause 5 requires an update on what measures were included in contracts to ensure that poor performance can be dealt with properly. We are very concerned about that. The Government refused to assure us that break clauses, which allow the taxpayer to walk away if a provider consistently fails to perform to national standards, would be included in all contracts. Instead, the Minister has given his word that underperformance will not be tolerated, and that contracts will include a number of safeguards to protect the quality of the service and the cost to the taxpayer. The new clause would simply allow Members to hold the Minister to that welcome assurance.

The Government’s proposed reforms are ill thought through, risky and, in our view, reckless. We believe that the Government should slow down the process and take the time to get it right. In fact, they may well be right, and if they organised pilots and obtained some evidence, we would be the first to support them. However, if they press ahead with their gamble with public safety, the bare minimum that our constituents must be assured of is that providers will be expected to perform exceptionally well.

New clauses 1, 4 and 5 are intended to build safeguards into the process. They would allow plans to be properly scrutinised, tested, and made fit for purpose. The Secretary of State is taking a gamble with public safety. He is rolling out an untested model in the hands of unqualified providers, and he expects us to be reassured by his inner belief. It is a great pity that the Government are not

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willing to proceed slowly, to do things properly, and to work with the professionals, and even the Opposition, to arrive at a result on which we could possibly all agree.

Mr Burrowes: I am, in some ways, trying to help the hon. Lady’s case. She has referred to “unqualified providers”. I know that she does not want to pick and choose between different sectors, but is she saying that those 10 probation mutuals are unqualified?

Jenny Chapman: Absolutely not. I welcome the involvement of probation mutuals. I think that it would have been a great deal easier, less time-consuming, less expensive and less traumatic if some of those organisations had been allowed simply to get on with it without having to form themselves into new organisations. Had the Government’s initial proposal been for all trusts to be able to re-form as mutuals, using the skills, experience, knowledge and relationships that they already have, we would not have needed to engage in this debate today.

We will press new clauses 1, 4 and 5 to a vote. If the Government are so confident about what they are doing, why should they not submit their plans to proper parliamentary scrutiny?

Sir Edward Garnier: I will be brief because we enjoyed the speech of the hon. Member for Darlington (Jenny Chapman) for some little while. Essentially the point of difference between her and me, certainly in relation to new clause 1 and the new clauses that mirror it, is that she would like to delay the progress of the implementation of the Government’s proposals and I would like them to be implemented as soon as possible.

There has been a considerable amount of to-ing and fro-ing both across the Dispatch Box and between Members of Parliament and their constituents who work within what I loosely term the probation services, by which I mean not specifically the Government agency, but those who carry out rehabilitation services. I have recently met members of staff of the Leicestershire probation service and when I was a shadow Justice Minister I made a point of visiting a huge number of probation offices, meeting both probation staff and those who work not in the Government agencies but in the charitable sector, such as the organisations my hon. Friend the Member for Enfield, Southgate (Mr Burrowes) mentioned in his intervention. It struck me that, by and large, there was a big hole in the way we look after short-term prisoners and repeat offenders. They were released from prison unsupervised, and the sooner we start supervising these under-12-month prisoners the better for them and for their victims and society as a whole.

I can appreciate the political arguments the hon. Member for Darlington advanced. I appreciate that from her pre-parliamentary background she has an affiliation with the GMB and therefore has an interest in—

Jenny Chapman indicated dissent.

Sir Edward Garnier: Well, I hope I have read the hon. Lady’s entry correctly. Perhaps she had better come and see me later and we can get it corrected. In any case, her party has a closer affiliation to the trade union movement than I personally have and my party has. I can therefore understand why she is advancing these arguments requesting

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pilots and other forms of delay mechanisms, because she does not want these measures to come to pass. I think that argument has been had and the situation now needs to be resolved, however, and I therefore urge her not to press her amendment to a Division. I am far more interested in the results we can achieve for our constituents and those offenders who desperately need the supervision they are currently not getting than I am in the political arguments.

Sarah Champion (Rotherham) (Lab): Might not another reason for our pressing these amendments be accountability and wanting to see evidence?

Sir Edward Garnier: No doubt that might be one of the collateral reasons, but that does not undermine the point I am making, which is that we need to help these under 12-monthers as soon as possible. If we are to have further statutory brakes on the introduction of supervision, either through the national probation service or through the non-Government organisations—

Jenny Chapman rose

Sir Edward Garnier: I seem to have provoked all sorts of charming people. I give way.

2.15 pm

Jenny Chapman: I really did not want to intervene and was trying very hard not to do so, but I just want the hon. and learned Gentleman to understand that we are not opposed in any way whatever to the introduction of supervision for prisoners who serve short sentences, but we believe there are other ways in which that could have been implemented without going through this ridiculous process that the Government are hell-bent on pursuing.

Sir Edward Garnier: Is it St Francis I am reminded of: “Oh Lord make me pure, but not yet”?

Jeremy Wright: St Augustine.

Sir Edward Garnier: St Augustine. I am so glad for that correction. The Minister is multi-talented.

I do not think I need to pursue my argument. I have made the point I want to make, and I understand the points the hon. Member for Darlington has made and I disagree with them. I suggest we get on and permit the arrangements to be advanced as soon as possible. I say that not out of party political animus; I say it out of a desire to see something done, having spent five years in opposition between 2005 and just short of 2010 taking an intense interest in the way in which we ran our prison system, our criminal justice system and our rehabilitation system. I also say it as someone who has sat for 12 or so years as a Crown court recorder and who had to deal quite regularly with the results of failure, and I think the time has come to stop that.

Sarah Champion: May I begin by apologising as I will not be able to be present for the final winding-up speeches? I mean no disrespect, but I have an outstanding parliamentary engagement I just cannot get rid of. [Interruption.] Sorry; an engagement I cannot be excused from.

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Every time I have been involved in proceedings on this Bill it is as though I have stepped into the twilight zone. I was on the Bill Committee and in the Opposition debate on this issue, and from what I am hearing today, the same thing keeps on happening and I do not understand why.

I support new clause 5 and the other new clauses to which I have added my name. We are asking for a full debate in Parliament about a major overhaul of the judicial system. The safeguard of new clause 1 was previously inserted in the Bill in the other place but was removed by the Government in Committee. I do not understand the logic for doing that.

The nub of this Bill—which is not actually included in its provisions—is that 70% of the probation service will be privatised. I do not understand the motivation for doing that. I hear the arguments and I hear a lot of myths about what Labour is saying and is not saying, but the two do not stack up and I am just not hearing the evidence for making the change.

Gareth Johnson: Does the hon. Lady not accept that a tendering-out process is vital if we are to assist short-term prisoners and that that cannot be achieved within existing budgets?

Sarah Champion: I hear that point and I have heard it made for months now, but I do not agree that that is the only way forward and I am yet to hear the evidence that tells me that it is the best way forward. I would like to develop that point.

As we are not being presented with evidence, the only conclusion I can reach is that the policy is driven by ideology rather than facts. This is not a subject we should be playing with. We need to have evidence and proof. Even a pilot would give us time—that breathing space and that evidence. That is why I support new clause 4. The proposal is being rushed through. The system is over 100 years old and it has served us well in that time; we have been debating the proposal for only the past six months.

I would like to set the record straight once again on Labour’s position. We are not in any way opposed to supporting offenders who have had sentences of under 12 months. We actually tried to bring that support through but were unable to do so. We are very supportive of that, but we question the one way that has been presented to us in which it should be done.

Jeremy Wright: The hon. Lady is right that the previous Labour Government set out exactly such an aspiration and she is right, too, that they came to the conclusion that they could not achieve it, but does she not accept that they came to that conclusion because they could not find a way of affording it? That is precisely why we have put forward these proposals—it is the only way we can see of affording that extra cost. So far, I have heard nothing to suggest that there is an alternative.

Sarah Champion: I support what the Minister says, but there are two points to make. First, we have not been presented with the costs, so we do not know whether it can be afforded. Secondly, I do not agree with the premise that that is the only way to go forward.

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Although I would not choose it, we are not fundamentally opposed to commercial companies tendering for and running Government contracts, as long as they are proved to be the best provider. We are also not at any level against voluntary organisations being involved. Indeed, a number of such organisations are providing specialist services in Rotherham, and we want that to continue. I am sure that that is happening across the country. This is not an either/or situation.

I want to use this debate to challenge some of the Government’s reasons for this massive overhaul of our judicial system, in the hope that even just one person in the Chamber will listen to some of the evidence that we are putting forward and question the assumptions that are being made. The underlying assumption is that the existing system is not fit for purpose, yet the National Offender Management Service published a report in July 2012 that demonstrated that the quality of the probation service was either good or exceptional in every single probation trust. After the probation service as a whole won an award for excellence in 2011, the hon. Member for Reigate (Mr Blunt), who was Minister for prisons and probation at the time, said—

Mr Burrowes: The hon. Lady has attended the debates on this subject. She was here for the Opposition day debate and she served on the Bill Committee. Plainly, the focus of the Bill is the provision of rehabilitation for short-term offenders. Will she provide statistics on who is looking after those short-term offenders and on their reoffending rates? Is it really acceptable to defend the status quo?

Sarah Champion: I agree that it is unacceptable that those people are not getting support now. I would like to go further and start their rehabilitation in prison. I would like there to be a complete system, so that when people come out they will be able to engage much better in society and will not reoffend.

Lorely Burt: Will the hon. Lady give way?

Sarah Champion: I should just like to tell the House what the hon. Member for Reigate said. After the probation service as a whole won an award for excellence in 2011, he stated:

“This prestigious award recognises the professionalism of probation staff and the excellence of their work. This very public recognition of not just what they do but, perhaps more importantly, how well they do it, will be a source of pride for probation staff.”

