Public Accounts Committee
Oral evidence: Transforming Rehabilitation: progress review, HC 1747
Wednesday 13 March 2019
Ordered by the House of Commons to be published on 13 March 2019.
Members present: Meg Hillier (Chair); Sir Geoffrey Clifton-Brown; Chris Evans; Caroline Flint; Shabana Mahmood; Nigel Mills; Bridget Phillipson; Lee Rowley; Gareth Snell; Anne-Marie Trevelyan.
Sir Amyas Morse, Comptroller and Auditor General, Adrian Jenner, Director of Parliamentary Relations, National Audit Office, Oliver Lodge, Director, NAO, and Marius Gallaher, Alternate Treasury Officer of Accounts, HM Treasury, were in attendance.
Questions 1-150
Witnesses
I: Sir Richard Heaton, Permanent Secretary, Ministry of Justice, and Michael Spurr, Chief Executive Officer, HM Prisons and Probation Service, Ministry of Justice.
Report by the Comptroller and Auditor General
Transforming Rehabilitation: Progress review (HC 1986)
Witnesses: Sir Richard Heaton and Michael Spurr.
Q1 Chair: Good afternoon and welcome to the Public Accounts Committee on Wednesday 13 March 2019. We are here to question the Ministry of Justice about its Transforming Rehabilitation programme, on the back of a progress review Report from the National Audit Office. We have looked at this matter before; obviously, there have been a number of changes and an announcement that Ministers made recently, which we will touch on. We are keen to get to grips with what has happened and what lessons have been learned for the future.
I would like to ask the permanent secretary a little about the Courts and Tribunals Service before we kick off the main session. Our witnesses are Sir Richard Heaton, the permanent secretary at the Ministry of Justice, and Michael Spurr, the chief executive officer of Her Majesty’s Prison and Probation Service at the Ministry of Justice. Mr Spurr has served for 35 years in the civil service, and nine years in this role. We understand you are on the move.
Michael Spurr: I shall depart at the end of this month: 29 March—an important day.
Q2 Chair: Today is a sensitive day to try to crack a joke about 29 March. I don’t think any of us is in the mood for that. Thank you for your service to the Prison Service and the country. That is the nice bit, Mr Spurr. We will then get into the questions, as usual.
I want to touch on the letter from your Minister, Lucy Frazer, about the delay to the court reforms, which are now being pushed back to a year later, so they will not be complete until 2023. You know that, as a Committee, we would rather things were done better than done badly in a hurry, but we are also concerned about the potential impacts and costs. Can you give us any indication of what you thought about when making this decision?
Sir Richard Heaton: The court reform programme started life as a heroically ambitious four-year programme. About a year in, everyone recognised that that was heroically ambitious—it was an artificial timescale set by the spending round. It was extended to a six-year programme. We have come to the view, with the Treasury and the Cabinet Office, which looked at the programmes with us, that seven years is realistic. As you say, Chair, one of the lessons from Transforming Rehabilitation is that heroic timetables are best departed from.
Q3 Chair: Heroic is the new word for an impossible timetable, is it?
Sir Richard Heaton: If six years was undeliverable, it is best to recognise that early and replan when necessary. It is not an egregious or embarrassing slippage; it is just sensible replanning.
Q4 Chair: Is there a cost to the delay?
Sir Richard Heaton: There probably is, but I could not put my finger on it. I might be able to say so during the hearing.
Q5 Chair: If you cannot during the hearing, you can write to us with the outline of the cost, and the knock-on effects of the things we are discussing on those who are going through the system, if there are problems as a result of the delay. Can you highlight any issues of concern for you at this point?
Sir Richard Heaton: I would rather get my lines right and write to you.
Chair: On this occasion yes, because we have quite a lot to get through in the main session. We want to move on to Transforming Rehabilitation.
Q6 Caroline Flint: The Justice Secretary recently announced his vision for a smart justice system. How does that differ from Transforming Rehabilitation, and when can we expect to get details of the smart justice system?
Sir Richard Heaton: The Secretary of State will flesh out those ideas later in the year, although I cannot give you a precise date. How do they differ from Transforming Rehabilitation? Part of the theme of this session will be that we have learned an awful lot from Transforming Rehabilitation, which was an ambitious programme that revolutionised the delivery of probation in England and Wales and contained some inherent risks, many of which have materialised. Some of them have not—we managed to mitigate some of them successfully—but Transforming Rehabilitation carried in it some really significant delivery risks, which we have spent the last four years dealing with, managing and mitigating.
The Secretary of State wants to return to a world where people who are passionate about probation can get on and deliver decent probation services and are not caught up in the extremely difficult and complicated landscape that characterises the current Transforming Rehabilitation project.
Q7 Caroline Flint: Just in terms of when we will hear more details, is that going to be in the second half of this year or the first half?
Sir Richard Heaton: I would hope it is the second half of the first half—early summer is what I would hope. You must not hold me to that, because it will be a ministerial decision and announcement, but that is what we are hoping for.
Q8 Caroline Flint: Okay. Let’s get on to Transforming Rehabilitation. That hasn’t happened as promised, has it?
Sir Richard Heaton: As I say, there are lots of things that have not gone as were originally imagined. Just before we get on to that, there are elements of the programme that have been successful. I would say the performance of the National Probation Service has on the whole been good and sometimes very good. Some of the bits we thought would be problematic have not been problematic. The engagement between the National Probation Service and the community rehabilitation companies has, on the whole, been better than we feared. The cohesion and national integration and relationship with the criminal justice bodies has been better than it was under the probation trusts landscape, and 40,000 people—the short-sentence offenders—have come under supervision for the first time. So there are things that have been delivered according to plan and according to the vision, but you are right that not everything has gone according to plan. I can give you my list or we can—
Q9 Caroline Flint: Why don’t we pick it up in questions? There are three of us with a number of questions to ask. Just to get into some of the promises about what would be provided by this new way of looking at probation, it was expected that innovation would come hand in hand with the use of CRCs and others involved in this process, some in the private sector and some in the charitable sector. The Report’s findings indicate that that innovation has not happened in the way it was thought it would. Why is that?
Sir Richard Heaton: I think the major reason for that, which is at the root of lots of things that have happened—Mr Spurr might want to come in on this, and you examined it last time we talked about this subject—is that the contracts did not deliver the volumes and therefore the income that the companies were expecting. Therefore, there was not the money available to invest in innovation that they had hoped. That is one reason—it is to do with the volumes and the cost structure.
The other reason, possibly, was an optimism bias at the time. At the time Transforming Rehabilitation happened, everyone was very excited about the pilots that had happened in Doncaster and Peterborough, and it was thought that if only you incentivised companies to do great things on reoffending, they would get on and surprise us all and do great things. Contained in that projection was what now looks to be optimism bias, if I am honest.
Q10 Caroline Flint: Just to push a bit further on innovation, innovation could be smarter information systems—IT—so that information about people’s offending gets from one place to another quicker than it has ever done in the past and people can do their jobs better. Innovation could be about new players—providers—coming into this arena. For example, one idea was that even if you had the CRCs, more people from the third sector—the charity sector—would play more of a role, but that has not materialised either. Are those cash problems or framework structure problems in the way the contracts were done?
Sir Richard Heaton: I think there is a framework structure problem, but some of that innovation has happened. Correct me if I have got the numbers wrong, but I think there are 94 charitable organisations—voluntary organisations—directly involved in the delivery of probation services, and something like 800 whose services are signposted by CRCs or the NPS. There is some involvement.
Q11 Caroline Flint: It is patchy, though. Would you agree?
Sir Richard Heaton: Yes, it is patchy—exactly. By and large, the large charities are involved. The disappointment has, on the whole, been at the smaller end of the market.
Q12 Caroline Flint: Why do you think that is? Why do those smaller charities not feel they can get an in into this arena?
Sir Richard Heaton: Can you help me on this, Michael?
Michael Spurr: There are two things. You are absolutely right that there has been much less innovation than was hoped for, and it is absolutely the case that there has not been as much engagement by the third sector—the social sector—as was planned.
To give some context, the NAO Report talks about 159 voluntary sector organisations involved—11% of the total number involved in the whole sector. In context, probation trusts spent less than 3% of their budget on voluntary and third-sector provision. There has been a significant increase, but nothing like what was anticipated. The reason it has been more difficult for the smaller providers—we spent an awful lot of time trying to encourage and manipulate supply chains to use smaller providers—is that the reality is that many of the private-sector providers partnered with larger voluntary sector or not-for-profit organisations. They generally wanted to deliver the services themselves because in efficiency terms it was easier for that to be done.
The risk element was a worry for many of the smaller charities involved in it. Then, because the money that had been anticipated early on was not available because of volumes and case mix, the providers squeezed their supply chains to some degree, and that did not provide the opportunity for some of the smaller, bespoke charities, which we would have wanted to see involved, to get involved.
Q13 Caroline Flint: One of the main objectives of this new system was to try to prevent reoffending. While the figures tell us that by March 2017, midway through the reforms, there was an overall 2.5 percentage point reduction in the proportion of proven reoffenders since 2011, there has been a massive increase in those who are reoffending doing so many times.
Sir Richard Heaton: There has been some success, but some warning about whether measuring reoffending is really the best way to measure the performance of providers. We set a target that over the life of the contracts the binary rate—the first one you mentioned, the number of people reoffending—would reduce by 3.7 percentage points, and it is now on something like 2 to 2.3 percentage points. That is partial good news, but there is a feeling now that reoffending is too random or arbitrary a rate to hold CRCs to, because it is affected by so many different factors. I claim some success in that the number has come down by 2 or 2.5 percentage points, but in reality I don’t think it is a true measure of a CRC’s performance.
