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The political genealogy of privatization

The state has rarely operated a complete monopoly in the delivery of penal services in modern Western democracies, and private providers have therefore never been wholly excluded from the business of inflicting punishment. To acknowledge this, however, is not to deny there has been a renewed interest in encouraging private operators to deliver more penal services in North America, Europe and Australia since the late 1980s. This new interest was partly driven by the rise of the new Right which sought to reduce the role of government across a whole range of activities, encouraging private companies rather than the state to finance, build and manage not only new prisons but also new hospitals and new schools.

The argument was that private involvement would enable governments to reduce the overall burden of public taxation, leaving it to the private sector to provide these key services, preferably in direct competition with public service providers, which would further help to reduce costs. The fact that some private operators would make a profit from their operations was not considered to be a problem. Indeed, the ‘profit motive’ was thought to provide the necessary incentive to secure high-quality services.

Forms of privatization

There is no single model of privatization. In some countries (e.g. France and, on a smaller scale, Germany), the state still finances, builds and owns prisons but has handed out the management of some facilities to the private sector. In Britain, the USA and in some Australian states, on the other hand, private operators have in some cases taken over the whole burden of financing as well as building and managing new prisons. The advantage this has for the state is that, during the current period of tight fiscal discipline, it can keep the immediate capital cost of building new prisons off its balance sheet. This cost is initially borne by the private contractor, who then claws it back by entering into a long-term contract, lasting for up to 25 years, with the state which guarantees to send its prisoners there at a negotiated per diem cost.

The operation of such contracts is monitored, and companies have been fined for not meeting their contractual conditions (e.g. for not providing adequate educational provision for inmates). Private contractors have sometimes lost entire contracts, and several private institutions have been returned to the public sector. In most cases, on-site government monitors are responsible for overseeing the contracts, offering the state another lever of accountability. Attempts to compare the overall performance of these private prisons with state-run prisons – which still constitute the vast majority of prisons in all the countries mentioned – are as frequent as they are contentious.

Ancillary services, such as prisoner escort services, have also been put out to private tender. In the UK, for example, the transfer of all prisoners between prisons, and between prisons and the courts, is undertaken by private companies. Other UK companies have contracted to provide prison food; still others are responsible for the electronic monitoring of offenders released from prison into the community.

At the shallow end of the penal system, the government has also encouraged the involvement of private, non-governmental agencies in helping to provide community supervisions. Guidelines governing how these services are to be competitively tendered, to ensure ‘value is added’, have been drawn up by government for use in the newly formed National Offender Management Service (NOMS). While efficiency gains are paramount, the encouragement of non-governmental agencies at this end of the system is also driven by the acknowledgement by governments that managing offenders in the community cannot just be left to state but is the responsibility of all civic groups.

Critics of privatization

There has been some criticism of private sector involvement at the shallow end of the system. It is argued, for example, that through new public management techniques the state now exerts more control over the emerging disaggregated, semi-private (or mixed) penal system than ever before; that both hard-working voluntary and for-profit organizations are being constrained by rigid national standards and over-optimistic performance targets.

However, it has been the decision to hand over prisons for profit to private companies in North America, Europe and Australia that has prompted the most controversy. Some critics of private prisons argue that they are morally repugnant. The argument is that, while all societies have rules, and those who break those rules must be punished, it is morally wrong to make those who deliver this pain on our behalf ever richer according to the quantum of pain they deliver. A contingent moral argument is that private operators will lobby for more prisons, thus delivering more pain by promoting the expansion of the deep end of the penal system.

On a more practical level, critics claim that the idea of private prisons was sold by the new right on the untested assertion that they would reform offenders more effectively than state-run prisons, where recidivist rates have historically been notoriously high. On the matter of costs, the arguments are more complicated. For example, critics argue that, where operating costs appear to make savings for government, it is almost entirely down to reducing staff costs. The claim is that, routinely, fewer guards are employed in private prisons and that those who are employed have poor conditions of employment and less job security. For these reasons there is much trade union opposition to private prisons. Claims of financial manipulation have also been levelled at one private sector company in the UK that successfully renegotiated its insurance liabilities on one of its prison operations without passing these savings to government.

Advocates of privatization

Proponents of private prisons rebut most of these arguments. They claim that some of the objections are ideologically motivated, emanating from left-wing critics who remain committed to an over-centralized, high-spending nanny state. They claim that private contractors have always been involved in delivering punishment as builders of prisons, and that during periods of prison expansion they have increased their profits. What is new in principle, or morally questionable, about contracting out? As for the claim that, if they were to manage prisons, private contractors would inevitably put their legal duty to maximize profits before the interests of prisoners by cutting corners, this is surely something that would quickly be spotted by external audit, or by on-site monitors? Indeed, rather than cutting corners, efficient, cost-conscious private operators argue that their practices will force up management standards in the public sector.

As to the fear that private operators might drive up the prison population by demanding longer prison sentences, they ask for the evidence, pointing out that the factors involved in rising prison rates are very complex, often reflecting wider social and political insecurities over which they have little control. True, private companies make no secret of the fact they have lobbied for the chance to finance, build and manage the new prisons that both politicians and public are demanding. But supporters would say: what is wrong with that, not least if it helps to reduce evident and widespread overcrowding that prison reformers take such exception to?

Where we are now

While the introduction of private prisons has been a striking innovation, their spread has been less spectacular than their advocates anticipated. For example, the private sector’s forecast in 1996 that it was on course to be managing 25 per cent of all UK prisons looks optimistic. Furthermore, although privatization has gathered momentum in individual American states, the dramatic rise in the prison population has meant that the overall proportion of American offenders held in privately owned or managed facilities is still very modest.

Critics of privatization find no difficulty in explaining this limited progress. They argue that private prisons have yet to demonstrate that they can either discipline or reform prisoners any more effectively than state-run prisons and that, relatedly, there is no reliable evidence that their competitive challenge has forced the public sector prisons significantly to raise their performance. Critics further argue that short-term operational cost savings, even where they can be demonstrated, need to be set against the fact that using such mechanisms as the Public Sector Finance Initiative (PFI), which enables the private sector to pick up the initial capital cost of building new prisons, only encourages governments to build more, which in the end the government still has to pay for through taxation.

The privatization of penal services mirrors a major reconfiguration of other branches of the criminal justice system – for example, policing, where a whole range of duties once regarded as traditional policing functions are now being ‘hived off’ to the private sector. However, this process has met resistance from professionals and others who argue that, in sensitive areas of social regulation such as policing and punishment where the state sanctions the use of ‘legitimate force’ the use of private operators, if not objectionable in principle, at least requires robust scrutiny.

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