The Shadow State: probation chiefs voice doubts about outsourcing

Payment by results might work, but not the way this government is doing it, writes Alan White.

The Daily Mail carried an excoriating attack on the probation service last month under the headline "Nearly 50,000 criminals spared jail offend again within a year: MPs claim 'shocking' figures show failure by probation officers". Priti Patel MP was quoted:

"There is clearly a problem with the probation service which is not working well to deal with this issue".

The story was based on the Ministry of Justice's quarterly reoffending statistics. The only problem was that this short-term picture didn't show reoffending has in fact slightly decreased, every year, since 2000. And the figures included criminals who had received sentences under 12 months, for whom the probation service has no statutory responsibility.

Did the briefing for this story come from the opposition? Surely not: Patel is a Tory. One couldn't help but notice these lines:

"Justice Secretary Chris Grayling is set to announce within weeks that charities and businesses will be brought in to tackle entrenched reoffending as part of the ‘rehabilitation revolution’. Yesterday he said the majority of probation work would be outsourced."

Yes, the Government is laying the ground for another outsourcing "revolution". Grayling was, of course, the man who initiated the Department for Work and Pension's Work Programme, which operates on Payment by Results (PbR) lines. There's been much made of the Work Programme's failings: perhaps most relevant is the argument that it was simply wheeled out too quickly in comparison with Labour's New Deal.

I'm bemused after asking Mark Ormerod, Chief Executive of the Probation Association, about this latest initiative. What's the next step in the process? "Well," he replies, "a Government announcement would be helpful. We've been waiting for a response to the consultation since June. It's not even clear who's supposed to implement what, but we know it's supposed to happen in 2014/5. We're not opposed to the idea of PbR, but it doesn't seem very far away and the only way we can see it happening is some kind of central contracting process but that cuts across a tremendous amount of work that's being done at a local level."

And there's another reason it may play out this way: PbR requires contractors to put money on the table themselves at the outset (I've previously written about how this has put small charities out of business). Sebert Cox, Chairman of both the Probation Association and Durham Tees Valley Probation Trust, tells me it's likely to put off smaller charities: "We're lead to believe, by ministers and officials, that they want voluntary organisations to be an integral part of delivery. What I can tell you from a local perspective is that there'll be few small voluntary organisations that could become involved. They don't have the money – they're squeezed because of the climate in which we live. One has to be sceptical about who'll be coming forward to do this." Despite claims that the Work Programme won't be the model, it seems inevitable the likes of G4S and Serco will once again step into the vacuum.

Various sources have given a vague idea of how the changes will be implemented – it appears as if the outsourced work will be targeted on those serving 12 months or fewer; giving them mentors to make sure they have homes, are signed up to drug-treatment programmes and are generally supervised as they make their way in the outside world. But it seems odd that those with a serious stake in how the changes are enacted know little more than these basic details.

"There were some proposals put in the consultation paper, but how it'll mesh together isn't clear," says Ormerod. "We have concerns about the splitting of offender management and with the Probation Chiefs' Association we put in a joint response to the consultation paper, saying if you have different organisations responsible for it you lose accountability and transparency. You have that potential situation where various organisations look at each other and say 'I thought you were responsible for that' or 'That's not in our contract.'"

Savas Hadjipavlou, Business Director of the Probation Chiefs Association, expands on this: "If you compare probation work with other areas that have been outsourced, it tends to work where the business is transactional and clearly defined – things like civil service pensions. If you look at probation work it involves the courts, the police, local mental health services, drug addiction workers, local authorities – half a dozen agencies at least have to come together. We're talking about behavioural change and monitoring: the idea it can be easily mapped into a simple PbR model is rather difficult to understand."

He sees the probation officer's primary role as pulling together the contributions of these other agencies. "You have to preserve that, as against the purity of the PbR model which says you're not interested in the contents of what's done, you're only going to pay for the result. We've been looking at how you assess risk and it's a volatile process. It's not a precise science. High risk people can be low risk if they're taking their medication, if they've got mental health problems that are managed and so forth – that takes us back to measuring success. All those who go into prison with a Class A drug problem, for example, have a reoffending rate of 90 per cent. Government aggregates large groups and looks at the average but no sensible way of looking at success would do it by that measure."

