Private Finance

The Operational Performance of PFI Prisons

“The experience of the prison sector shows that the use of the PFI is neither a guarantee of success nor the cause of inevitable failure. Like other methods of providing public services, there are successes and failures and they cannot be ascribed to a single factor. PFI has brought some results which are encouraging and some which are disappointing. But what is clear is that competition has helped to drive up standards and improve efficiency across the prison system as a whole.”

Report cover image showing prison interiors

"The experience of the prison sector shows that the use of the PFI is neither a guarantee of success nor the cause of inevitable failure. Like other methods of providing public services, there are successes and failures and they cannot be ascribed to a single factor. PFI has brought some results which are encouraging and some which are disappointing. But what is clear is that competition has helped to drive up standards and improve efficiency across the prison system as a whole."

Sir John Bourn, 18 June 2003


Sir John Bourn, head of the National Audit Office, reported to Parliament today that the seven operational PFI prisons are bringing benefits to the Prison Service.

One of the key benefits is that the existence of PFI prisons has encouraged the public sector to improve its performance. For instance, Prison Service management teams have recently won competitions with the private sector for the operation of prisons. Furthermore, better staff-prisoner relationships in privately managed prisons have helped the drive to improve decency in publicly managed prisons.

The best PFI prisons (Parc and Altcourse) performed as well as the best public prisons (Lancaster Farms and Swansea) while the worst PFI prison (Ashfield Young Offenders Institution) has been among the worst in the prison estate. PFI prisons tend to perform better than public prisons in areas related to decency and the activities of prisoners, but less well in areas such as safety and security.

The performance of PFI prisons against their individual contracts has been mixed. With the exception of Forest Bank, all of the PFI prisons have incurred financial deductions from contractual payments for poor performance. These deductions tend to be highest in the first year of operation and then reduce over subsequent years. However, in Ashfield’s case these deductions have increased over time. The problems at Ashfield culminated in the Prison Service taking control of the prison for five months in 2002. It has since returned Ashfield to Premier, although the prison is currently operating at only 50% of its capacity.


Publication details:

ISBN: 0102921725 [Buy from TSO]

HC: 700 2002-2003

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