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The Operational Performance of PFI Prisons

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.

"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

Notes for Editors


  1. The Prison Service, an executive agency of the Home Office, is responsible for holding those remanded or sentenced to custody by the courts in England and Wales. Custodial services are provided in 137 prisons. The Prison Service became an Agency in 1993, and until recently, it contracted out the management of custodial facilities under powers conferred on the Home Secretary by the Criminal Justice Act 1991. In March 2003, this function was transferred to the Commissioner for Prison Service, a Permanent Secretary in the Home Office.
  2. The prison population in England and Wales has increased by 36 per cent since January 1996, when the Prison Service let the first PFI prison contract. The seven operational PFI prisons (Altcourse, Ashfield, Dovegate, Forest Bank, Lowdham Grange, Parc, and Ryehill) now account for about five per cent of the prison estate and hold 5,000 prisoners (around 7% of the total prison population). There are four private sector contractors: Group 4, Securicor, UKDS and Premier. Two further PFI prisons (Ashford and Peterborough) are due to be built (by UKDS).
  3. Press notices and reports are available from the date of publication on the NAO website at Hard copies can be obtained from The Stationery Office on 0845 702 3474.
  4. The Comptroller and Auditor General, Sir John Bourn, is the head of the National Audit Office which employs some 800 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.

PN: 47/03