The existing probation trusts are doing an excellent job, and that is being recognised. They are not broken.

Lorely Burt: I do not think that anyone in the House would dispute the fact that the probation service does an excellent job. However, during the last 10 years of the previous Government, the cost of running the service rose by 70%. The hon. Lady says that she does not disagree with the use of private providers or with the aims of the Bill. Can she explain how on earth it would be possible to realise those aims without taking these steps?

Sarah Champion: Unfortunately, I cannot explain that, because the plans have not been put before us. I am therefore unable to scrutinise them or to change them to the degree that I would like. I am supporting new

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clause 1 because I would like the House to be able to debate those matters, but we are not being given the opportunity to do so.

Another assumption that is being presented to us is that probation trusts are failing to reduce reoffending rates, yet reoffending rates are falling. The latest statistics published by the Ministry of Justice show that the probation service reduced reoffending by a further 5% below the target figure. This continues the downward trend in reoffending rates witnessed over recent years, and reoffending by all adult offenders in the community subject to probation supervision is now at its lowest since 2007-08. The probation service has achieved that while making the considerable budgetary savings asked of it. In South Yorkshire, the figures are even better, at 12.77% lower than the target figure.

Reoffending rates are important, but they are not the only criterion for success in this area. The probation service can also boast that victim feedback has been positive in 98% of cases; that targets for completions on domestic violence interventions, and for court report timeliness, have been met and exceeded; and that completion targets were also met or exceeded on the vast majority of probation programmes. The probation trusts are doing a superb job, and they should be allowed to continue to do so.

Another assumption that keeps being mentioned in the debate is that the only way in which supervision for people serving a sentence of under 12 months can be afforded is through privatisation. However, the proposals will necessitate the wholesale reorganisation of the probation service and a lengthy and complex national tendering and contracting process, all of which will require significant investment before we even get to the meat of doing the job. There is huge concern over the lack of information on the cost of the proposals. We have asked for that information, but it has not been presented. Despite the publication of several impact assessments, the Ministry of Justice has yet to set out the cost of the reforms and the way in which they will be funded. This is a fundamental point. If we are expected to take this leap in the dark, at least we should be chucked a lifeboat so that we can get into it.

The current budget for probation is approximately £800 million a year, suggesting a 10-year budget of £8 billion. The House of Commons Library has broadly estimated that the 10-year value of outsourced probation would be between £5 billion and £20 billion. That is in addition to the budget for the remaining public sector probation service. That suggests that a significant increase in costs is being predicted, contrary to Ministry of Justice claims that the reforms are a cost-saving initiative. In addition, there would be the unknown percentage resulting from performance-related pay.

Now it starts to get surreal—not that it was not already. The Government say that the probation service cannot tender because of the performance-related pay aspect, so why do they not just drop that element? The probation trusts have been saying all along that they would like the opportunity to support people serving short-term sentences. They are clearly the best trained and most skilled specialist people to do that work, but they are not even being allowed to tender for it. I find it incredibly challenging that the main stumbling block to retaining the status quo in that area is that the Government will not drop the performance-related pay element.

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I support new clauses 5 and 11, but other people want to speak so I shall not say any more about the companies that are tendering for the work. Nor will I go into the whole data protection issue that will result from state, private and voluntary organisations sharing information. My hon. Friend the Member for Darlington (Jenny Chapman) has already mentioned the logistics of reorganisation and the risks incurred during a transition period. Those risks are enormous. We are not talking about people not getting paid for a week. We are talking about people being out in the community without the necessary supervision, and the potential for the data to collapse around them so that we would not even know where they were.

In conclusion, new clause 1 would prevent the Government from being able to sell off or restructure the probation service unless their proposals had first been laid before, and approved by, both Houses of Parliament. The Government have not given Parliament any opportunity to scrutinise their plans to privatise probation, claiming instead that they can use existing legislation to push the plans through. The only time we have debated this topic is during Opposition day debates. That cannot be democratic. The way in which this has been handled has shaken me to the core.

Jeremy Wright: Of course democratic accountability is important. The hon. Lady has mentioned the opportunities the House has had to debate these matters. She has mentioned the Opposition day debate, in which there was a vote and the House voted against her point of view. She has also mentioned the Second Reading debate, after which the House voted against her point of view. She was also in the Committee, where the Committee voted against her point of view. How much more democracy does she need?

Sarah Champion: Again, it would be nice to have the evidence; instead, we are debating in the dark. I find it shocking that we had to raise the issue in an Opposition day debate, rather than the Government presenting their findings to us.

For me, it is right and proper that this House should debate the privatisation of 70% of probation services; the fragmentation of the resulting services; the abolition of local probation trusts; the commissioning of services direct from Westminster; and the imposition of an untried, untested payment-by-results model. Instead, the Government are pushing ahead with their half-baked plans for probation privatisation by misusing existing legislation and avoiding parliamentary scrutiny. I can only assume that that decision is driven by political ideology, but this proposal will put the public at risk.

The chairs of the probation trusts of Derbyshire, Leicestershire and Warwickshire have written to the Minister to warn him of the dire consequences of rushing this reform through. Those experts say that

“performance is bound to be damaged and that public protection failures will inevitably increase”.

They go on to say that the fragmentation proposed by this Government would lead to

“more systemic risks and more preventable serious attacks and deaths”

and that the current timetable was

“unrealistic and unreasonable...with serious implications for service delivery and therefore increases the risk to public”.

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I urge the Minister to listen to the people who know and understand the service best, and to support our proposal in new clause 1.

John Pugh: I rise to speak in support of new clause 4. The hon. Member for Rotherham (Sarah Champion) mentioned ideology. It might surprise her to learn that I am a great fan of ideology; I think that people should have clear political beliefs. There is at least one clear ideology on public services, which states that government services are best delivered not by a Government agency but by private bidders trying to satisfy the Government. There is a general view that Government agencies are necessarily incompetent, inflexible or naturally the prisoner of Government employees and unions, and that outsourcing is always the best and first option.

2.30 pm

A known technique is used, as we have seen in connection with this Bill, which is to discredit the existing service; propose restructuring and reform; argue for appreciable haste; reduce the Government’s role, where possible, to that of a commissioner rather than a provider; and then, if necessary, to talk up what has been referred to as “bid candy”. That involves talking about mutuals or charities, rather than private providers, which will be the big players in most scenarios. In addition, savings are promised, as are a reduction in bureaucracy and greater efficiency through competition. The ideology is always clear, although the political manoeuvring is sometimes less than transparent. Critics legitimately claim, as they have done in this debate, that a loss of institutional memory occurs and a less integrated service results, just as the demoralisation and de-professionalisation of existing staff results too. There are other attendant risks, such as the risk of putting profit before service or cost before quality. An ideological view would, however, assure us that we can have all the upside gains from this approach and none of the downside risks if we are clever enough, plan right, commission wisely and so on. I am sure that is what the Government will say.

That is where the debate goes, and it is where we are now, but for one thing: ideology, or what we think should happen, is always trumped by evidence—by what actually happens. Regardless of what we think ought to work, we have to look at what actually does work. So far, there is no evidence that the suggested demarcation and division of work load projected by this legislation can work; that clients can be permanently labelled either “high risk” or “low risk”, or move effortlessly from one category to the other; that the savings—this does worry me—can be guaranteed; that there are enough good bidders in all markets to provide a good and equitable service, which should worry the Minister; and that it is necessarily a good thing to have mandatory 12 months’ supervision of all people in all circumstances, with that being the most efficient and effective way of using the probation service, which it might be, but the evidence is not there so far to support that. There is no evidence to suggest that the current system is not working as well as can reasonably be expected or that payment by results is likely to work better.

On the other hand, there is plenty of evidence that staff are demoralised and unconvinced. We do not need to be persuaded of that; it is the case. Plenty of evidence

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from previous restructurings in the NHS shows that wholesale restructuring absorbs time and resources, and reduces efficiency, and that there are still lingering communications systems issues to address—we have mentioned the IT system, too. Enough evidence is available to make an ideologue—though not perhaps a Minister—think that a smart move in this case would be to have a pilot, because we are talking about a precious asset, the probation service of this country, and we need to handle it carefully. One way of doing that is to pilot things first and then, when we are totally satisfied that everything is working, to put it in place nationally, if need be.

Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC): I wish to speak briefly to new clauses 1 and 4, both of which I have co-signed with Her Majesty’s official Opposition. The Government do not want new clause 1 in the Bill because they are concerned that, in due course, they will not win the vote in either House of Parliament because, frankly, what they are proposing does not add up to much. At the end of last year, the official Opposition held a debate on the Government’s plans to restructure probation work and, until that point, the Justice Secretary had refused to answer for his plans on the Floor of the House. During that debate, many of us outlined why we thought it baffling that the Government should want to target the probation service, a service that is so high performing and where the numbers speak for themselves.

The Ministry of Justice’s own figures show that none of the 35 probation trusts is currently showing cause for “serious concern” and none “require development”; and that 31 of the trusts are “showing good performance” and four are “performing exceptionally”. In 2011-12, victim feedback was positive in 98% of cases; 80% of orders or licences were completed successfully; and 49% of offenders were in employment at the end of their orders and 89% were in accommodation. Reoffending rates were better than predicted in both England and Wales, and the probation service met all its targets in 2012. The service achieved a successful completion rate of 81% for participants of sex offender treatment programmes and exceeded its completion targets on domestic violence interventions. In October 2011, the probation service became the only public sector organisation to be awarded the British Quality Foundation award. The board said that the service was

“on the right path to achieving and sustaining excellence and essentially to being the best providers of these essential services.”