We see that very markedly on the frequency rate—the second rate. It is true that the number of offences per offender has gone up considerably. That is partly because of case mix; there has been a smaller volume and the people who are coming through the courts tend to be the more recidivist offenders; therefore the frequency rate has gone up. It would be wrong to lay that at the door of CRCs, because it is about case mix and it is a trend that was already visible before the CRCs took over, which is why we have re-baselined it in the recent contract changes. The reoffending rate gives us a clue that things are not going as well as we had hoped, but it is not a complete picture of performance.
Q14 Caroline Flint: If measuring in terms of reoffending is too random, why was it used in the first place?
Sir Richard Heaton: Random is the wrong word.
Caroline Flint: Why did they use it, and what do you know now? What other measurement would you use now?
Sir Richard Heaton: I will answer the second bit first: measures such as success in getting an offender into housing or on to universal credit, success with employment, success with mental health programmes—those are proxies, but they are closer to what the CRC has within its power.
Caroline Flint: I totally understand—
Q15 Chair: Can we bring in Mr Spurr? I think he wanted to come in on this, and that might be quite useful.
Michael Spurr: I just want to give some context. One of the main aims of this reform was to use a payment-by-results mechanism to drive innovation. In measuring results, the reoffending rate was chosen because that was what we wanted to achieve. The binary rate is relatively straightforward: do you have fewer people committing offences? That has been reduced.
At the time, the view was that we should also take account of the number of offences, primarily because we know that reoffending is like any form of addiction—often people stop over time; they do not just stop immediately. There was a fear, learning from things that happened with the DWP, for example, that if you just had a binary rate—“Yes or no, this person has reoffended or not”—you would have too much cherry-picking and no work would be done with people who immediately reoffended because we would then give up on them. So the frequency measure was included. Virtually everyone at the time, myself included, thought that that was the right thing to do.
There is a lag in data, so when we were thinking this through we were not aware of the data from 2011 onwards, and prior to that the frequency rate had been going down. Since then, it has been going up. We do not quite understand that, but we think, as Sir Richard says, that some of it is about the nature of people coming into the system. Some of it is about the good work at the time by the police and the probation service on intensive integrated offender management, where we effectively targeted prolific offenders and so on, and the frequency rate was going up.
Two things we have learned, which come out in the NAO Report, are that a payment-by-results mechanism on reoffending, with such time lags, is not a good mechanism for driving improvement, and that other factors significantly play into reoffending, and particularly into that frequency rate. That particularly includes police behaviour, which we were not able to control for sufficiently in where the CRCs were.
Finally, it is important for context to say that we largely spend on probation today what we were spending 10 years ago, in cash terms, but we have a larger and more complex caseload. As is set out in the NAO Report, there were 17,000 fewer reoffenders between 2011 and 2017 and about 33,800 fewer “reoffences”. In absolute terms, reoffending has reduced, but by nothing like what we were hoping to achieve.
Q16 Caroline Flint: I accept what you say about those figures, but the report also outlines in paragraph 7 that “just six of the 21 CRCs achieved statistically significant reductions in the proportion of reoffenders in all offender cohorts”. Again, the performance rate is very patchy.
Michael Spurr: Absolutely, I accept that. I was trying to put that in context. I agree with the NAO Report. This programme has not achieved what we wanted it to. However, it is important to have some context. It is the case that, in absolute terms, there are fewer reoffenders and “reoffences” than before we started this in 2011, as the Report sets out, but it is nothing like what we wanted to achieve.
Q17 Caroline Flint: Sir Richard, you pointed to the idea that problems with housing and other services not being available to people are contributing to their getting into crime again and reoffending. Do you think that this is another example of the pretty poor track record of procuring and managing the sort of outsourced services that are needed to provide for those needs and to avoid reoffending?
Sir Richard Heaton: If the question is about the procurement and management of these CRC services, I think my Department procured and implemented this programme well. The issues we have talked about were inherent risks and design features of the policy. I will be quite defensive: I do not think that there was a flaw in the way in which we managed and implemented these contracts. On the contrary, in the two or three years since we started talking about this subject, the degree of commercial expertise and nous that has been brought to bear on these really complicated contracts—keeping them afloat, providing stability and then a managed termination—has been first-class Government commercial work. I do not think I have anything to apologise for there. The flaws were at inception.
Q18 Chair: Which is convenient because, time-wise, you were not there at the inception, but you were there for the bits that you describe—
Sir Richard Heaton: I’m not saying this to shirk any responsibility; I am happy to speak for the Department. However, we have thought long and hard about how this has not delivered. With my hands up, I cannot say that the commercial capability of the Department is the element at fault here.
Q19 Caroline Flint: There clearly has been a poor understanding by the Ministry of CRCs’ cost base. The original assumption was that 20% of CRCs’ costs were fixed, but in June 2017 that was amended to allow for the average fixed costs reported by CRCs of 77%. Why was a decision to terminate the contracts made so late when the Department knew in 2017 that the contracts were in serious trouble?
Sir Richard Heaton: First, if you’d asked us to terminate the contracts in 2017, I think the honest answer would have been: terminate to what? We couldn’t leave a vacuum in the provision of a crucial public service, and I do not think that we were in a position to step in, nationwide. There really was that question.
Secondly, I do not think that we could have afforded to terminate; the contracts didn’t allow for termination at convenience. That would have been very expensive. The money we injected instead was a better deal for the taxpayer.
Thirdly, we were a couple of years into a major Government outsourcing, and our job was to see it through, which we did. Our job was to recognise the contractual flaws, correct them where we could and, where we had to, to put money in to keep the project going. This was the delivery of a major public service and it was a brand new reform, and our job was not to cut our losses and bail out at the first opportunity.
Q20 Chair: When you say “see it through”, you sound like you are talking about seeing through the outsourcing of the contracts, not the service. Could you clarify what you were seeing through, in your eyes?
Sir Richard Heaton: Our job was to manage the contracts successfully and get the outcomes that we had contracted for.
Q21 Chair: You have just mentioned the outcomes, so it was, in your view, about getting the outcomes, not just managing the contract successfully.
Sir Richard Heaton: Yes, it was.
Michael Spurr: If I may, I will add one point to that. The other key point was that we had not got the outcomes from the frequency payment-by-results mechanism at that point. That made a decisive difference to the profitability of companies, which meant it was clear, when they were out, that the companies were not going to be able to deliver to the level of service that we would have wanted.
When we did the adjustments around the fixed and variable costs, that wasn’t absolutely certain, and I would say that it would not have been possible for us to go to them at that minute. They were waiting for those outcomes. Those were annual figures, so we had not got all of that data. That is why we didn’t look, at that point, to curtail the contracts early.
Q22 Caroline Flint: Isn’t commercial acumen part of the policy design process? Surely that should have been taken into account before the policy launch.
Sir Richard Heaton: Do you mean the fixed and variable issue?
Q23 Chair: No, the whole thing. You were just describing how successful the commercial stuff had been.
Sir Richard Heaton: Had the projects had more time to deliver at the earlier stages—it is not just design; it is about the timetable that the project set itself—had we been given another year, for example, in which to run the National Probation Service and the CRCs in shadow form, we would have spotted the gap between the fixed and variable, which we had failed to spot when we were contractualising. There were elements of this that were done—I don’t want to use headline words—at breakneck speed, if I am honest, and that was probably part of it.
Q24 Caroline Flint: Was there any effort, given those concerns, which must have been felt within the Department, to seek a ministerial direction?
Sir Richard Heaton: No direction was given, otherwise it would have been on the public record. I don’t believe a direction was sought.
Michael Spurr: I was on the programme board at the time, so I can answer some of that.
Q25 Chair: Yes, tell us what happened at the time.
Michael Spurr: A timescale was set to deliver these reforms by 2015. There was a rationale for that, which was about taking the market with us, and the market believing that the reforms were going to be delivered. I guess—let’s be frank about it—politically, with a potential election that year, it was about clarity for the market that these reforms were going to go ahead, and we were going to invest a lot of money in it.
The aim was, therefore, to deliver the programme prior to the election. There is no question about that. As the NAO Report said, primarily we did deliver to that timescale and we implemented the changes, even at that breakneck pace, pretty well, given all of those issues.
I would have liked a longer period running the CRCs under public ownership so that we could understand the cost base much better than we did. But we did engage with the market and we engaged with probation trusts. Our view was that we had enough evidence to be able to proceed at that point, and that those risks could be managed. We were wrong about that. In reality it should have taken longer. We did go too fast, I agree, but that was the rationale at the time. The risks were identified.
Q26 Caroline Flint: And was concern voiced about the breakneck speed?
Michael Spurr: Yes, it was clearly a risk at the time. In terms of the programme planning, this was a major change and transformation and, of course, those issues were being discussed at programme board level, as we were implementing the changes.
We delivered the actual implementation and the transition well, I think. It is a first-generation set of contracts, so there was over-optimism on the provider side in a whole range of ways and over-optimism, I guess, about what could be achieved by outsourcing in this way. The volume changes, in particular, were not as anticipated.
As we have talked about before, it wasn’t just that community orders were coming down—there had been evidence of that previously—but it was the switch in types of orders. Particularly, one of the key elements of the programme of payment by results was to encourage innovation and give providers as much freedom as possible to deliver that, so there was light specification of what they had to do. We therefore paid less for the orders that were like that—the rehabilitation activity orders that are set out. Those are the ones that increased in number against the ones we would have paid much more money for, such as accredited programmes. That, primarily, had the big impact.
Caroline Flint: It distorted the whole—
Chair: We discussed that when we were at the prison in Doncaster; I remember it very clearly. We acknowledged in our report that the transition was the bit that did go relatively smoothly.
Q27 Caroline Flint: Mr Spurr, can I just come back to the third sector? One of our recommendations has been about more transparency, setting out to the sector the opportunities and what is available. Your Department is not the only one that has had problems with this; DWP has had problems when it looked at engaging the third sector to provide advice for people to get into work and stay in work. Is there transparency now?
