Kenneth Clarke marked his return to office as Justice Secretary with a dramatic break from the "prison works" orthodoxy of his predecessors Jack Straw and Michael Howard. In a speech to the Centre for Crime and Justice Studies in London on 30 June, Clarke described prison as "costly and ineffectual" and called for a "rehabilitation revolution".

Many workers in the criminal justice system fear that behind the reformist zeal lurk questionable motives; that the "rehabilitation revolution" is driven by expediency rather than principle, a rhetorical distraction while the coalition government makes backroom deals with private investors.

Steve Gillan, who took over from Brian Caton as general secretary of the prison officers' union POA in May, tells me that the redistribution of work to the private and third sectors is the biggest concern for his 35,000-plus members. For him, the espousal of community sentences is simply about cutting costs.

His concerns are echoed by Jonathan Ledger, the general secretary of Napo, which represents 9,500 probation officers and family court staff. Unlike the POA, Napo supports a reduction in short-term custodial sentences, but it shares misgivings about Clarke's "revolution", namely the roll-out of payment by results and social impact bonds, which promise investors financial returns for cost-saving improvements such as reduced reoffending rates. Ledger dismisses these as "soundbites rather than fully formed ideas".

While the economic conditions being used to justify an overhaul of the system may be new, the debate over its priva­tisation is familiar. The involvement of private companies in the building and management of prisons was first introduced in the UK under the Tories in the early 1990s. In 1997, Jack Straw described this free-market invasion as "morally repugnant". Yet the Labour government pursued the policy and today Britain has 11 private prisons (in Scotland, the SNP has not allowed any further development on top of the two already built).

“Labour promised us in opposition that they would remove the private prisons, but they didn't," Gillan says, insisting that "private companies making profit out of incarceration" is as unacceptable now as it was then.

That isn't the only way New Labour is seen to have failed the prison and probation services. Tony Blair's pledge to be "tough on crime, tough on the causes of crime" in practice focused too much on the former and not enough on the latter. In 1997, the prison population in England and Wales was just over 60,000; in April this year, it hit a record of 85,000.

Exactly how Clarke plans to tackle this will become clearer with the release of a green paper from the Ministry of Justice this autumn. The ministry's director general of finance, Ann Beasley, revealed in a letter to senior colleagues in August that there are plans to cut £2bn from the £9bn budget over the next three to four years. For the probation services, this is expected to mean cuts of around 25 per cent, far higher than was anticipated by Ledger. He argues that such cuts are "completely untenable", and says that fighting them is an "absolute priority" for his union.
Central to that campaign will be the demand for separate prison and probation services following the attempted merger of the two through the National Offender Management Service. Ledger believes the experiment has failed, calling it a "takeover" of the probation service rather than a merger. "Our background is social care, belief in rehabilitation," he says. "The prison service military background obviously needs a much clearer, firmer hierarchy. That's not a criticism; it just reflects the job they have to do."

Their differences present the POA and Napo with distinct challenges, but the two are united in being ready for action. Neither union is affiliated to Labour, but both Gillan and Ledger suggest Ed Miliband is the candidate they personally believe will return the party closest to its roots and "traditional values" at the same time as being able to win an election. Meanwhile, neither general secretary rules out a return of the unrest that was experienced under Thatcher. There is, in Ledger's words, a "significant risk", which would "force the coalition to show its true colours".