The reoffending rate among those sentenced to more than 12 months but less than four years is 36.2%, while among those serving between four and 10 years it is 30.7%. As we know, the reoffending rate for individuals sentenced to less than 12 months—the cohort that currently, by and large, receives no supervision, despite some probation trusts asking for the authority to take control of them—stands much higher, at 58.5%. That takes us to the crux of the argument. Everybody in this Chamber agrees that something has to be done, but we disagree about how it should be done, because what the Government have proposed is untried, untested and downright dangerous.

Mrs Madeleine Moon (Bridgend) (Lab): I endorse everything the right hon. Gentleman is saying about the excellent service that the current probation service provides. Is not part of the problem that the Government are

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failing to address a major problem, which is the reoffending by people with mental health conditions? If we tackled mental health and mental health services rather than imprisoned people, we could cut some of that reoffending more dramatically than we could by privatising the service.

Mr Llwyd: The hon. Lady, who has taken an interest in this subject for many years, as have I, is absolutely correct. I would go a bit further and say that if we dealt with mental health problems and drug addiction, we could empty about 40% of prisoners from prisons tomorrow without any danger—had we got the safety net out in the community.

The Government are taking a drastic step without having any proven record of any possible success. Unlike with some services that are privatised, there is an inherent danger to the public in all this. I agree fully with the Opposition when they say that we want the thing tried and tested. That is not a political scam to try to stop it. I would like it stopped, but let us also be honest and say that we are where we are and we should at least see whether these plans will work. That surely is a common-sense thing to do, but time and time again, in the Public Bill Committee and in all the other debates, we have been unable to persuade the Government to pause and to think carefully about why they initiated their two pilots previously. Why did they do that if they were that unconcerned and the pilots were bound to succeed?

The Secretary of State, who drifted in and out here today, in typical fashion, has said in some debates, “You do things sometimes because they are right.” I am sure that is right, but it is a bit risky to have a messianic view of life and say, “Because they are new and are being tried now, they have got to be right. What’s right is right.” That is absolute balderdash and I am afraid he will eat those words in the next two or three years. I hope not, but there will be a danger in this system.

As we are all aware, what will be left of the public sector probation service will work with victims, hostels and offenders who pose a high risk of harm. The remaining 70% of cases—the low-risk and medium-risk offenders—will be managed by the private sector under the model that we are talking about. The point has already been made that such risks vary—they can vary from day to day or from week to week. I do not know how the system will be managed, but co-location has been mentioned. I am not sure whether that will work, but, again, it is a matter of crossing one’s fingers and hoping for the best.

There are serious concerns about the payment-by-results model, most of which I will briefly outline with regard to another amendment that would compel the Government to pilot the plans before implementing them across the board. To some relief, we find that G4S and Serco will not be coming in on this, although they do know a lot about criminality.

Under the proposals, private companies will be responsible for the majority of cases involving domestic violence, sexual offences, burglary, robbery, violence against the person and gang-related crimes. That is highly sensitive work, which clearly requires trained professionals with experience of how to deal with victims and perpetrators of such complex crimes. It is highly unlikely that the private sector will prioritise holistic initiatives such as work with victims of crime. I am afraid that it will be

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driven by profit rather than levels of care. Many individuals who come into contact with the probation service have one or more mental health problems. They may have suffered abuse, have substance misuse issues, literacy problems and poor educational attainment. Such people need to be signposted to the proper avenues for care and support. They are highly damaged individuals and require special attention.

The proposals will compromise public protection and provide a perverse incentive for private companies not to put resources into decreasing offending behaviour. There are also numerous possibilities for conflicts of interest, the tackling of which is the aim of another amendment that I have co-signed.

The Social Market Foundation has argued that payment by results incentivises an increase in offending. To understand that, it is important to note that the Government have decided that a private company will neither be penalised nor rewarded for an increase or decrease in offending of 3% either way. Ostensibly, that is to take account of the fact that external factors can have an impact on offending rates. In practice, however, it would mean that private companies would have to achieve a 4% decrease in offending before being rewarded. They will simply not invest that amount of money when there is no guarantee of a return on their investment. Unfortunately, it is far more likely that the companies will make a profit by delivering court orders in the cheapest way possible by opening call centres. Understandably, the National Association of Probation Officers—the experts on this—is worried, and legitimately I would say.

The hon. and learned Member for Harborough (Sir Edward Garnier) referred to the GMB union. It is a question not of union versus anybody else but of what works and what does not work. NAPO has had experience over many years, and I have already referred to its successes.

Sir Edward Garnier rose

Mr Llwyd: Yes, of course I shall give way, but let me make this point. Time and again, I have heard NAPO say, “If it is inevitable that we have to go down this path, let us see whether it works.” Let us pilot this system. Let it come before Parliament before the changes are effected, because, although NAPO refers to its jobs, its main concern is the safety of the public it serves.

Sir Edward Garnier: The right hon. Gentleman and I have many mutual friends who are members of NAPO. Harry Fletcher is a former assistant general-secretary whom we both know and respect. My point was quietly to tease the hon. Member for Darlington (Jenny Chapman) who happened to say in a parliamentary reference book that she was a member of the GMB, but she tells me that that is not the case. I was not making a substantive point but—

Jenny Chapman rose

Sir Edward Garnier: I do not think that we need to divert into other areas. The short point I am making is that of course there are political differences between my party and Labour over the influence of trade unions.

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Essentially what I want to get across is that this needs to be done because the victims and the prisoners in question need to be assisted.

2.45 pm

Mr Llwyd: I agree entirely with the hon. and learned Gentleman on that. We all agree that we need to deal with these prisoners. If the model works, that is fine, but if it does not, it will be a disaster. Pausing a bit would have been a good idea. There were two pilots that were cancelled halfway through. If they had carried on, we would have had some evidence to consider. Even people like me who need some persuasion about the system would see that it works and that there is no danger to the public. Instead, we rush headlong into the dark.

Mr Jim Cunningham (Coventry South) (Lab): Does my right hon. Friend agree that there has been too much social experimentation between the private sector and some public sector organisations, such as the probation service? In industry, for example, if a company were bringing in an innovation, it would have a pilot scheme either to silence the doubters or to answer them. I agree that we should have a pilot scheme on this. It is far too dangerous to deal with it in the abstract.

Mr Llwyd: I agree entirely with the hon. Gentleman. That feeling is held widely across the House, and not just on these Benches. The hon. Member for Southport (John Pugh) referred to ideology. The Bill is a victory for ideology over common sense. That by itself is ridiculous enough, but the inherent dangers of it make it even more insidious.

To avoid treading over old ground, I will not talk about the risk register. None the less, it still alarms me that the risks were seen as so high at the commencement of this exercise, and I have no reason to believe that they have changed for the better since.

Briefly, let me refer to new clause 4. The impetus behind it is to ensure that we do not rush headlong into implementing these reforms without first having a pilot, which would be independently evaluated and reported on to both Houses of Parliament. I notice that the esteemed Chair of the Justice Committee, the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith), is in his place, so I must be careful about what I say. Over the past few weeks, we have taken evidence from many sectors involved in probation and rehabilitation. A considerable amount of it was from people who had been involved in previous Government privatisations. Surprisingly, they were saying, “Don’t do it. Don’t rush in. It is not proven. It may not be cost-effective and it could cause huge problems.” Such people are surely aware of the risks involved and they came before the Committee to give their opinion. It is not simply a matter of one political divide against the other. Some of those people presented as being more in sympathy with the Government than with anybody else, but they said not to do it because it is unproven and could be dangerous.

The probation service has prior experience of the damage that can result from privatisation. Building management, for example, has been contracted out to the private sector, which has resulted in a great deal of waste and inefficiency. I have heard of an engineer

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being sent from Liverpool to Cardiff to fit a carpet tile even though, ironically, there is a carpet shop opposite the Cardiff probation office—you could not make it up.

In 2007, the running of bail beds was outsourced to a company called ClearSprings, which had no experience in the criminal justice sector. Numerous complaints were made about antisocial behaviour and drunkenness and the contract had to be removed. We know about Serco and G4S, so I will not go there again. Clearly, there is a significant prospect of disorder and possible dangers if the plans do not prove to be sensible. As for the Government’s risk assessment, time is short so I will not go there.

The restructuring will mean that there will have to be an entirely new operating model with 21 new government companies; that staff will have to be allocated to new roles in community rehabilitation companies and the national probation service; that no fewer than 18,000 staff members will be transferred to new employers; and that up to 250,000 offender cases will be reallocated. It would be foolhardy indeed to proceed without some guarantee of success.

It would not be unheard of for new measures being introduced to the justice system to be piloted nationally. Recently, pilots on payment by results have been held at HMP Peterborough and Doncaster, albeit voluntarily, while in recent years Governments have held pilots on satellite tracking, the domestic violence 28-day prevention order and drug reduction schemes. Piloting is not unheard of.

This is not a question of reputational risk for the MOJ. We are all concerned about the safety of the public more than anything else. A further risk register produced by the probation employers last November of last year warned of a high risk of

“a failure of the programme to be delivered either in scope or within the timescale set by ministers”.

At this eleventh hour, I plead with the Minister and his colleagues to give the scheme a chance and to give us all a chance to evaluate it. We might come back one day saying, “Yes, it was right,” or, “No, it was not.” If the answer is no, many people will suffer. Those members of the public are the people whom it is our duty to protect.

John McDonnell: I apologise to the House for the fact that I will leave after my brief remarks, because at 3 o’clock I have a meeting, which I have been seeking for a couple of months, with the Secretary of State for Education, about a school in my constituency. I hope that I will be back in time for the Minister’s response.