Michael Spurr: We have tried very hard; we commissioned Clinks, for example, to look at what the impact of this had been on the third sector, and we are trying to take lessons from that. There is more transparency, and we recognise that in one sense, with all of this, the more risk you transfer—volume risk and cost risk—the harder it is for third-sector, not-for-profit, social-sector organisations to play in. That is a huge lesson out of this programme.
Q28 Sir Geoffrey Clifton-Brown: Sir Richard, I am afraid I cannot let you get away with the statement that this contract was well procured and that it would be, in your words, wrong to blame the commercial department. Paragraph 19 of the NAO Report says, “Although the number of reoffenders has reduced, the average number of reoffences they commit has increased significantly”—the point Ms Flint has been questioning you on—and then it comes out with a damning statement: “Transforming Rehabilitation has achieved poor value for money for the taxpayer.” That is on page 10. In NAO terms, that is about as damning a statement as it can come up with, so how do you justify your statement?
Sir Richard Heaton: I do not dispute the statement in the NAO Report. This programme has not delivered for the taxpayer all the outcomes that the public would expect. The only point I was making was that it would be unfair to characterise this as a botched procurement, because I don’t think that is at the root of the issues we are talking about. I am not saying that this was a successful programme that was well delivered in every respect. This programme has not delivered the outcomes that the taxpayer should have expected from it, and we are trying to explore some of the reasons. I am just saying that it is not a narrow failure to contract. That is the only point I was trying to make, Sir Geoffrey.
Chair: We will pick up on some of the contractual issues a little later.
Q29 Caroline Flint: Let’s go on to through-the-gate services, known as TTG. The NAO Report cites in a number of areas how those services are not providing the necessary transition from prison to the community that people envisaged. In fact, in paragraph 1.19, it says, “The Ministry intended TTG services to be provided to the majority of offenders through resettlement prisons. It estimates that up to 2,961 prisoners did not receive TTG services in 2018. These were offenders released from non-resettlement prisons, predominantly sex offenders and foreign national offenders.” Why have you failed, Mr Spurr, to make TTG services work?
Michael Spurr: I will deal with the narrower point about the 2,000 first and then make a wider point about through the gate. It is true that those prisoners were not in resettlement prisons where the CRCs were working to deliver those specific services, because they were in specialist prisons where we had not got through-the-gate services to that degree. For foreign national prisoners, for example, the aim in those prisons is for those individuals to be deported, but there is a proportion who were not, and that is why that was the case. For sex offenders, it is not true that they did not get practical support for leaving. All sex offenders managed by the National Probation Service are subject to MAPPAs when they go out. They do not get the CRC services, but it is absolutely not the case that sex offenders have not had the support in leaving establishments—it is given primarily through prison and probation services directly. It is true to say that they have not had the additionality of practical support that they could have had from the CRCs. That practical support—
Sir Amyas Morse: I don’t mean to interrupt, but I just want to ask whether they were supposed to have had that.
Michael Spurr: I was just going to go on to that point. Ideally, we had specified for a basic level of resettlement support to all prisoners when they were being released. The plan was originally that we would move prisoners back to resettlement prisons so they would receive that, but we have changed our policy on that. We found that we could not move a lot of sexual offenders back to local prisons to release them, because that was too dangerous for them, so we left them in specialist prisons and put other arrangements in place to support them going out.
On the wider point, the level of through-the-gate support was much less than we had anticipated would be given. The level of practical support given to people in many establishments is much less than we would have wanted. That, again, is because, with the squeeze in funding that we have spoken about before, it is one of the areas where we specified very little. The expectation was that because the companies would be working with the individuals in prison and with them when in the community, they would invest in them in prison to support them coming out into the community and gain their benefit through the payment-by-results model. The lack of funding meant that that didn’t happen. We also had—I have mentioned this before—an unintended consequence: a lot of people received resettlement support from third sector charitable provision, which was there when there was no statutory provision, and a lot of that withdrew, I guess not unreasonably, on the basis that there was now statutory provision and so they put some of that funding elsewhere. So some establishments saw a deterioration in support because the statutory provision came in offering little and they lost some better quality provision that had come at no cost to the public sector when there was no statutory requirement.
Q30 Caroline Flint: Cost has been mentioned a number of times, but what I find difficult to understand is that given your years of service, experience and knowledge, there must be a sense of what works to stop offending, whether that is drug treatment, housing or what have you. There must be examples of good practice—I am absolutely sure there are—from people working in this area. I don’t quite understand why that knowledge wasn’t put together for you to better understand not just the working relationships that are necessary to a good outcome, but the cost of a good outcome, and why that wasn’t much more dominant in the structure of this whole process.
Michael Spurr: I guess because the position was to use a payment-by-results mechanism to drive a different type of innovation. Prior to that, we had done an awful lot of costing what was a good means of delivering improved outcomes from rehabilitation. Frankly, it is complicated; it takes time. You get marginal gains from things like accredited programmes, but it costs quite a lot of money to be able to do that. There was a view, backed up by some of the pilot evidence at Peterborough and Doncaster, for example, that we could use a range of other more personal mentoring engagement and so on with individuals and get the outcomes we wanted. The policy ambition was to free up providers, private and third sector, to do that, but a consequence of that was to not specify, “Do these things.” The view was that having a payment-by-results mechanism would incentivise people to use the things that the evidence base allows you to do. Some of those are quite expensive; in others, the evidence base in this area is to a degree limited, and that level of investment didn’t happen.
Q31 Caroline Flint: But given your experience, knowledge and understanding, and that of those who work in the probation service and those who work in prisons, it sounds like a bit of a gamble to just pitch it out to a market that you were actually trying to create here, with a lot of unknowns. When it comes to staffing, you don’t really have a handle on the number of staff and the types of staff that CRCs are engaging to do the jobs that need to be done with this very challenging and diverse group of individuals. Is that right?
Michael Spurr: We didn’t specify staff levels. It was, again, something that was discussed in the programme, but we didn’t specify certain levels of staffing. Freedom was given to providers to meet the requirements in a range of different ways.
In some senses, you are right. It was a new policy initiative. You describe it as a gamble, but I suppose the counter to that is that the vast majority of the people that this was aimed at—the under-12-month group—were not statutorily receiving any services. As part of the argument and response to that, the debate that was had at the time was: we haven’t been successful. This group reoffend at a rate of about 60%-plus. Trying something different and using a different approach, and bringing in others to challenge what had been the norm in my years of experience, and all that, was a positive thing to do.
Q32 Chair: That was one of the things where you were doing two things at once. You say that it was innovative and new, and everything, but the Work programme had a similar black box approach. There was clearly a policy drive to throw things out, see what happens and pay by results. The Work programme, by the time this was implemented, had been having some problems—the Committee looked at a number of them. Did you have any read across with the DWP? Did you talk to officials there at all?
Michael Spurr: Yes. I believe colleagues involved in the programme directly—I was the senior business owner for the programme, so receiving the programme and advising the programme board in terms of that—
Q33 Chair: You had the conversations, so what did you learn from them?
Michael Spurr: I was not involved directly with those, other than the issues—I was aware of some of them from the programme board, and some of the things were around trying to ensure that we had better arrangements for supply chains, as I have spoken about, which was the case. There were a whole range of things in terms of the contracting and how we would contract. Those discussions were had and fed into the development of the programme.
Sir Richard Heaton: Mr Spurr is too polite to say so, but he was neither the policy designer nor the Minister behind the programme. The black box philosophy, which, exactly as you say, is similar to ones trialled elsewhere, characterises exactly what was going on. That was: “We will not specify how you achieve your outcome. We will pay you if you achieve your outcome. You will therefore be incentivised to go ahead and do whatever it takes to achieve the outcome.” That was the design philosophy, and it did not work in through the gate, because, among other things, there was no money going into through the gate, because the contracts did not provide the volumes, because of the fixed-variable things I have mentioned. Looking back on that sequence of events, it seems obvious that that was going to happen, but the policy design was absolutely not in Mr Spurr’s hands.
Q34 Chair: We hear the clever way that you are describing the separation between ministerial decisions and operational decisions, Sir Richard. We will come back to that.
Sir Richard Heaton: This is a candid hearing.
Chair: Yes, we like the candour.
Q35 Caroline Flint: I want to finish off with a couple of questions. We talked about reoffending, but there has also been a shocking increase in recalls. Page 20 of the NAO Report says that, “Between January 2015 and September 2018, the number of offenders recalled to prison for breaching their licence conditions increased from 4,240 to 6,240”, which is a 47% increase, and that, “Over the same period, the percentage of offenders recalled to prison who had received short sentences of less than 12 months increased from 3% to 36%.” What does that tell you about the effectiveness of probation supervision on those offenders?
Sir Richard Heaton: The major driver behind that large increase is that there were 40,000 people who had not previously been subject to supervision who were subject to supervision for the first time. Therefore, a percentage of those were likely to be recalled just in the normal course of statistics. That was the main driver, although that is not to be complacent about it.
Q36 Caroline Flint: Was that regression factored in?
Sir Richard Heaton: It was absolutely known that the policy of extending supervision to the under-12-months group—
Caroline Flint: The more you looked at people, the more you would find out what they were up to and you would be sending them back.
Sir Richard Heaton: It was known that you would have an increase in recall. That is not to defend every recall decision. The CRCs and the NPS professionally try to get it right, and the Inspectorate of Probation has said that they usually do get it right, but I am not sure that we have post-sentence supervision quite right. As we achieve the next iteration of whatever this looks like, I hope that we will be able to improve on how post-sentence supervision works. That is the major driver for the numbers going up so largely and so alarmingly.