For Ormerod this leads to a central question – how can you pay by results, when the results are so hard to measure? "With the Work Programme, getting someone in a job stops benefits being paid so you get an immediate cash reward. The immediate aim with this is to close prisons because you've got reoffending down, but that's a very protracted cycle. We're talking about making a long term behavioural change – there's no point saying we'll pay you after a week. It's a far more inchoate environment in terms of working out whether success has been achieved and then saying we can pay you something." And this begs the question of whether the programme will end up being PbR in name only, in fact tending closer to a conventional outsourcing project; thus negating the transparency the Government hopes to introduce.

Like many public service leaders, none of the people to whom I spoke had an issue with the fundamental idea of PbR. But when it's being introduced in such a chaotic and seemingly rushed fashion, they can hardly be forgiven for wondering if ideology is trumping pragmatism.

Chris Grayling arrives at the Guildhall to attend The Lord Mayor's Banquet. Photograph: Getty Images

Alan White's work has appeared in the Observer, Times, Private Eye, The National and the TLS. As John Heale, he is the author of One Blood: Inside Britain's Gang Culture.

Photo: Getty Images
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How can Britain become a nation of homeowners?

David Cameron must unlock the spirit of his postwar predecessors to get the housing market back on track. 

In the 1955 election, Anthony Eden described turning Britain into a “property-owning democracy” as his – and by extension, the Conservative Party’s – overarching mission.

60 years later, what’s changed? Then, as now, an Old Etonian sits in Downing Street. Then, as now, Labour are badly riven between left and right, with their last stay in government widely believed – by their activists at least – to have been a disappointment. Then as now, few commentators seriously believe the Tories will be out of power any time soon.

But as for a property-owning democracy? That’s going less well.

When Eden won in 1955, around a third of people owned their own homes. By the time the Conservative government gave way to Harold Wilson in 1964, 42 per cent of households were owner-occupiers.

That kicked off a long period – from the mid-50s right until the fall of the Berlin Wall – in which home ownership increased, before staying roughly flat at 70 per cent of the population from 1991 to 2001.

But over the course of the next decade, for the first time in over a hundred years, the proportion of owner-occupiers went to into reverse. Just 64 percent of households were owner-occupier in 2011. No-one seriously believes that number will have gone anywhere other than down by the time of the next census in 2021. Most troublingly, in London – which, for the most part, gives us a fairly accurate idea of what the demographics of Britain as a whole will be in 30 years’ time – more than half of households are now renters.

What’s gone wrong?

In short, property prices have shot out of reach of increasing numbers of people. The British housing market increasingly gets a failing grade at “Social Contract 101”: could someone, without a backstop of parental or family capital, entering the workforce today, working full-time, seriously hope to retire in 50 years in their own home with their mortgage paid off?

It’s useful to compare and contrast the policy levers of those two Old Etonians, Eden and Cameron. Cameron, so far, has favoured demand-side solutions: Help to Buy and the new Help to Buy ISA.

To take the second, newer of those two policy innovations first: the Help to Buy ISA. Does it work?

Well, if you are a pre-existing saver – you can’t use the Help to Buy ISA for another tax year. And you have to stop putting money into any existing ISAs. So anyone putting a little aside at the moment – not going to feel the benefit of a Help to Buy ISA.

And anyone solely reliant on a Help to Buy ISA – the most you can benefit from, if you are single, it is an extra three grand from the government. This is not going to shift any houses any time soon.

What it is is a bung for the only working-age demographic to have done well out of the Coalition: dual-earner couples with no children earning above average income.

What about Help to Buy itself? At the margins, Help to Buy is helping some people achieve completions – while driving up the big disincentive to home ownership in the shape of prices – and creating sub-prime style risks for the taxpayer in future.

Eden, in contrast, preferred supply-side policies: his government, like every peacetime government from Baldwin until Thatcher’s it was a housebuilding government.

Why are house prices so high? Because there aren’t enough of them. The sector is over-regulated, underprovided, there isn’t enough housing either for social lets or for buyers. And until today’s Conservatives rediscover the spirit of Eden, that is unlikely to change.

I was at a Conservative party fringe (I was on the far left, both in terms of seating and politics).This is what I said, minus the ums, the ahs, and the moment my screensaver kicked in.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.