Let me pick up on the point made by the hon. and learned Member for Harborough (Sir Edward Garnier). We have all been pressing for some time, under the previous Government and this Government, for the supervision of offenders with sentences of less than 12 months, but we all expected that to proceed normally—that is, with a proposal being made with a budgetary paper attached that the existing system would be challenged to meet—so that we could plan the development of the probation service. If there were to be additional funds, some of us would have lobbied the Treasury while others would have argued that the service should swallow its own smoke and keep the budget within its existing budgets. That was what we expected.

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I think that clause 1 was inserted in the Bill in the other place because none of us expected the use of the previous legislation to introduce proposals for the wholesale privatisation of the probation service—that is what this means for 70% of the service going forward. When that legislation was going through, I opposed it and I warned those on my Front Bench that it could be abused in such a way. I was assured that the legislation, which was supported on both sides of the House if I remember rightly, would ensure that the third sector, voluntary sector organisations and others could participate in rehabilitation, and that it would introduce flexibility to the system. A number of organisations lobbied for that, particularly in the drugs rehabilitation field. That is why I think that this is an abuse of process. It is an abuse of the previous legislation, which was never intended to be used in this way, and I think that is why the other place inserted the clause.

I have been angry and have shouted about the subject in this House, and it is not good for my health. This is, however, a leap in the dark, and I am fearful for my constituents. As with other privatisations, there is a financial risk, but that is nothing in comparison with the risk to life and limb. As a result of this leap in the dark, there could be safety problems that will bear down on Ministers in the future.

I warn the House that if we allow this Bill to go through and any of our constituents suffer and are harmed in some way as a result of an offender not being properly supervised, we will, quite properly, be held responsible. The hon. Member for Southport (John Pugh), my hon. Friend the Member for Rotherham (Sarah Champion) and my right hon. Friend the Member for Dwyfor Meirionnydd (Mr Llwyd) have made exactly this point: why not ensure that the alternatives proposed by the Government are properly tested? Setting up pilots and then ending them without taking any account of them seems extraordinary and completely illogical.

In previous debates, we seized on the risk register because advisers to the Government were saying that there were risks. As my right hon. Friend the Member for Dwyfor Meirionnydd has said, there is an 80% risk of failure in some instances. The Secretary of State argued that the risk registers are only there at the beginning to point out a range of issues that will then be addressed, so we asked, “Why not publish the risk register and make it completely public, and why not publish those mechanisms you have put in place to address the specific risks? At least then we could be assured that they have been properly addressed and, perhaps, overcome.” As my right hon. Friend has said, we are walking into the dark and putting our constituents at risk as a result.

As other Members have explained, the experience of privatisation in the justice service has given us sufficient warnings that we need to tread very carefully. I do not want to go over those again, but many of us have had experience of the justice system over the years and I have never seen the system so vulnerable as a result of private interventions. There are riots almost monthly, and concerns expressed within our prison system. The introduction of the Serious Fraud Office into investigations of companies that provide services within the justice system is ironic, to say the least.

I support the amendments tabled by my hon. Friends on the Front Bench, which are supported by the chair of the justice unions parliamentary group and by the group

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overall. We have also tabled a number of other proposals that are somewhat bureaucratic but, I think, important: new clauses 10, 9, 11 and 13, which are all in my name. They are simple suggestions. First, if the Government are going down this path let us have full and open transparency. The new clauses suggest that the contracts should be fully published. The Minister has said that the draft contracts should be published, but I think that it is important that the full contract should be published so that we can all see it, in particular the elements of the contract that include the requirements and expectations of the providers’ performance. It is important that in future the National Audit Office can investigate and assess the effectiveness, economy and efficiency of the implementation of the contracts.

One change that I have suggested is just common sense: no company that has been investigated for fraud should be able to bid for the contract. I do not wish to see sleight of hand, with the suggestion that such companies will not be the primary providers but can be part of a consortium. They will play a key role within those consortia because of the resources they have.

New clause 9 suggests that companies that are the prime contractors for the Work programme in an area should not be able to bid, and I say that because there is a potential conflict of interest. If one company is implementing the Work programme at the same time as the new probation system for those with sentences of less than 12 months and there is a sanction, the Work programme will lose out. That introduces a conflict of interest within the system. What worries me is that a number of companies will bid for a range of contracts in an area, across the piece, with the result that mini-monopolies will be built up in particular geographical areas.

My new clauses are simply administrative amendments. New clause 13 says that we need an annual report to Parliament and I know that that is a standard amendment that we table for a range of legislation, but in this instance it is vital. I want to know from an annual report from the Government exactly how the contracts are being performed against, how safe my constituents are, how safe the offenders are and how successful the implementation of the new system is.

I do not want to go over everything I have said before. I am extremely worried and I will hold Ministers to account if any of my constituents are injured as a result of the Bill. I have said that twice before. In fact, the late Paul Goggins advised me that I was threatening Ministers and I said, “Yes, I am actually, because they are threatening my constituents with this legislation.” I hope that today we will be able to defeat it or at least pass some amendments that will stabilise the system and enable us to gain some accountability. If not, I hope that the other place will say no and introduce an element of common sense to the debate.

3 pm

Meg Hillier: I rise to support new clauses 1 and 4. I will not repeat the excellent arguments that my hon. Friends have made, but I am concerned about the impact that this big and sudden change to the probation service will have in my community and on offender rehabilitation, both of which are central to the aims of the Bill, which is why elements of it enjoy cross-party support.

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I am not opposed to having specialist providers in the probation service. For example, there is a high incidence of mental health problems in my constituency, and in Hackney as a whole, and many of the people affected, if they get caught up in the criminal justice system, would benefit from more specialised services, so I am not opposed to the private sector or voluntary bodies coming in to provide certain aspects of probation.

However, the scale of this outsourcing, particularly when it is being done in such a hurry, poses a real risk. I believe that it will reduce standards. People will be taken on by large companies that have no track record in probation, and will be paid at much lower levels, as probation assistants, rather than full-blown and experienced probation officers. I call it probation-lite. Those people will be making very important decisions. They will decide, for instance, whether someone is a high-risk offender who needs to be transferred to a probation officer. There is a risk there.

Jeremy Wright: It might help the hon. Lady if I clarified two points relating to what she has just said. First, in all contracts we will expect those taking on the work to employ properly skilled staff—not to do so will not be permitted. Secondly, those who decide whether someone is a high, medium or low-risk offender will be public sector national probation service employees, not contractors.

Meg Hillier: I thank the Minister for that clarification, particularly the first point, which is indeed good news. I was not a member of the Public Bill Committee and so might have missed some changes that have been made.

Mrs Moon: Will my hon. Friend give way?

Meg Hillier: Yes, but I will just finish responding to the Minister’s intervention.

On the Minister’s second point, I hear what he says, but there is always a risk that someone might be miscategorised and dealt with by an employee who is of a lower grade. The Minister says that they will be qualified, but they will be of a lower grade than fully qualified probation officers, and that decision might need to be made in the other direction. Perhaps he can reassure us on that point when he responds.

Mrs Moon: I should have waited for my hon. Friend to finish responding to the Minister before seeking to intervene, because she has just covered the point I wanted to make. It is not about the level of skills, but the qualification, because the qualification provides a background of knowledge that enforces and informs the way in which a probation officer acts. Someone who is deemed to be skilled might actually be unqualified, so it is important to have the qualification and the experience and skills.

Meg Hillier: I thank my hon. Friend for her comments.

I am also worried about some of the companies that might come into this. I serve on the Public Accounts Committee, and I challenged the big public sector providers that appeared before us recently on whether they would bid for contracts in areas where they had no experience. They all denied that they would, but we have seen, in the

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Public Accounts Committee, in other Committees and on the Floor of the House, example after example of companies that bid for contracts because they are good at bidding but that do not actually have a background in delivering the relevant service. They then have to backfill by recruiting people to take on those jobs. I have dealt with the Minister on constituency matters and know him to be assiduous, and I am sure that he will bear that point in mind, but I think that it is worth reiterating that it is a very serious matter. Companies should not be bidding for huge contracts in areas where they have no experience because that fragments the service.

Fragmentation can be good where there is specialism, where there are smaller contracts, perhaps run by specialist voluntary sector groups, or indeed by private companies if they have the necessary level of expertise, but they have to work together. We are in danger of seeing another approach whereby the MOJ and the Government put out big contracts and the smaller specialist providers simply do not get a look in. They might get the odd crumb from the big contractors’ table, but they will be squeezed out. That is particularly true in mental health, one of the local concerns in my constituency.

There is an important concern about local accountability. I am a great supporter of extending freedom of information in the first instance, even with limitations, to private sector companies that deliver public contracts paid for by the taxpayer. It should be the tax pound that determines whether there is freedom of information, not the nature of the delivery body. Most parties in the House support some degree of contracting out, but we need to ensure that transparency is built in. Companies have told the Public Accounts Committee that they are in favour of a much greater degree of transparency, so perhaps the Minister will take this opportunity to challenge them to stand up for what they say and make that part of the bidding process.

New clause 4 is important—I will not repeat all the arguments Members have made—because we need proper scrutiny. If we look at reoffending as a whole, we see that there are other ways of looking at it, for example by looking at mental health support or the Work programme. We know that offenders who come out of prison with a job are less likely to reoffend, but does the Work programme, which is provided by another Government Department, go into prisons to ensure that offenders have jobs for when they leave? Perhaps we should be challenging them to step up to the mark and provide job opportunities as a major plank of what we all want to see: less reoffending, particularly by offenders given short-term sentences.