Q37 Caroline Flint: Finally, on workload pressures across the National Probation Service, the high levels of vacancies and temporary staff come up time and time again. In your assessment of how things are working, how much are staff identified as a risk factor for the delivery of the programmes? I want to know—and I would hope it is somewhere in there—that you have a sense that if you do not have a certain level of experience of staff, training of staff and numbers of staff, with the best will in the world, those offenders are not going to get the meaningful time they need for staff to engage with them.
Michael Spurr: I agree with you, and I think it is one of the big learning points. We have now specified a minimum level that we want for the through-the-gate service. We have also specified—and having negotiated it with the providers, our expectation is that they will provide it—484 staff to deliver that. Going forward, I think it is really important to have clarity—while providing some flexibility for doing things differently—about a basic minimum level of expectation of professional standards that you want from your staff. I think that is one of the things that comes out of our learning from this process.
Sir Richard Heaton: The flip-side of the volumes being lower in the CRCs was that volumes were higher in the National Probation Service, which is what exacerbated staff pressures and so on. Again, it is a matter of design constraints.
Q38 Caroline Flint: Reflecting on the earlier question about the CRCs, and the fact that staffing was not in the specification, what do you know today about the composition of staffing in CRCs that you did not know before, to help you get a handle on whether they are staffing-up in the way that you clearly see as being important to the delivery?
Michael Spurr: We know where we are able to specify, which we are very clear on with through-the-gate. On the existing contracts, they still have a significant amount of flexibility. If they are changing their provisions, we can engage with them on that, but staffing is their business and we are responsible for ensuring that they deliver to the requirements of the contract. As we have talked about, the requirements are lightly specified for a whole range of services under the existing contracts, because they were driven by payment by results. We have tightened that in some key areas, face-to-face supervision and through-the-gate being the two main ones.
Q39 Caroline Flint: I apologise if I am misunderstanding you. It may be my fault for not listening as much as I should. You are identifying some of the issues around services that you need and what they need to do, but you are saying that there is flexibility for them on their staffing. Does it cause you any concern that if you have not got a handle on the types of staff they have, whether temporary or full time, there could be another problem emerging—something they are not delivering—that suddenly reveals another hole in the strategy for ensuring that we are getting better outcomes?
Michael Spurr: That is a good point. I apologise if I have not been clear. We are looking at the quality of the services they are providing. The NAO Report sets that out. We do our own audits. We have the inspection outcomes. We challenge what the quality of the delivery is. We are entitled to ask them about that and look at what staffing they have to deliver that. We have challenged that and talked about where we think that is not right. There are contractual mechanisms for dealing with poor delivery. Obviously, we have stepped in because of administration, but we would have stepped in for Working Links because of quality, and those two went together. We do have mechanisms and look at what is happening. My point is that I cannot specify to a provider, “You must have this number of staff,” but I can specify, “You are required to meet this level of performance in the contract.”
Q40 Caroline Flint: There is an overall staff vacancy rate of 11% in the NPS; in London it rises to 20%. What are you doing to address those workload pressures? Are you confident that the public, especially in London, are safe from high-risk offenders when they are so short-staffed?
Michael Spurr: We are recruiting effectively new probation officers in large numbers—around 600 in the last cohort. I had successful recruitment campaigns. It takes up to two years to fully train probation officers, so we have been doing that and I am determined to do it, recognising that we need sufficient qualified probation officers. That 11% vacancy rate includes all vacancies in probation and half of it is operational, so it is not 11% of probation officers—it includes case administrators and a whole range of others.
It does vary; you are right that London, not surprisingly, has the highest rate. It is 4% in the midlands and 20% in London. We do use agency staff. I would rather not use agency staff, but we use them so that we are able to cover and deliver our work. Broadly, both in public protection terms and quality of work, the inspectorate generally has found the NPS to be delivering well. They are strained. We are taking action through the recruitment process to address that.
Q41 Chair: How many probation officers have you lost from the probation service as a result of the changes? Do you keep track?
Michael Spurr: I do not have that figure. The actual attrition rate for probation officers is about 6% in the NPS, which is not an unreasonable level.
Q42 Chair: But with the changes, I know that there were probation officers who chose not to change and others who went to work for the CRCs—I met one in my London area. Whether they will ever go back to the National Probation Service is another matter. What is the average starting pay for a probation officer—let’s say in London, because I’m a London MP, so I can compute it?
Michael Spurr: In London, it is in the mid-£20,000s.
Chair: Which is quite hard to live on in London; pretty much impossible, actually, unless you are living with a family member. Maybe that is part of the reason. Anyway, that is another debate.
Q43 Sir Geoffrey Clifton-Brown: Mr Spurr, you lauded the commercial aspects of these contracts, including payment by results. If I can refer you to—
Michael Spurr: I did what, sorry?
Sir Geoffrey Clifton-Brown: You lauded the commercial aspects of these contracts, in terms of payment by results, which is one of the major aims of these contracts. Paragraph 2.20 on page 35 of the NAO Report says: “The Ministry also did not reconcile its appetite for risk with its commercial approach. There is an inherent tension between the desire to promote innovation and the need to maintain minimum service requirements for statutory probation services to protect the public and deliver courts’ sentences.” How do you reconcile the dichotomy in that particular statement?
Michael Spurr: I am sorry that I did not quite hear you the first time. I did not “laud”, in my view; I explained what the policy desire of payment by results was about. That was absolutely a policy desire—to drive innovation. I was simply stating that that was the case.
I agree with what the NAO Report says about this. One reality and one big learning point is that, in this area—not unreasonably; quite properly—the public, external independent inspection, Parliament and others have expectations when people are overseen by the state.
It was argued initially, as part of this policy, that we were not doing anything with a whole bunch of people who we would then begin to do things with. The very basic argument would be that anything you do will therefore be an additionality, and better. The reality is that, when companies are inspected against what they are doing with that group of people, now that they have the responsibility for them, they are inspected against standards at a level that they were not required to meet. That is a perfectly proper finding from this.
The reality is that, given the nature of the work, standards have to be set, but we did not do so within the payment-by-results mechanism. Much freedom was given to providers to work with these individuals, with the perfectly ambitious and proper aim to try to reduce reoffending. However, when that is looked at, the quality of the work has not been what we would want. The inspectorate and others say that that is not acceptable, and we say that it is not acceptable and therefore that this mechanism is not a good mechanism for working with individuals on probation caseloads.
Q44 Sir Geoffrey Clifton-Brown: We drew attention to this aspect in our 2015 Report. I hear your justification, but hasn’t it taken you rather a long time to come to that conclusion?
Michael Spurr: In one sense, yes, it has, because there is a lag in the data that we get about what the results will look like. That has been one of the big issues. It is a two-year timeframe before we really see the results. We took action within the contracts where we could and worked with CRCs to improve quality. There is some evidence of that happening in, for example, South Yorkshire CRC, which really struggled initially but improved in quality when we worked with it. London CRC has also improved in quality, but it is still not where we want it to be.
In one sense, it is right that it has taken a while for that to become absolutely clear. However, for the reasons I said earlier, some of this was about funding, and some of this was about the fact that if the results were better than we or the companies anticipated, which would have put more funding back into the system. We are spending much less than we anticipated spending with CRCs.
As I said, in cash terms, we are spending about the same amount on probation today as 10 years ago, but there is a bigger cohort of people, so it is not really enough to do the type of work that people expect to be delivered at the standards that people want.
Q45 Sir Geoffrey Clifton-Brown: Just saying that you are spending less than you anticipated spending, when you are not actually reducing the rate of recidivism, is surely not the answer.
The NAO goes on with its criticism in the same paragraph: “The Ministry’s light-touch approach to specifying services in contracts has prevented it from holding CRCs to account when services were failing”. How do you react to that?
Michael Spurr: I agree with it. It has. That is one of the lessons that came out of this.
Sir Richard Heaton: In the recent series of interventions on the termination of contracts, we have rowed back from the black box model and deliberately specified what is supposed to be done on the through-the-gate service, and we have put in extra money to pay for that. You are right, Sir Geoffrey: there is a spectrum between high risk, black box and specification of public safety, and we have moved away from the original contract design in the recent interventions on the contract.
Q46 Chris Evans: Before I begin, I would like to declare an interest. My sister, Cara Chapman, works for Working Links in Cardiff. Sir Richard, I want to pick up on something you said earlier. You said measures like successfully placing offenders in housing is a proxy for better measures. Can you tell me, then, why of the 23 men who were interviewed on the day they were released from Cardiff prison, only 13 had a definite place to stay?
Sir Richard Heaton: I cannot tell you specifically. In an ideal situation, the number would be much, much higher than that. Housing is a responsibility of both the Welsh Government and local authorities. The CRCs can do their part as well. We are trying to make a better join-up between the CRCs and National Probation Service and the statutory and non-statutory housing providers, but from the numbers you have suggested, it is not working as well as it should be in Wales.
Q47 Chris Evans: Am I right in saying that your target is for 90% of released prisoners to have some sort of accommodation? In that, Sir Richard, do you include tents?
Sir Richard Heaton: Sorry?
Chair: Tents.
Michael Spurr: No is the answer. Settled accommodation is what we would generally look at; tents would not be settled accommodation. And I don’t think it is quite as high as 90%.
Q48 Chris Evans: Mr Spurr, moving up the country from Wales to Humberside, Lincolnshire and North Yorkshire, we have evidence from a probation officer who said, “We do have people who leave custody and have nowhere to live. Staff are still informally giving people tents.” What is your view on that?
Michael Spurr: I am sure that is accurate. It is a huge, huge issue for us—releasing people who do not have accommodation. As I think the NAO Report brings out, that is why reducing reoffending involves a whole range of parties and is not just about what we do in prisons or in probation. As Sir Richard says, we do not have the mechanisms to provide the accommodation. We need to work with others to provide the accommodation and do more to support offenders getting accommodation.