In summary, the Public Accounts Committee has seen far too many poorly managed large Government contracts. The Cabinet Office is pushing hard to see that procurement is done in a different way that allows smaller companies a bite of the Government contract cherry and to stop the big companies being able to snaffle public money without being held properly to account. This is an opportunity for the Minister to consider, even at this late stage, allowing something in the contract to ensure that the big companies are required to work effectively with the small companies and not, as many of them do, to dodge their responsibilities later by saying, “Actually, we can’t quite deliver what we promised, so we’ll do it differently, but we’ve taken it all on.” That is

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often how they get around that. That will need constant monitoring and an audit of what happens with the contract. If this is to go ahead, I urge the Minister to tell us how the Government plan to audit the impact and the delivery of the service.

Mr David Hanson (Delyn) (Lab): I begin by echoing the comments of my hon. Friend the Member for Darlington (Jenny Chapman) about our late colleague Paul Goggins. I followed him as a Justice Minister, doing the job he did when he was in the Home Office and had responsibility for probation, and I know how well respected he was in the sector, by officials and the community at large. I also had the pleasure of sharing time with him as a Northern Ireland Minister, where he was also well respected. This is my first opportunity to put that on the record in the House. I will attend his funeral on Thursday, along with many colleagues across the House, to pay my final respects to Paul for all his work.

I wanted to speak in this debate for several reasons. Nobody disagrees with the Government’s general premise for dealing with offenders sentenced to 12 months or less in prison. They are often prolific offenders who go on to reoffend. They are often tomorrow’s serious offenders. It was an aspiration we had when I served in the Ministry of Justice to try to reduce their reoffending. We need to involve the voluntary and private sectors in supporting rehabilitation work for individuals who go to prison and come out within 12 months. Housing associations, voluntary providers and employers all have a role to play. That can be done in a positive way by the voluntary and private sectors.

Let us therefore not have a debate today on the difference between the Government and the Opposition on the need to involve some elements of the voluntary and private sectors. Instead, I want to raise my concerns about the issues addressed by new clauses 1 and 4. New clause 1 would ensure that we put a parliamentary brake on reorganisation, pending proper parliamentary scrutiny, and new clause 4 would put in place a pilot to test some difficult and serious matters in relation to which mistakes—they will be made, because that is the nature of the business the Minister deals with—will have a real impact on the community at large.

New clause 1, which I fully support, would prevent the Government from selling off or restructuring the probation service unless the proposals had first been laid before, and approved by, both Houses of Parliament. It is no secret that if the Government did that this year, they could put a Bill before Parliament and get it through before the general election. They could have it scrutinised and probably, because of the votes they have in this House, get their way. I object to the Government using the Offender Management Act 2007 to achieve that objective. I declare an interest, because I was the Minister who took that Act through the House. At the time I was pressed strongly by many Members on my own side, including my hon. Friend the Member for Hayes and Harlington (John McDonnell), on whether it meant the privatisation and break-up of the probation service. I was pressed very hard about whether it meant, in practice, the abolition, ultimately, of probation trusts.

I gave assurances during the Bill’s passage through the House and I want to repeat them today, not because they have not been heard here before, but because they

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support what my hon. Friend the Member for Darlington says in new clause 1 and are worthy of repetition. On 18 July 2007, I, as the Minister, said from the Dispatch Box:

“There will be a mixture of commissioning. Some will be at national level, because in certain cases and with certain contracts that will be the best way of securing a strong and efficient service. There will also be a strong role for those commissioning work at regional level. As my hon. Friend surely accepts, economies of scale will sometimes be necessary, and some services will be best purchased and commissioned at that level. However, there will also be a need for local probation trusts to act not just as service deliverers but as commissioners of services from the voluntary sector, or from others, providing a proper service to help prevent reoffending at local level.”—[Official Report, 18 July 2007; Vol. 463, c. 352-53.]

I said that in support of what my noble Friend Baroness Scotland and the then Lord Chancellor, my noble Friend Lord Falconer, said in another place when introducing the Offender Management Bill. I would be interested to hear what the Minister has to say about that. I am very pleased that the hon. and learned Member for Harborough (Sir Edward Garnier) is present, because I said it in response to a Lords amendment that he supported and that sought to do exactly what the Minister is seeking to do now to the probation service. We rejected it and I put it on record that the Offender Management Bill would not be used for that purpose.

I would be grateful if the Minister reflected on Pepper v. Hart from 1992. Legislation can be interpreted according to what a Minister said at the Dispatch Box about what they thought about a particular interpretation of a Bill. My assessment is that during our deliberations on the Offender Management Act, I, on behalf of the then Government, rejected from the Dispatch Box an amendment that sought to do what the Minister is now doing; supported the aspirations of my noble Friends Lord Falconer and Baroness Scotland; and spoke in support of retaining probation trusts to commission at a national, regional and local level. As my hon. Friend the Member for Hayes and Harlington has said, it is an abuse of this House for the Minister to try to use that legislation to secure his objective.

Will the Minister—just for me, so I can sleep easy in my bed—put on public record the legal advice he has received that says that he can do what he is doing, so that we can test his interpretation against the potential interpretation of lawyers outside the House under the terms of Pepper v. Hart?

Jeremy Wright: I am not sure I will be able to help the right hon. Gentleman sleep easier in his bed. Equally, I do not want to pull rank on him, but I have to put to him something that was said by his then boss—the then Home Secretary and the now noble Lord Reid—on Third Reading of the Offender Management Bill in this House:

“I can therefore give an assurance today…that the core offender management tasks of the probation service—for example, offender report writing, offender supervision and breach proceedings—will remain in the public sector for the next three years.”—[Official Report, 28 February 2007; Vol. 457, c. 1024.]

Will the right hon. Gentleman explain why his then boss did not say “for ever” instead of

“for the next three years”?

Mr Hanson: I do not wish to upset the Minister, because he is a decent cove, as far as he can be with his brief, but the noble Lord Reid was never my boss. I have

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never served under him and he never line managed me in any way, shape or form. When I served as a Justice Minister, my noble Friend Lord Falconer and my right hon. Friend the Member for Blackburn (Mr Straw) were my bosses. What I said at the Dispatch Box at the time was said on their behalf. We supported a publicly supported probation service.

Jeremy Wright rose

Sir Edward Garnier rose

Mr Hanson: I give way to my former shadow, the hon. and learned Member for Harborough.

Sir Edward Garnier: I think my shadow is rather bigger than it used to be. I want to encourage the right hon. Gentleman with the tedious little point that at least he and I have remained consistent over the past seven years, so why not comfort himself with that and then we can put this to a vote?

Mr Hanson: The point I am trying to make is that I support new clause 1 because the Government are trying to use the 2007 Act to take an approach that the then Ministers, in both Houses, rejected. I accept that the Minister believes that he has a legal basis to do this. I simply ask him to publish it, so that we can test it in due course. I am happy for the Minister to intervene, but he will have a chance to respond later. Like my hon. Friend the Member for Darlington and other hon. Members who have spoken, I remain concerned about the proposal, because I believe it is a gamble.

3.15 pm

Jeremy Wright: I take the right hon. Gentleman’s point that I will have a chance to respond later and I suspect I will have quite a bit to respond to by then, but I wish to address this specific point. I apologise to him for my misunderstanding of the chain of command back in the days of his time in government. However, unless I misunderstand him, I do not think he is suggesting that the noble Lord Reid was not speaking for the Government on that occasion. On the question of whether I will publish legal advice, I can do better than that by referring the right hon. Gentleman to the Offender Management Act itself. Section 3(2) states:

“The Secretary of State may make contractual or other arrangements with any other person for the making of the probation provision.”

That is clear authority to do what we are doing, is it not?

Mr Hanson: This is the nub of the argument: I accept that the Minister believes he is acting in good faith under the Act, but what I am saying is that the interpretation I gave from the Dispatch Box, and that other Ministers gave in another place and in this House, was that the Act could not to be used for the Minister’s current purposes. My interpretation was that the Act could be used to contract the voluntary and private sector to deliver some services, but not the core probation service, which is what the Minister seeks to do. We can disagree about that—it is a matter of conjecture—and I think that the appropriateness of our comments could be tested under Pepper v. Hart.

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If the Minister votes for new clause 1 he will have an opportunity to bring back new proposals and, as has been suggested, to pilot them so that we do not have to take a serious gamble and have an artificial split between public and private providers, or face the risk of cherry-picking and big companies hoovering up contracts. Moreover, we would not have the risk brought to my attention by a probation officer in my own constituency who corresponded with me this very week. She will remain anonymous because of her current status, but she said in her letter:

“This system is not tested. It’s just ideas and assumptions based on political ideologies. Knowing the work as intimately as I do I can’t tell you how risky this is.”

I know from my time in the Ministry of Justice that there will be risks and challenges in the management of offenders. One of the serious cases with which I had to deal as a Minister was when a low-level offender who was being supervised by the then London probation service broke into a property in Lewisham, close to the constituency of my hon. Friend the Member for Lewisham East (Heidi Alexander), undertook a burglary and, in doing so, murdered two individuals, set fire to them and burned the property down. The offender was given sentences of 40 and 35 years respectively and is, as we speak, serving them at Her Majesty’s pleasure. That was a low-level offender who committed a high-level offence. There is always risk.

I accept that that happened under the probation service—mistakes will happen; this is a risky business—but I am worried about the steps the Minister is taking without the pilot proposed by new clause 4 or the brake and proper parliamentary scrutiny proposed by new clause 1. That raises the risk even higher in a system that, by its very nature, is risky.

Mr Gordon Marsden (Blackpool South) (Lab) On that point, does my right hon. Friend agree that there have been discussions about the difficulties of making judgments about low-risk people left in the private sector? He may recall that I raised in the House the case of Jane Clough who was murdered in the Blackpool Victoria hospital car park by her former abusive partner while he was on bail. The Government accepted the thrust of that campaign when they made changes in relation to the Legal Aid, Sentencing and Punishment of Offenders Act 2012. Does that not show that the ability to have an artificial division between the two will not work?

Mr Hanson: I am grateful to my hon. Friend for mentioning that case. Given the nature of probation service business, mistakes will be made. My contention is that mistakes that might currently be made could very much be exacerbated by the fragmentation of the service and the potential downgrading of its quality, as well as by the fact that the existing public accountability will not be as clear cut.

Mrs Anne Main (St Albans) (Con): The right hon. Gentleman is making a very interesting speech. I am sorry that I missed its beginning, but I was at the Backbench Business Committee. Has he dealt with the sifting process? Some of my constituents have expressed concern that it is done at a snapshot in time, as they have been allocated to two different services based on the window of 11 November. Has he tackled that?

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Mr Hanson: I am grateful to the hon. Lady for raising that matter, which just exacerbates and adds to our concerns.

The process is never a precise one. I want the Minister to justify—perhaps not today nor by agreeing to new clause 1, but through a proper parliamentary procedure or the evaluation of pilots—how his proposals for a radical change in the probation service will do what he wants, as well as what my hon. Friends and I want, which is to reduce offending and reoffending. My worry is that the Minister’s proposals—in many ways, they are adjacent to the provisions in the Bill—might increase the reoffending that may occur for reasons that have been mentioned.

I urge the Minister to consider new clauses 1 and 4 in particular, and to publish, for the House to scrutinise, the basis on which he has so far made decisions in relation to the 2007 Act.

Heidi Alexander (Lewisham East) (Lab): It is a pleasure to follow my right hon. Friend the Member for Delyn (Mr Hanson). He has great expertise in this matter, given his previous ministerial role. I am not sure that I will trouble the Minister with the same level of detail about the proposals. I want to make a short speech on some of the things I have learned about how the probation service operates in my area and about the need for us in Parliament to have a vote on whether the wholesale privatisation of the probation service should go ahead.

In recent weeks, I have visited Lewisham probation trust and met its staff. The Lewisham trust is very busy. It ranks fourth among London boroughs with respect to the complexity and risk of the cases with which it deals. A quarter of the cases it deals with involve young people aged between 18 and 25.

When I spoke to staff, they expressed very serious concerns about the plans to fragment and break up the probation service and, indeed, to privatise great chunks of it. They believe that the proposals actually endanger some of the important and innovative work they are doing. For example, they recently set up a specialist team to deal with the problem of young offenders, whereby staff time is split between the youth offending service and the probation staff so that the two services join up better. They told me that the proposals the Government wish to force through in the next year will lead to huge upheaval and massive duplication, and will make it less likely that the work that is so important in our community for reducing reoffending is moved forward and can bring about the outcomes we all want.

The management of the trust told me that instead of being externally focused on reducing reoffending and protecting the public, over the next couple of months their priority will be to support staff through the transition and to make sure that they move cases between the split services in a way that ensures that no cases are lost and no mistakes are made. That does not make sense to me. The priority for the management and those with experience should be to ask, “How do we reduce rates of reoffending out there in the community?”

What will happen when the case load is split? As I understand it, 70% of the cases will be dealt with by community rehabilitation companies and others will be left with the new national probation service. How will those really difficult decisions be made about the risk

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that such young offenders present? The people who work in the probation service tell me that such judgments, particularly those about young people, are very difficult to make.

Jeremy Wright: The first point I want to make to the hon. Lady is that the proposals we are discussing do not cover young offenders, but only adults. The second point is one that I made earlier, but I am not sure whether she was in the Chamber at the time. It is that in relation to risk assessments and the judgments she describes—I accept that they are difficult—such judgments will be made by employees of the national probation service, who are public sector employees.

Heidi Alexander: I fear that the Minister may have misunderstood me. When I spoke about young people, I meant those between 18 and 25. As I understand it, the proposals in the Bill relate to that age group.

Another point that has been made to me by probation staff in Lewisham is that one key to the reduction of reoffending relates is having stable relationships between probation staff and the individuals with whom they work, so that they can build trust and work together to achieve the things that will put those young adults on to a better path in life. If young people are transferred between different organisations because their risk fluctuates, I wonder how there can be that stability in such relationships that I am told is so crucial to the reduction of reoffending.

Some Government Members, particularly the hon. and learned Member for Harborough (Sir Edward Garnier), seemed to suggest that the Opposition have some ulterior motive for saying that we want to pilot the schemes and to have a vote in this House before these very significant proposals go ahead. I want to put it on the record that our interest in this debate is public safety, what is effective and what works. They ascribe to us motives that simply do not represent our position. We are advocating what is in the best interests of the public and asking how we can really get to grips with reducing rates of reoffending, which are far too high in our country.

Jeremy Wright: May I begin by endorsing entirely what the hon. Member for Darlington (Jenny Chapman) and the right hon. Member for Delyn (Mr Hanson) said about Paul Goggins? Paul was the first Minister I went to see as a newly elected Back Bencher. I was struck not only by his command of the brief, but by his inherent kindness, his reaction to somebody who was not of his party and his willingness to give me whatever assistance he could. That continued throughout the time that I knew him in this House. As others have said, he will be missed on a personal level by a great many people on both sides of the Chamber. It is right for us to recognise today that he will be missed in debates such as this. The lack of his warmth and wisdom on these subjects and many others will make our debates all the poorer. I know that we will all miss him in the Chamber more generally.

We have had an interesting and informed debate on this group of new clauses. There is no doubt that the substantial burden of the debate on the Bill has been not about the contents of the Bill, which are broadly uncontroversial, but about the wider reforms that surround the Bill. I understand why that is. It might therefore be helpful if I spend a little time dealing with what is at the

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heart of the Government’s reforms to probation and why we believe they are so urgent. That will relate to the issue of piloting, which has been raised this afternoon.

3.30 pm

One reason for our belief that this is an urgent matter is that reoffending rates have barely changed over the last decade. That is not true only of offenders who are released from short sentences, whom we all agree get little or no support at the moment after release, but of every group of offenders. For adult offenders who serve community sentences, the reoffending rate in 2011 was 34%. After falling in the early 2000s, that trend has been broadly flat since 2005. For adult offenders who are released from custodial sentences of less than 12 months—the group that we are interested in—the reoffending rate in 2011 was 58%. That trend has been broadly flat since 2002. For adult offenders who are released from custodial sentences of 12 months or more, the reoffending rate in 2011 was 35%. That trend has been broadly flat since 2005.

I recognise that those rates have barely changed despite the considerable efforts and very good work of probation officers up and down the country. It has never been part of my argument that the changes are justified because no good work is being done. In my view, good work is being done. None the less, there is clear justification for a change in approach.

Jenny Chapman: If the Minister wants us to accept everything that he has said so far, will he explain why it was a good idea to cancel the trust probation pilots when he did?

Jeremy Wright: The pilots that we cancelled were not sufficiently close to the proposals that we are making for us to learn as much as Opposition Members would like us to have learned from their conclusion. That does not mean that we learned nothing from their period of operation. The point has been made from the Opposition Benches that it is possible to learn from pilots even if they are not allowed to run to full term. We certainly have learned from those pilots and from other experiences of payment by results. I will return to that point in a moment.

The Government essentially had two options. We had to decide how to approach the task of tackling reoffending rates within our means. The hon. Member for Lewisham East (Heidi Alexander) is right that reoffending rates are too high. We could not allow that situation to continue without a response. We could simply have imposed further significant cuts on the 35 probation trusts without targeting our efforts on those with the highest reoffending rates, or we could have brought in innovative approaches to supporting offenders that would also be more efficient and that would allow us to reinvest some of the savings to target support through the gate on the under 12-month group. We chose the latter option. At the heart of our proposals is the aim of opening up the supervision of low and medium-risk offenders to a diverse range of new rehabilitation providers to bring in the best of all sectors to tackle reoffending.

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The right hon. Member for Delyn discussed the Offender Management Act 2007. He was here at the time and witnessed the passage of the Act at first hand. He knows that what I have described was the policy of the Government at that time. The Opposition want to forget it now, but they have to be reminded that the powers for which they legislated and to which Parliament agreed in 2007 entirely underpin the reforms that this Government are making. I have explained what Lord Reid said when he was Home Secretary. He made the matter perfectly clear when he said:

“The Secretary of State…will be responsible for ensuring service provision by entering into contracts with the public, private or voluntary sectors. With that burden lifted, the public sector can play to its strengths while others play to theirs.”—[Official Report, 11 December 2006; Vol. 454, c. 593.]

Mrs Main: The Minister is making a powerful case for why there needs to be reorganisation. However, will he help the staff who will be involved in the transition process by saying what the new organisations will look like? My constituents have told me that there is uncertainty about the new bodies that they will be obliged to work with and concern about what they will look like. Perhaps that would help to make the transition a little easier.

Jeremy Wright: I agree with my hon. Friend that it is important to keep existing staff informed about what is going on. We are trying very hard to do that. If there are specific issues in her area, I am happy to look at them. We are keen to ensure that staff are informed. If she will forgive me, I will come back a little later to the pace of the changes that we are making, which has been a substantial issue this afternoon.

Before I do that, I want to make a couple more points about the background to this point, and the issue of further parliamentary approval for what we are suggesting. I have already made the point that section 3(2) of the Offender Management Act 2007 states:

“The Secretary of State may make contractual or other arrangements with any other person for the making of the probation provision.”

In Committee, the Opposition were unable to dispute that the power that they legislated for is clear and unambiguous. The phrase

“contractual or other arrangements with any other person”

does not mean solely with probation trusts or trusts commissioning other providers, or solely with the public sector.