Where colleagues have done things that—somebody is saying they are going out and doing that, and I do know they have given, on occasion, tents. That is not what you want to do, but that was the humanitarian act of saying, “Actually, this person has nowhere to go.” I am not condemning that, because they are trying to help. Of course it is not what we want, but the sad reality is that people do leave prison, sometimes, without accommodation to go to. That is a reality. We want to reduce that. It has been difficult; accommodation has been difficult across the country, in England and in Wales, over recent years. Most probation colleagues would say it is one of the hardest things that they have to deal with—working with local authorities and others to find appropriate accommodation for offenders leaving custody.
Q49 Chris Evans: Mr Spurr, I find that statement absolutely amazing. You have just used the word “humanitarian” about giving somebody a tent. Would you expect them to pitch this tent? Are you actually encouraging rough sleeping—yes or no?
Michael Spurr: I am not encouraging anyone—I accepted that if somebody said that they had done that, it had happened. It is not our policy to give people tents when they leave prison. Our policy is to attempt to help people to have accommodation to go to on release. If they leave the prison and do not have accommodation, we still have to release people, and we give them a discharge grant. I agree with you it is not an acceptable position for people to go out and not have accommodation. I have been working as hard as I can, for as long as I can remember, to try to improve the opportunities for people leaving custody or in the community. I am simply talking about the reality. It is not true to say that everybody leaving prison goes into accommodation. We work with others to try to reduce the number who go out of prison and not into accommodation. Our aim is to have everyone in settled accommodation, not in bed and breakfast—
Q50 Chair: Can I ask you this, then? You have been 35 years a civil servant and nine years in this role. Where do you rank the current housing situation? We all represent constituencies where there are housing problems or different challenges. Is it worse now than it has ever been, or has it always been this bad? Has anything changed?
Michael Spurr: I think it has got worse in recent years. I think most probation colleagues—as I go round, talking to people in probation and CRCs, finding accommodation is undoubtedly one of the hardest things that people—
Q51 Chair: Has the Ministry of Justice given any thought to buying more hostels? I have been dealing recently with a constituent who is in a hostel, for instance.
Michael Spurr: Yes, we have certainly given thought to a whole range of things. For example, we have been expanding the number of approved premises places. We are looking to expand the number of approved premises places specifically because we need to do more of that. But we are not a housing provider, and that is the reality.
Chair: Absolutely. That is what the NHS always say to us when they have housing problems too.
Q52 Caroline Flint: I just want to share with you a statistic from Doncaster, because obviously I represent a constituency there. There were 216 releases from Doncaster prisons to Doncaster between April and August 2018, 51 of which were to no fixed abode. The releases from Doncaster prisons represent 70% to 80% of the total number released to Doncaster from all prisons nationally, so it is very much a Doncaster prisons to Doncaster issue. This came up during a discussion with our ALMO, St Leger, about the shortage of available housing and the pressures in the private rented sector. Do you feel the figures that I have just presented are high? Some 51 people released in those few months did not have anywhere to go.
Michael Spurr: Yes. I do think they are high—I think they are too high; 51 people not having somewhere to go is a risk. We want people to go into accommodation. We know that that helps reduce the risk of somebody reoffending immediately they go out of custody. Accommodation is critical for that. It is a really, really important priority for us, but it is tough.
Q53 Caroline Flint: The problem, going back to the Chair’s point, about housing, is that you could have the CRCs and what-have-you in the Doncaster area trying to work with landlords in our low-rent, low-value private rented sector, trying to take a piece of that action. We have already got problems in Doncaster. We are meeting our agreed requirements on the resettling of asylum seekers and refugees, and we are being asked to do more on that front. We have a whole lot of people who live in Doncaster who aren't offending, and there is no social housing, and they are trying to compete with all those other groups in the private rental sector. You say the Ministry of Justice is not a housing provider, but is there not a case for building more homes and accommodation, so that you are not robbing Peter to pay Paul when it comes to trying to get a home in an ever-shrinking private rented sector?
Sir Richard Heaton: Just two points: I am absolutely sure there is a compelling case for building more homes but, as Mr Spurr says, we are just not funded to do that. Our job is to work with partners in the Government, and that is what we can do uniquely. I am pleased that the Ministry of Housing, Communities and Local Government is working with us on a rough sleeping strategy. It may sound like small amounts of money, but we are not a well-funded Department—we are investing £6.5 million in a joint scheme to support individuals released from three prisons. That is not Doncaster, but Leeds, Pentonville and Bristol. This is exactly where we want to put our energy. Speak to any probation officer in the country. They work incredibly hard, and they will tear their hair out, because housing, employment and access to benefits are the three real drivers of recidivism. We desperately want it to be better. We are not a housing provider, but we have got some leverage with the MHCLG.
Q54 Chris Evans: Can we go to the Report, please, Sir Richard, and look at paragraph 2.3 on page 28? Could you talk us through that paragraph about the lack of piloting for the system?
Sir Richard Heaton: Lack of piloting of TR?
Chris Evans: Yes. It begins: “The Ministry did not pilot how transformed probation services would be delivered in practice.” Could you explain the reasons for that statement?
Sir Richard Heaton: I will do my best to reconstruct the reasons that existed at the time. It is partly, as Mr Spurr said, that there was a desire to get on with it and to keep the momentum going and to deliver before the 2015 election. The model did not lend itself to piloting, once the sentencing framework had been set in statute, because it is quite difficult to pilot different sentencing regimes unless you have statutory cover to do so.
Nevertheless, the decision not to test out in shadow form the CRC and National Probation Service relationship or to test out how the courts were to use the framework of intervention measures so that we could better predict what sort of orders they were to give the CRCs—our inability to do those two things meant that we launched the programme on a national basis, with a full roll-out, and had to pick up the consequences as we went along. Looking back on it, in terms of project success, it was not a good thing to have done. It would have been better had we been able to test some aspects of this out in real running form before the thing went live nationally.
Q55 Chris Evans: I understand, Sir Richard, your being under political pressure with the 2015 general election coming up. Considering you are dealing with public safety, did you not think to apply the brakes and step back and say, “This is not going to work”?
Sir Richard Heaton: I am sure there was a lot of consideration in the Government. I was in the Cabinet Office at the time, but not involved in this project. I am sure that there was a lot of consideration in Government, both in the MOJ and at the centre, about the scale and pace of the programme.
In defence of everyone who worked on the programme, all the checks, balances and assurances available to a major Government project all gave the programme the green light. It went through Treasury clearance and major projects review group clearance at the centre and all the rest of it. I am sure that there were anguished decisions about whether we were going too quickly, whether we should slow down or whether we should pilot or test bits of it. I was not privy to those discussions. However, the decision was taken to go ahead.
Q56 Chris Evans: But why did you take the specific decision to cut probation in half and then introduce new interfaces, which brought friction where there wasn’t any before? Surely that should have been picked up at least by the major projects group, and perhaps by the Treasury?
Sir Richard Heaton: I am absolutely sure—Michael can speak to what was going on at the programme board—that that risk was recognised at the time. I think that the interface between the NPS and CRCs has probably gone better than we feared. However, that was not part of the original design. It was simply that there was a desire to outsource probation, and then there was a recognition that the public would not accept some serious cases being dealt with by the private sector and so those would have to remain in-house. Lo and behold, you then have a two-tier probation service; you have engineered a split.
It was a consequence of a design that was then aimed off for the serious cases, which gave you the two-tier model. I do not think—I was not around for this bit—that anyone set out to design a two-tier probation service. It was a consequence.
Q57 Chris Evans: Mr Spurr, you have more experience of this than anyone in this room. What are your thoughts? Did you think at any point at the beginning that this would cause friction in a unified service?
Michael Spurr: Fragmenting the system was clearly going to cause some friction. The question was whether that was necessary and whether it could be managed. The reason why we went down this route was because a decision was taken to retain sexual and violent offenders—high-risk offenders—under the management of public sector probation officers. There were alternative options. It could have been that there was an outsourcing, for example, of a whole trust to the private sector, with some retained in the public sector. There were different options.
However, the main policy drive was to drive reductions in reoffending through a payment-by-results model. The reoffending rates of higher-risk offenders are relatively low, but obviously the consequence of a higher-risk offender reoffending is very great. The reoffending rates of shorter-sentenced offenders in prison and community-sentenced individuals are higher, and the potential to reduce reoffending rates and reoffences with them is much greater.
The combination of wanting to retain much more direct oversight of the highest-risk offenders and a desire to deal with the biggest cohort of those who create most harm through reoffending, in volume terms—the shorter-sentenced offenders—led to the decision to separate it into the NPS and different CRCs. There was a rationale for it at the time, but it was driven by those issues. It is perfectly legitimate to say that there would have been alternative models, and of course you are entirely right to say that separation causes a degree of friction. That is not ideal, but it was done for the reasons I have set out.
Q58 Chris Evans: But it is not just friction. The Report says that the CRCs are detached from the court process, that sentencers to do not have confidence in the CRCs and that the NPS does not have knowledge of or confidence in CRC services. This is a serious crisis. You have two institutions that do not trust each other.
Michael Spurr: I think the Report accurately reflects several things. I think it is true that sentencers have become less confident about community sentences, partly because they don’t have CRC colleagues in court—advice is given by the NPS—and therefore do not deal directly with CRCs in the way they once dealt with the unified probation service. In the new generation of contracts, one of the first things we set out was that there would be a single probation head in every English region and in Wales who would be responsible for both parts, so a single voice would be speaking to sentencers. That is really important. I think that that is accurate.
We have been working to build sentencer confidence. I have had regular meetings with a senior presiding judge, we have worked with the judiciary to look at what we can do with that and we have provided better information on what CRCs do, both at a national and local sentencer forum levels. Those are important. That work has been going on. It is true to say, however, that that has been an issue and it comes out in the NAO Report.