Mr Hanson: I do not wish to take up too much time on this point, but the Minister will know that when that debate took place, the intention was that the national probation service and the Ministry of Justice could contract for unpaid work, for example, on a national basis, but that for core probation services the probation service locally would still be responsible for the lead provision under that Act.

Jeremy Wright: Again—I made this point earlier when I intervened on the right hon. Gentleman—I do not think that Lord Reid could have been any clearer on Third Reading. No doubt under considerable pressure from Back Benchers in his party, he undertook that those core functions, including two things that we do not propose to move from the public sector—advice to

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court and breach of proceedings—would remain in the public sector for three years. That was not in perpetuity, not as a matter of principle, but for three years which, conveniently enough, took him up to the date of the general election. I think we can all take from that a pretty clear understanding that the Labour Government were not promising that those functions would stay in the public sector for ever; they did it to take them up to the general election.

Mr Hanson: Can we be clear? Lord Reid was not the Minister responsible when the 2007 Act was dealt with in these Houses of Parliament. I was the Minister of State, my boss was Lord Falconer, and the Minister in the other place was Baroness Scotland. Those were the three Ministers dealing with the 2007 Act in June 2007.

Jeremy Wright: I understand the right hon. Gentleman’s point, but it is pretty clear that Lord Reid was speaking on Third Reading of that Bill on behalf of the Government. If the right hon. Gentleman thinks that what Lord Reid was saying did not represent the Government’s position, he had better take it up with him. We have to go by what Hansard tells us.

Mr Sheerman: As someone who was present at that time, and who would count themselves as a reasonably good friend of Lord Reid, I think there is a different interpretation and that the Minister is taking this out of context. Lord Reid had no experience of the many private sector providers, such as Capita and G4S, that are being sought for this role but that now have a different focus and profile because they have failed. With that experience, do we really want to destabilise a wonderful profession and give it to companies such as those?

Jeremy Wright: The hon. Gentleman is making a slightly different point. I am talking about what authority is given to this Government by the Offender Management Act and, more broadly, what the previous Government thought they were doing when they passed it. The case made by Labour Members is that we have in some way taken that Act and twisted its meaning. It has been taken wholly out of context, and we have a travesty of a representation of what that Act says and means. I have been saying to the right hon. Member for Delyn and his colleagues that what the Act says is very clear, and the Hansard that supports it is also clear. Not only did the previous Government anticipate that such a thing could happen, they chose not to rule out the possibility of its happening. They had every opportunity to do so but they did not take it. That is my point.

More to the point and in connection with further parliamentary approval, the Offender Management Act says nothing about requiring Parliament to approve the exercise of that power. By contrast, section 15 of the Offender Management Act provides that an order repealing or disapplying the restriction of certain functions, including advice to court, to the public sector, must be subject to parliamentary approval. If, when in government, the Opposition had wanted to ensure that the power in section 3 for the Secretary of State to enter into arrangements for probation provision was subject to the affirmative resolution procedure, they could have done so, but they did not.

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What is more, the Labour Government were prepared to guarantee that the supervision of offenders more widely would remain in the public sector for only three years, as I have said. Let us be clear: the Labour Government’s position was that the supervision of any offender—not just medium or low-risk offenders—could at some stage be competed for outside the public sector. This Government are not saying that. We say that medium and low-risk offenders should be competed for. Secondly, the Labour Government’s position was that the only element of parliamentary scrutiny of the Secretary of State’s powers to organise the probation service relates to the relatively narrow concept of advice to courts, which this Government do not intend to alter. Thirdly, the previous Government’s position was that the public sector monopoly on providers would be guaranteed for only three years.

The hon. Member for Darlington now proposes a new version of the new clause. I am not convinced that new clause 1 does exactly what the Opposition want, because the word “national” next to the word “restructure”, which is designed to avoid the need for any small change of probation to be debated in the House, does not necessarily apply to the word “reform”. Therefore, we might end up being asked to discuss very minor changes to the probation service. Beyond that, the basic point is that the Labour Government were given the opportunity to ask for a further check in Parliament for the provision but did not do so. It is a little odd that Labour Members now say that they want one.

On the substance of the reforms, we have spoken about the establishment of 21 new community rehabilitation companies in England and Wales. In the first instance, they will be publicly owned for a number of months before we consider whether to transfer ownership to other organisations. It is open to organisations from the private, voluntary and community sectors, as well as organisations currently working in probation trusts, to bid for those first-tier contracts. Part of the payment of those organisations will be based on results, so that we incentivise a greater focus on tackling reoffending and achieving better value for the taxpayer.

A number of the proposals tabled by the hon. Member for Hayes and Harlington (John McDonnell)—he has tabled new clauses 9, 10 and 11—remain flawed, as they were in Committee. As drafted, they would apply only after a competition has concluded, and would not prevent organisations from bidding, which is what I believe he wants to do.

Jenny Chapman: The Minister unsurprisingly comes up with technical reasons why those proposals are deficient, but he knows what my hon. Friend the Member for Hayes and Harlington (John McDonnell) is getting at. Will the Minister therefore confirm that he will not accept bids from any consortium that has, as a partner, G4S or any other organisation that is under criminal investigation by the Serious Fraud Office?

Jeremy Wright: I entirely understand what the hon. Member for Hayes and Harlington is getting at, but I am afraid that I do not dismiss as lightly as the hon. Lady flaws in the proposals that we are being asked to support. If they are flawed, the House should not support them.

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Let me reiterate the Government’s commitment to publishing contracts for the delivery of services to low and medium-risk offenders. That includes not just draft contracts, as I have said, but final versions of the future contracts for probation services. I hope that that is some reassurance to the hon. Member for Hayes and Harlington. Likewise, I reassure him that the Government will include within the contracts for rehabilitation services a provision that enables the National Audit Office to access private providers’ records and documents for audit purposes. Of course, the NAO might require access to the community rehabilitation companies’ financial systems when there is a need for public assurance. That will be reflected in the contracts. That also answers the point made by the hon. Member for Hackney South and Shoreditch (Meg Hillier).

The new clauses seek to limit who can bid for contracts by excluding certain organisations. For example, prime providers for the Work programme could be excluded. I am afraid that that would simply reduce the diversity of the market of rehabilitation providers. Many organisations are doing important work within the Work programme, including voluntary organisations working with disabled and disadvantaged people.

The hon. Member for Darlington made a point on fraud, which the new clauses tabled by the hon. Member for Hayes and Harlington address. Let me be clear that the Justice Secretary and I are determined to ensure the integrity of future contracts to deliver value for money for the taxpayer. The Ministry of Justice is currently following a proper procurement process and will do so in future competitions. It is that process that should rightly be used to determine who can bid for contracts and who the future providers of services should be. Procurement law permits consideration of issues that affect a bidder’s eligibility, such as fraud, only at the initial prequalification stage, and not after that stage unless a bidder’s circumstances have changed.

In respect of the current competition to identify the future owners of the 21 CRCs, the prequalification stage was completed in December. Even at that stage, we would not have been legally allowed to exclude a bidder on the grounds that they were under investigation for fraud. The grounds for mandatory exclusion under procurement law are that the bidder has, or any of its directors have, been convicted of fraud. The ongoing investigation by the Serious Fraud Office into the conduct of G4S and Serco—which, I remind the House, this Secretary of State initiated—in delivering the Government’s electronic monitoring contracts would not have provided a legal basis for excluding those organisations from the current competition.

3.45 pm

Jenny Chapman: I just want to be clear about this, so that colleagues on both sides of the House can be clear. Despite all the assurances that the Minister has given here in the past, he is saying that companies under criminal investigation by the SFO will be able to be partners in bidding for provision of services to monitor offenders in the community.

Jeremy Wright: The point I am making is that the rules, which pre-existed this Government by the way, are very clear: investigation is not the same thing as

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conviction. We have made it very clear, however, that we have initiated our own investigations. I have warned the hon. Lady before that she is sitting in a very large glass house and that she should think before throwing stones. This is a contract negotiated by her Government and substantially abused, it would seem, during her Government’s term in office. That abuse was discovered by this Government and acted on by this Government. She is hardly in a position to suggest that we have behaved in any way improperly. In any event, I remind the House that both organisations, Serco and G4S, are not on the list of lead providers.

The hon. Member for Hayes and Harlington raised the question of whether those organisations could act in a supporting role. The answer is that we will want to look very carefully not just at the process of corporate renewal those companies are undergoing at the moment but at the specific bids they are making. However, they are not on the list of lead providers. I remind Opposition Members that we were told not so very long ago that the proposals could never work without G4S and Serco, that no one would be interested in bidding. We have a list of 30 different bidders, comprising 50 different organisations at lead bidder level. The Opposition are simply wrong about the level of interest.

John McDonnell: I just want to get this absolutely clear and on the record. What the Minister is saying is that the two organisations that the Serious Fraud Office is investigating will be allowed to bid as part of a consortium for some of these contracts. In addition, I see that also on the list are A4E, which, if I remember rightly, was forced to hand back money to the Government as a result of its failure on contracts—in fact, some fraudulent activity on contracts—for the Department for Work and Pensions. We are opening up this whole network to a group of villains.

Jeremy Wright: The hon. Gentleman needs to be very careful with his language. He needs to understand that someone being investigated is not the same thing as someone being found responsible for poor conduct. It is important for a Justice Minister, in particular, to recognise that distinction. I assure him that in relation to each and every bid we receive we will look very carefully not just at the bid but at the organisations making the bid. He has heard me say on many occasions that we will not be awarding contracts to any organisation we think unfit to hold them.

Let me make the point, because it has been raised, that all the bidders on our list have experience of either working with offenders or across the wider criminal justice system. This is exactly the broad market that we want to see deliver these services. Below the community rehabilitation company level, we want to ensure that smaller organisations from the voluntary community and social enterprise sectors are able to play a key role in delivering rehabilitation.