Q59 Chris Evans: That lack of confidence has led to judges going for short sentences over community sentences. I am right in saying that, am I not? There is a move towards that.
Sir Richard Heaton: I am not sure what the evidence is on that. If that were the case, we would have seen an uptick in the short sentence prison population, which I do not think we have. I do not want to underplay the judicial confidence piece, but I think I am right in saying that we have not seen that consequence. It has not come through in custodial sentences, but it is anecdotally picked up by all sorts of sources, including the NAO, that that confidence is not there and needs to be.
Q60 Chris Evans: We know from the evidence that the prison population is at breaking point, and that is due to more people being sentenced to prison. Do you know how much it costs per place for a prisoner every year?
Michael Spurr: Per place for a prisoner? Depending on which way you look at it, about £36,000 a person.
Q61 Chris Evans: I have got the cost per place as £40,843.
Michael Spurr: It depends what you are looking at.
Chair: Where did you get that from? Can you cite the source?
Q62 Chris Evans: This is from the MOJ’s latest data, the costs per place and costs per prisoner information release on 25 October 2018. It was £40,843 per place for 2017-18. To send someone to Eton next year is £40,668. You have to say that that is a huge cost to the taxpayer, because you have not reformed community sentences. If we had community sentences, the Government could be confident about reducing short sentences down to a maximum of six months and therefore reducing that figure. Am I right?
Michael Spurr: I absolutely agree about increasing sentencer confidence in community sentences. I absolutely think that prison should be used only where it is absolutely necessary. All the evidence indicates that if someone can be managed in the community, the outcomes are generally better. It is for sentencers to determine what is right, but I agree with all that. It is absolutely the case that prison places cost a lot of money, and on that basis, they should be used only where appropriate. That is for sentencers to determine. You are right that one of the reasons for making the changes we are making in the future reforms is to make sure that we can give back greater confidence to sentencers in community provision.
Q63 Chris Evans: So it still costs more to send someone to prison than to Eton, at the end of the day, according to figures from the MOJ.
Michael Spurr: I do not know how much it costs to send to Eton. It costs what it costs to send to prison. We have the set of figures. The rate varies depending on what type of prison you send people to. It is about £36,000 on average.
Q64 Chris Evans: Sir Richard, you said that when the system was designed, you were not sure what the long-term changes to sentencing practices would be. Why was that? They were disastrous, particularly for the CRCs. Were you talking to the MOJ at the time?
Sir Richard Heaton: Was the MOJ talking to who?
Q65 Chris Evans: Talking to the probation service. In particular, why did you not foresee the long-term changes to sentencing practices?
Sir Richard Heaton: I am not sure, sitting here. I suspect it was partly the case mix coming to court—in other words, the types of offenders that the police were charging. You may find this surprising, but it is surprisingly and frustratingly difficult to get a forecast of the sorts of case load that are coming into the courts. We saw an increase in serious cases coming to the courts and a decrease in less serious cases coming to the courts. That was partly it.
We failed to anticipate accurately how the courts would make use of the various sentencing outcomes at their disposal. They preferred quicker, cheaper interventions that brought less revenue into the CRCs than we had modelled, I think. To this day, I am not quite sure that we have put our finger on why that happened.
In an ideal world, either we would have forecast that better, or we would have created a model that was more flexible to variations in the case load coming to the CRCs. We were caught in the unfortunate position of not getting the forecast right and having a model that turned out to be inflexible and not having tested it. You have put your finger on a very difficult issue for us.
Q66 Chris Evans: I want to move on to the contracts. When I first came into this place nine years ago—would you believe?—I served on the Justice Committee between 2010 and 2012. Serious issues were being raised at the time, especially within the justice system and NOMS, about payment by results. That was raised by the Justice Committee on several occasions even after I left. Why did you use payment by results in this case, even when there were concerns for the probation service?
Sir Richard Heaton: As Mr Spurr tried to explain earlier, there was, I will not say a philosophical belief, but a belief, on some evidence, that if you incentivised providers to do the thing we cared about most, which was to reduce reoffending, they would economically be driven to do things that achieved that result, and therefore a payment-by-results mechanism would be the right mechanism to incentivise and reward them. There was some evidence for that, I think, from the early signs from the Doncaster and Peterborough trials—that actually there were innovative, amazing things that new providers could do, with fresh insights, that would improve recidivism. I think on the back of that evidence, payment by results was imposed.
There was one aspect of payment by results that we have not mentioned, which has also caused us difficulties—in a spirit of complete candour. There is nothing wrong with payment by results to provide a top-up where something has been achieved, that you want. I think a failing in these contracts—or a flaw in these contracts—was that we failed to safeguard the core costs of delivery. What you should not do when you are designing a payment-by-results contract is allow the core costs of public service delivery to be jeopardised by failure to achieve payment by results. If you are trying to achieve a public service you need to pay for it. Payment by results as a top-up for an additional benefit is, I think, more respectable.
Q67 Chair: I am going to ask Mr Lodge, from the National Audit Office, to give us some clarity on this point.
Oliver Lodge: I just wanted to point out for clarity, as it has been mentioned a couple of times, that the Peterborough and Doncaster pilots were quite different from the model pursued under Transforming Rehabilitation, in the sense that they were based within prisons. My understanding is that participation in them was voluntary, as well, rather than compulsory. So there were some significant differences.
Sir Richard Heaton: You are quite right, and the Peterborough one was a social impact one, which is absolutely not the model we have used here. I only adduced them to illustrate what was in the air, which was that there was a feeling that if you created the right financial incentives people would do interventions which would—
Chair: We have certainly covered this in previous work we have done—that these were not piloted. We have talked today about the breakneck speed, so we know some of the challenges.
Q68 Chris Evans: Rather than innovate, payment by results placed additional financial pressure on CRCs.
Sir Richard Heaton: It did, indeed.
Q69 Chris Evans: How did that come about, if you were just looking for results and innovation?
Sir Richard Heaton: As I say, I think because the measure was not one sufficiently within their control, partly because of the time lag and partly because reoffending is really complicated and depends on factors like housing and access to benefits and so on; and partly because—I think 18% of the contract value was through payment by results—effectively it put too much at stake, and if they failed to achieve the targets not only did they not get that reward but their cost base was undermined, so it was an element of the contract, which, I think, looking back on it, we should have done differently.
Q70 Chris Evans: Before I move on from this section, obviously lessons have to be learned. What has been learned about the payment-by-results model, and about contractors’ overcost?
Sir Richard Heaton: For me, it would be the point I have just made: you must not put payment for core services at risk. Secondly, the reoffending rate is possibly the wrong measure, because it is too attenuated. I would go for proxy outcomes instead. Thirdly, I think, it assumes that the system is prepared to accept zero intervention. In other words, it assumes that the system is ambivalent as to whether an intervention takes place, whereas, as we have discussed, the system, including ourselves and including the inspector, actually requires interventions to be made. So payment by results, which implies you can do nothing if you think that is the best way to achieve a result, is not satisfactory. Those would be my main learnings on this point.
Chair: So they will inform your next procurement.
Q71 Chris Evans: I want to go on now to ICT systems, and I have to say this is like groundhog day. It seems every Government Department in front of us has problems with IT. Could you just go through the problems you have had with the gateway system, please?
Sir Richard Heaton: I will start and Mr Spurr may wish to fill in the details, again. When the probation trusts came into the Ministry they brought with them, as you might expect, many different computer systems, none of which were compatible, and many of which were not very good. A successful effort was made to choose the best of those and to create a national system. There was then a commitment made, during the course of transfer of rehabilitation to the CRCs, that we would deliver what we called a strategic partner gateway, which was quite a complicated software gateway into our system, so people could plug into it. We were 12 months late in delivering that. We did deliver it in September 2016, but 12 months too late. That commitment was probably made at a time when things were moving very quickly. Again, in retrospect, it probably was not the right commitment. A better one would have been to say, “We’ll put our national system on to the cloud and provide modern API interfaces, and you can simply plug into them,” which is how we would do it these days. We promised a rather cumbersome, old-school way of connecting up, and it was 12 months late. We acknowledge that that was a fault.
Q72 Chris Evans: You have paid out £23.1 million in compensation to various CRCs. Do you think that this has damaged your reputation, and the confidence that CRCs have in working with you in future?
Sir Richard Heaton: I hope not. We have a very constructive relationship with the CRCs, both the probation officers on the ground, who are excellent, and their management. I hope that we dealt with this in the course of our long and difficult contractual relationship in a professional way. I do not think that it has undermined their overall confidence in us. It was one of those things that did not go as well as it should have done. Do you have a different perspective?
Michael Spurr: No, I think you have summed that up right. Getting a national system for probation was difficult in itself. That took longer. We did put it in place. We were delayed in putting in the partner gateway. A lot of the providers themselves have found their own difficulties in developing their own systems to link into that gateway, which demonstrates for all of us that this is tricky.
The world moves on very quickly. The cloud options were not seen then in the way that they would be today. That makes things more straightforward. Having a national system, whoever is delivering the service, so that everybody has one care system to work through is important. That is one of the things that we take from this.
Q73 Chris Evans: Why are so few CRCs using the gateway system? Is the lack of confidence a reason? Why are they opting not to use it?
Michael Spurr: The majority of them have chosen to continue to use the national system that we produced, nDelius, itself directly without using their own. Two are using the gateway to link into our system, and some have developed some of their own, but there are various reasons why they have done that. Forgive me for saying this again, but they have spent some money on this in terms of innovation; I suspect that they have decided to spend no more money on it, given where we have got to.
Q74 Chris Evans: Could you clarify something in the report? Paragraph 1.11 says: “By January 2019, only two CRCs were using the gateway, seven were still working towards introducing their own systems, and 12 CRCs had decided to retain HMPPS’s systems rather than introducing their own.” Could you clarify that?
Michael Spurr: I think that is what I was trying to say—12 of them have decided not to put their own systems in place, but to use ours. That was an option for them. The reason for the gateway was to say, “You can take the case data that we have from the central system, but if you want to use it in a different way within your own system, as long as we have the information on the central system, you can do that.” Initially, everybody thought that they wanted to do that; 12 of them are simply using our national system. They have not invested in doing other things with that.
Q75 Chair: Presumably they pay you a fee to use the national system—do they?
Michael Spurr: I don’t think they pay a fee. We want everything on the national database, so—
Q76 Chair: So it is cheaper for them to use the national system.
Michael Spurr: Well, they haven’t had to develop their own system, so—
Chair: Exactly, so it is a lot cheaper for them. That is presumably a driver.
Q77 Chris Evans: If you are able to, and it is not commercially sensitive, could you tell us how many legal claims you have against you for delays and the impact of those delays?
Sir Richard Heaton: I think we have settled, as part of the negotiations, so I do not know the detail.
Michael Spurr: I think on the IT we have settled, but we can let you know.
Chair: You can write to us.
Q78 Chris Evans: How much was the cost? Would you be able to share that with the Committee?
Chair: You can share it with us privately, if not publicly. We would like everything to be public.
Sir Richard Heaton: I will do what I can in the meeting. I might have it here, but if not—
Chair: That is a couple of things that we have asked you to write to us about.
Q79 Chris Evans: I will just end with two last questions; I know that my colleague wants to come in. I want to talk about parent company guarantees. They froze out the voluntary sector, and did not protect the taxpayer. What have you learned from that?
Sir Richard Heaton: You are right: it made it a difficult field to enter for the voluntary sector. Having said that, parent company guarantees serve a purpose. They mean that the taxpayer and the system are protected from the insolvency of a subsidiary. They are useful in some situations, and not in others. It is fairly standard Government contracting practice to seek one. The Government are not the only player that seeks guarantees of this sort. It is one of the obstacles to voluntary sector players being prime providers in this field, but not the only one.
Q80 Chris Evans: Okay. Voluntary organisations obviously play a massive role in the justice system. How are you going to ensure in the future that they are involved in any procurement?
Sir Richard Heaton: That is absolutely going to be part of the design for the next iteration of these services, when Ministers announce them. We would like there to be greater voluntary sector involvement in this field.
Q81 Shabana Mahmood: Before we talk about the future of probation services and your re-procurement process, can we talk about Working Links? Why were the three Working Links CRCs not brought back into public ownership at the point at which it became obvious that the company was going to go into administration?
Sir Richard Heaton: We were aware in advance that Working Links was in difficulty and we prepared a number of contingency plans. It would have been possible to bring them into public ownership. On a balance of risk and cost and operability, we decided that this outcome was the correct one in the interim. The work has been taken over by a small CRC, which is doing well, and persuaded us that it was well able to take the work on. As a pragmatic move, that seemed the right way to go for us.
Q82 Shabana Mahmood: Are you confident that that decision will result in the best possible outcome for the taxpayer when we are picking up the tab further down the track?
Sir Richard Heaton: By definition, it is a short-term outcome, because the contracts are now due to terminate earlier, but yes—of the various options available to us, it was the best outcome for the taxpayer.
Q83 Shabana Mahmood: Aurelius is the German venture capital company that bought Working Links in June 2016. Can you tell us whether they are the purchasers’ guarantor for the Working Links contracts? Sorry—the parent guarantor.
Sir Richard Heaton: No; the parent company guarantee in this situation remained with Working Links and Aurelius did not offer us an alternative parent guarantee.
Q84 Shabana Mahmood: Will that risk transfer to the Ministry of Justice?
Michael Spurr: Working Links are in administration. We are going through a process of administration. They hold the parent guarantee at the moment. We will have to work that through with the administrator.
Sir Richard Heaton: We have reserved our rights under the parent guarantee vis-à-vis the defunct company.
Q85 Shabana Mahmood: So we will have to see how the administration process unwinds.
What is your assessment of the current state of probation services in Wales and the south-west, given the collapse of Working Links?
Sir Richard Heaton: Michael might have a better operational view, but I think I would distinguish between Wales and the south-west. The south-west, as you will know from the inspector’s report, was not in a great state. Wales was in a slighter better state. We are confident that the new provider has got the bandwidth, resources and motivation to do well.
Q86 Shabana Mahmood: What is the current operational assessment of the quality of the services in those two regions?
Sir Richard Heaton: Poor, in Devon and Cornwall. Better in Wales. Do you have more detail than that, Michael?
Michael Spurr: That’s it. Unacceptable provision, frankly, in the south-west. Wales is significantly better. Unacceptable, as evidenced by the inspection and by our own audits, which was why we stepped in, alongside the administration. The two went together.
Q87 Chair: What about the continuity? I have a constituent who is trying to move from London to Wales. There have been a lot of hiccups, which I may write to you about. Do you think that is anything to do with the handover from Working Links to the new provider?
Michael Spurr: Continuity for?
Chair: Of case load.
Michael Spurr: Oh, I see what you mean.
Q88 Chair: If someone is in the system, are they guaranteed a seamless service? I only have one anecdote, but how should it be?
Michael Spurr: I don’t think the operation was working—well, I know the operation wasn’t working well. Ms Flint asked before about staffing numbers. The staffing numbers are not sufficient to make that work properly in the south-west.
Chair: In the south-west and Wales.
Michael Spurr: Yes. That is one of the reasons that we needed to address that. That is something that we have said very directly that we need addressed. That will be addressed. I am sure that will have affected some of the transfers, but I don’t know the precise detail. It is less so in Wales, so I would have expected it be easier to have achieved that in Wales.
Q89 Chair: But you are sure that the handover is being worked through.
Michael Spurr: At the moment, we are very happy with the way that that has been going, but I am not underestimating how difficult that is going to be, given that that service provision in the south-west has been so poor.
Q90 Chair: Did staff TUPE over?
Michael Spurr: Yes.
Sir Richard Heaton: If you have a constituent’s case that shows otherwise, please do let us know.
Chair: I certainly will, if I need to. Back to Ms Mahmood.
Q91 Shabana Mahmood: How confident are you that your contingency plans can handle the failure of bigger providers such as Interserve?
Sir Richard Heaton: We are pretty confident that we have good contingency plans.
Q92 Shabana Mahmood: Pretty confident?
Chair: For the record, Ms Mahmood is looking sceptical.
Shabana Mahmood: Can you try to bottom that out?
Sir Richard Heaton: We have a large contractual exposure across every part of our business, and we have had to step in in all sorts of ways: after Carillion, for example, with the management of Birmingham prison, and with Working Links. So I think we have good contingency plans.
Q93 Shabana Mahmood: Previous failures have given you some good experience to draw on, but given that no company can control more than 25% of the total market, what practically are you going to do if somebody else fails?
Michael Spurr: As in this case, we have the option to step in directly, and we will step in—
Q94 Chair: But that is now your only option.
Michael Spurr: It depends on which provider we are talking about, doesn’t it? It is not the only option for all those providers. We have a range of options, which include, if we are able to do this, using other providers, and stepping in directly.
Q95 Shabana Mahmood: Finally, on the employees of Working Links, what action have you taken in respect of pensions?
Sir Richard Heaton: I assume the staff have been TUPE-ed over in the ordinary way, but I can write to you if there is a particular point on that.
Q96 Shabana Mahmood: Yes, I think pension liabilities and what would happen were discussed previously, so if you could—
Sir Richard Heaton: I will write to you on that.
Q97 Chair: Of course, it depends on which pension scheme. There may be lots of issues. If you could write to us with what exactly is happening to staff who have been TUPE-ed over—
Sir Richard Heaton: Yes, of course.
Q98 Shabana Mahmood: Moving on to your re-procurement process and what is going to happen going forward, I was a little surprised, Sir Richard, at your rather robust defence of the commercial skills and the first-time-round procurement of these services. You said this had been procured well and that the problems related more to policy design features, but both of you also said in your evidence that elements of it were done at breakneck speed and that your job was to see it through. Sir Richard, is that the extent of your job—just to see something through?
Sir Richard Heaton: No. I think I probably misspoke earlier. I really didn’t mean to say that the contracts were great contracts. They were too complicated, the PbR did not work, and so on. All I was saying was that the people whose job it is to contract—the commercial folk—can’t be held responsible for the decisions that generated PbR and so on. I didn’t mean to say the contracts were perfect. Of course they are not. We have spent an hour and a half explaining, I hope, frankly and candidly the extent to which these contracts did not deliver in the way that was expected of them. So I’m sorry if I misspoke, and I apologise to Sir Geoffrey as well.
Q99 Shabana Mahmood: That is a very helpful clarification, because the approach you take moving forward does matter; you are going to re-procure these contracts. In figure 15 on page 40 of the NAO Report, one of the first points raised is about the 15-month timescale that you have for the re-procurement going live. That is another very challenging procurement timetable. What is your assessment of whether that timetable can be met?
Sir Richard Heaton: There are some pretty tough dates in there. I’m going to slightly dry up at this stage, but only to this extent: I don’t want to describe our future state, because that will be for Ministers to describe. There was a very compelling recommendation, although I think we would have got there by ourselves, in the NAO Report, which said we should pause to reflect on what the correct model is for delivering these services. We can’t afford to pause, in time terms, for the reasons you have just mentioned, but we will certainly metaphorically pause, and you will not see from us a blind re-procurement along lines that you would recognise from this experience. It will be better and different.
Q100 Shabana Mahmood: I apologise, Sir Richard: I have literally no idea what “metaphorically pause” means. Please could you tell us?