Mr Marsden: I am grateful to the Minister for being generous in giving way, but does he not understand that the Secretary of State introducing these proposals is the same Secretary of State who did the same thing with the Work programme, from which those voluntary and third sector organisations are, more or less, entirely absent?

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Jeremy Wright: I do not agree with the hon. Gentleman’s characterisation of the Work programme, and anyway, as he might have heard me say more than once, this proposal is not a clone of that programme. It is a different proposal, as it must be, because the criminal justice system is a different entity. It is important to recognise that.

On smaller voluntary organisations, about which people have understandable concerns, the House might be interested to know that along with the 30 lead providers that have passed the competition’s first stage, a further 800 organisations have expressed an interest in playing a role as part of the wider supply chain, with more than 550 voluntary sector organisations among them. In the process of contract management, we will want to manage properly the relationships between the larger and smaller players to ensure that those relationships are sustainable in the long term.

John McDonnell: Let me explain to the Minister why some of us feel strongly about this matter and why some of our language is strong. The Government awarded the contract for unpaid work in Greater London—so this affects our constituencies—to Serco. I will briefly set out some of the problems that have occurred: works shops have been closed, shutting down placements for women high-risk offenders; offenders recently complained to a probation officer in north-west London—my area—that no supervisors were available onsite; and rival gang members have been placed on the same scheme and transported in the same way. In addition, a known sex offender was alleged to be on the same placement as a victim. That is why we are angry.

Jeremy Wright: I understand the hon. Gentleman’s concern, but I do not agree with his characterisation of Serco’s contract. As he would expect, we have looked closely at its performance under the contract and, again, I assure him that we will look closely at all those who bid for this work. As with all competitions, the decision to award each contract depends on our being satisfied that bidders can meet our standards in respect of quality of service and price and, in this case too, on our being satisfied about the financial risk being taken to reduce reoffending and ensuring good value for the taxpayer. If we are not satisfied that overall bidders can meet our requirements, we will not award them contracts.

Hon. Members have raised the issue of the management of high-risk offenders, so let me make it clear exactly what will be involved. We are creating a new national probation service to manage directly all offenders who pose a high risk of serious harm and any sexual or violent offenders subject to multi-agency public protection arrangements. After an offender has been sentenced, the NPS will make an initial assessment of an offender’s risk of causing harm, and all offenders assessed as posing a high risk of serious harm will be the responsibility of the NPS. For low and medium-risk offenders, CRCs will be required to manage any risk of serious harm that the offender might present and to have appropriately trained staff and robust procedures in place for the management of cases where the risk of serious harm escalates to high during the offender’s supervision. They will also be contractually required to refer cases back to the NPS if they consider that the risk of serious harm might be escalating. In the end, the decision will be taken by the NPS.

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New clauses 5 and 13 deal with reports by the Secretary of State to Parliament and the public on the impact of the reforms we intend to make. I want to reassure the House that the Government are already committed to acting in the spirit of those amendments. We are already considering how we can provide information about reoffending rates broken down by CRCs and the NPS. As Members will know, the MOJ already publishes reoffending statistics, not just annually but every three months, broken down by probation trust, prison and upper and lower-tier local authorities. I am happy to commit to the House that, in the future, the reports will break down reoffending rates for the different CRCs and the NPS. Indeed, as a first step, we have already published on the MOJ website a set of indicative figures to show what reoffending rates and cohort sizes in each contract package area would have looked like had the new structure been in place for the 2005-10 period. We are also piloting the justice data lab, about which I have spoken before, which will give providers the opportunity to match the performance of their cohort with something comparable.

On freedom of information, CRCs will be required in contracts to assist the MOJ in discharging its obligations under the Freedom of Information Act—very much along the lines of what my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith), the Chairman of the Select Committee, outlined earlier, and in accordance with his Committee’s reports and conclusions.

On penalties, we are developing a performance framework that will include financial penalties for services not delivered to time or to quality. Contracts for CRCs will reflect that and, as I have said, the House will be able to see that this is the case when we publish those contracts in draft. I do not want to lose sight—nor should the House—of the major prizes here: first, expanding support for offenders released from short sentences and, secondly, developing a through-the-gate system for offenders released from prison. I think that that commands a broad measure of support.

That brings me to new clause 6, tabled by the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd). I want to reassure him that as part of our reforms there will be a new resettlement service provided in custody for all offenders before their release. This will be tailored to the individual’s needs, but is likely to include support in finding accommodation, family support, mentoring and financial advice. Services in custody will be underpinned by the changes to the way in which the prison estate is organised. That will mean that, in most cases, the same professional can work with offenders in custody and continue their rehabilitation work in the community.

As the right hon. Gentleman would expect, the Ministry of Justice and the National Offender Management Service are working closely together to ensure that the Prison Service is well prepared to implement these proposals. Right from the outset of these reforms, we established a joint working group on this topic that reports to senior officials and ultimately to Ministers. The working group has commissioned an analytical model of prisoner flows through the prison estate. That allows us to test the impact on prisoner flows and locations from implementing the resettlement prison allocation model. Furthermore, I can reassure the right hon. Gentleman that the Prison Service is undertaking a full review of facilities and staffing levels at all proposed resettlement prisons. Together

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all these things will ensure that the changes we are proposing are deliverable and sustainable, which I think is exactly his concern.

On new clause 4, I understand that the case of Opposition Members is that this is a huge leap in the dark and that no testing of what we are doing is or will be going on. That is not the case. Let me set out to the House the key elements that make up our reforms, what we are doing to test them and the steps we have built in to assess how effectively they are working at key stages of implementation.

First, there are the reforms at the heart of the Bill: the extension of licence and supervision to offenders released from short custodial sentences. There are lawyers among Opposition Members, and they will know, and ought to appreciate, that with a change to the sentencing framework of this magnitude, it cannot be desirable to introduce it one part of the country but not another. To do so would risk postcode justice, with some offenders getting different sentences from others.

To expand supervision to the under-12-month group, as we all say we want to do, we need to make the changes at a national level. That means funding those changes at a national level. The savings to fund the changes come from two sources; first, the efficiencies generated by competing supervision of low and medium-risk offenders and, secondly, the back office savings from moving to 21 from 35 CRCs, along with a single national probation service. Competing services in only one area of the country, if that is what is being proposed—I have heard little detail as to what sort of piloting is being proposed here—would extend supervision to short-sentenced offenders but, in every other respect, we are carrying out extensive local testing of the reforms in no fewer than 14 probation trusts. There is also the testing we are carrying out on the new operating model for the CRCs and the NPS. Those tests will enable us to inform how the new processes will operate once implemented. The first round of tests has already started and will continue over the coming months.

Secondly, there is the important fact that the 21 CRCs that we are creating will remain in public sector ownership for some months after their creation until the conclusion of the competition. This gives us further opportunities to carry on testing and to refine the system. Caseloads will not all necessarily transfer at the point the NPS and CRCs come into being, and we have made it clear to trusts that where there is a case for doing so, we will give greater latitude to allow for caseload transfer to operate more slowly than the people transfer process. That will avoid disruption and the type of dangers that that might create, which Opposition members have described.

Thirdly, there is the testing that we are carrying out of our approach to payment by results. We have consulted extensively on this and there are also pilots under way to test different approaches to payment by results. Opposition members would have us believe that there has been no piloting and that there is no piloting. Neither of those two things is true.

Jenny Chapman: Will the Minister give way?

Jeremy Wright: In just a moment. The pilots that we are already undertaking—HMP Peterborough and Doncaster—are providing significant lessons for our

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wider reforms. Not only that, but they are engaged in another aspect of the reforms—the move to a through-the-gate system supporting the transition from custody to the community. The difference between them and the other pilots referred to is that these are much closer to the model we seek to pursue.

Jenny Chapman: I have a feeling that the Minister knows what I am going to ask him about payment by results. If he has done so much piloting and testing and has such confidence in this system, why has he repeatedly refused to tell us what percentage of a contract will be paid regardless of performance, and what percentage the reward element will be? We suspect that it would be very little.

4 pm

Jeremy Wright: The hon. Lady keeps asking the same question and she is going to keep getting the same answer: that is called consistency. Let me tell her once again that she will have to wait until she sees the documentation on the invitation to negotiate. What she will see from it is that we are very interested not just in the initial figure, but in how those bidding for this work will develop the amount they are prepared to put at risk over time. That will assist precisely the type of organisations that Labour Members claim they are interesting in helping—voluntary sector organisations that might not be able to put a great deal at risk to start with, but might be able to build on it in the future. We think that is important, and I very much hope that the hon. Lady will support it.

Let me deal with the Peterborough pilot and what it does. It is worth making the point that the interim figures from the pilot—we have been told often this afternoon that there is no evidence for the changes we are making, so let me offer some up—show an 8% fall in reconvictions among offenders released from Peterborough between September 2010 and June 2012 as compared with the preceding period. Similarly in the Doncaster pilot, the sixth-month reoffending rate fell 5.7 percentage points compared with the preceding period. That clearly demonstrates that with targeted support and help aimed at the right people at the right time, we can divert more offenders from a return to crime.

We have built into our plans a set of our own business and system readiness tests, which will be carried out throughout the implementation process. There are therefore a number of things that we are doing to test these reforms—completely contrary to the characterisation of Opposition Members—and we are determined to implement them in a measured and orderly way to ensure that public safety is in no way impacted. That is why we are taking a structured approach to implementation, as I have set out.

Mr Llwyd: There is no clear read-across from Doncaster and Peterborough because those are voluntary schemes and what the Minister proposes is not voluntary. Those who know better than I do—and, with great respect, as much as he does—will tell him that the figures do not correlate precisely.