Chair: You have momentarily flummoxed the Public Accounts Committee.
Sir Richard Heaton: The recommendation was pause before you press ahead, and I am saying we don’t have time to pause, but we certainly won’t press ahead unthinkingly. That’s all I meant.
Shabana Mahmood: Well—let the record show my scepticism once again.
Chair: And laughter around the room.
Sir Richard Heaton: I’m sorry—
Q101 Shabana Mahmood: Well, here’s the problem, Sir Richard. You had a challenging timescale first time round. You have a challenging timescale again. Our fear is that we are just going to have déjà vu further down the track with the second attempt to procure the very same services that have failed utterly first time round. Is there anything you can say to us today about this timescale, and what you are doing with it, that will give us some confidence that we are not going to have the same dog’s dinner served to us in a few months’ time?
Sir Richard Heaton: As I think Ministers have said, you will see a model from us—I cannot give you any details, because decisions have not been made—that is better integrated and picks up lessons from this experience. It will not be a déjà vu experience
Michael Spurr: I would just add one thing that I hope might give some reassurance. This was a major, first-generation outsourcing. What we are going to is not that. We have tonnes of evidence and learning; the NAO Report summarises it all. We are not doing a completely new thing now. We are taking a set of arrangements and we will undoubtedly improve them through the revised arrangements.
The timescale is very tight, and we are very clear that we need some contingency on that, but it is not quite the same as previously. The points that the NAO put together in the Report give us a clear framework of things that we mustn’t do, which makes it more straightforward.
Chair: Free consultancy from the NAO. Ms Mahmood?
Q102 Shabana Mahmood: Mr Spurr, I appreciate that the first time around it was a really big change that was being planned for—a transformation—but this time you are picking up the pieces of a pretty major public policy failure. In respect of not having déjà vu, one problem at the outset of the first run at this was the lack of piloting and testing, but no piloting or testing is planned for this second occasion either. How can I possibly have any confidence that you guys will get this right the second time around?
Sir Richard Heaton: We haven’t set out what we will do, so you do not know that we will not pilot parts of it.
Chair: Okay. You might pilot it.
Q103 Shabana Mahmood: So you might take that on board. I live in hope.
Sir Richard Heaton: There is not a single lesson in the Report that we will not take on board. This has not been a great experience for the delivery of public services.
Shabana Mahmood: Sometimes, Sir Richard, it would be helpful if somebody could come and show us that a lesson has been learned, rather than showing us a plan to learn a lesson, but let’s not go down that track.
Q104 Chair: Just to be clear, you might pilot? This will matter for Mr Spurr’s successor.
Sir Richard Heaton: There will be a roll-out. I cannot tell you what we are going to roll-out; I would rather leave it to Ministers to explain that.
Q105 Chair: Okay, but the danger is that, if Ministers announce that too late, Mr Spurr’s successor, Dr Farrar, will have challenges implementing—
Sir Richard Heaton: As Michael says, we are aware of the hard deadline for the termination of contracts, and we are working on contingencies that would give us more time.
Chair: Okay. That is helpful to me.
Q106 Shabana Mahmood: Paragraph 3.15 on page 42 of the NAO Report says: “The Ministry believes there is strong interest in its future contracts, based on its early market engagement events.” Could you define what “strong interest” looks like?
Sir Richard Heaton: The sector remains engaged. I think that the changes we made to the contracts have encouraged them. They are encouraged by our saying, with political cover, that we want the future market to be mixed, with the private and voluntary sectors and the Government all playing a part. All the people we have been talking to, including some new players, are interested in continuing to deliver probation services on behalf of the public.
Q107 Shabana Mahmood: I am pleased that you said there are new players. How many new players are we potentially talking about?
Sir Richard Heaton: I don’t know.
Q108 Shabana Mahmood: In the early market engagement events, has there been a good level of new players, or have they mostly been the same faces that have delivered the current mess that we are working through?
Sir Richard Heaton: I don’t know the answer to that question. Do you, Michael?
Michael Spurr: There are other—I have not been involved in the market engagement events, but there are definitely people who do not now provide probation services who have expressed an interest. There will be other potential options.
The key thing is that, while this has been so difficult, it has been difficult for the providers as well, who are making losses, as the NAO Report makes absolutely clear. The point to be made is that, despite that, there is a recognition that this was a first-generation set of contracts, and there are a range of people who still want to be involved in this and are still actually committed to our sector. That is true in both the private provision and in the third and voluntary sectors as well.
Q109 Shabana Mahmood: Mr Spurr, did you say that you have actually been to these early market engagement events?
Michael Spurr: No, I said I haven’t.
Q110 Shabana Mahmood: You haven’t. Have you been to them, Sir Richard?
Sir Richard Heaton: indicated dissent.
Q111 Shabana Mahmood: I recommend that you both go. Do you have any sense of how many of those potential new providers have experience in this sector?
Sir Richard Heaton: [Interruption.] I have just been told that more than 40 organisations attended the market engagement, plus those from the voluntary sector.
Chair: So the voluntary sector is on top?
Q112 Shabana Mahmood: On top, or included?
Sir Richard Heaton: Forty, plus those from the voluntary sector.
Q113 Shabana Mahmood: Okay. Does whoever is sitting behind you know how many of that 40 were new people with some experience in probation and how many were people already involved in delivering these services?
Sir Richard Heaton: I am almost certain that the next iteration will have to be a letter.
Chair: Perhaps if you are passed a note, we can pick it up when you get the information, or you can write to us.
Q114 Shabana Mahmood: That would be helpful. Just on your desire to move away—obviously—from the payment-by-results model to target cost contracts, I want to return to this idea of the commercial skillset within your team. Target cost contracts would obviously involve a real change in the way things are done. On page 43, the NAO set out all of the things that are needed in order to make those a success. What confidence can you give us today that if this is the route that you pursue, you have the skills to do this?
Sir Richard Heaton: It slightly depends on what model we go for. Again, there is no blueprint—I just want to stress that the NAO Report does not comment on a blueprint, because we do not have one yet. We have got access to a commercial team that is now part of a Government commercial function, which helps us more than it did before. It means that we can draw on a Government-wide organisation, not just our own commercial staff. We have got a large number of commercial staff in the Department and access to a wider Government resource. Clearly, the more complicated, difficult and innovative the contract—if that is the way we go—the more difficult it will be for us. One of the things that we will be looking for is simplification, because one of the things that has not quite been drawn out of the conversation is just the sheer complexity of the current contract, which is not something that I would like to repeat.
Q115 Shabana Mahmood: That is helpful. Can I go back to the discussion around the NPS and CRCs and the separation between the two, in the sense of which is involved at court. That is obviously NPS; CRCs are not involved in any part of that process. I appreciate that that is part of the legislative framework and the design of how this policy has been enacted. It seems to me a bit of a design dysfunction, because you are having to find lots of workarounds to try to correct for the fact that CRCs, or what would be their successor, are not involved in the court process. Would it not be easier simply to design out that dysfunctionality and have a change in the framework?
Michael Spurr: There was a specific parliamentary requirement to have advice to court given by public servants, so it is not straightforward to take that away. I know that was debated at the time with some significant involvement and concern. It is right in terms of, even if that is retained, how do you ensure that we get the provision that CRCs are delivered before the court, so that they understand it better? There is no reason why you cannot have CRC staff being at court to provide support. There is a cost implication for that if you are going to do it—that is what we have got to work through in the next generation. I do not think there is any suggestion that we will change the advice to court on sentencing—it should come from a public servant. There is an issue about how you get the right information before the court, so that they better understand what options are available for sentencing. That is definitely something in the new procurement that we need to take further.
Sir Richard Heaton: I would just pay tribute to the professionalism of the probation profession across the country, in the private and public sector. They care about outcomes and quality advice to court, and they have worked well. There is a really good example from Durham and Tees Valley of placing a dedicated member of staff in court to support the NPS, and there is something in the. That professionalism is really welcome and good to see. You are right to say that it mitigates a point of friction, so to some extent it is a workaround. Nevertheless, it is just a tribute to the professionalism of the people on the ground.
Q116 Chair: Is that just the two examples?
Sir Richard Heaton: Those are the two examples I have, but there may be others.
Q117 Chair: If it is good, one would ask why it is not happening everywhere. Do you know? Is it something that you could do everywhere, if that is working in those examples?
Sir Richard Heaton: The mechanism for spreading out good practice is there. Sometimes good practice goes around the country quickly; sometimes it does not. We are certainly encouraging behaviour like that.
Q118 Chair: It is a bit vague, I must say.
Michael Spurr: We have a tool that the NPS are rolling out that will help sentencers to understand what is available in their areas from CRCs. That has been trialled in the north-west and is now being rolled out. We have sentencer buy-in from that, which will demonstrate to the senior presiding judge that there is a good deal of work that has been going on to try to improve that engagement with sentences.
Q119 Shabana Mahmood: Obviously, I would also wish to pay tribute to the professionalism of the staff who have to deliver these services. I have to say, though—for the people that are corporately responsible—it seems to me that this has been in operation now for some years. We have known about this point of friction on access to courts for CRCs. The best examples we have are basically common sense in action—a little bit of co-location of workers and the possibility of the forum. It should not have taken so many years to think that you should perhaps have a forum for all the different providers to be able to talk to one another, or that co-location should be piloted somewhere. Why has it taken so many years to learn something so basic?
Michael Spurr: Again, frankly, we gave opportunities to providers to do things differently. Naturally, I think co-location is a good idea—I would start with a view of co-location—but some providers wanted to move into rather better accommodation and enable their staff to work with greater flexibility, and they moved out from being co-located.
Shabana Mahmood: Mr Spurr—
Michael Spurr: Can I just finish? The reason that that was done was because, if you are giving people flexibility and saying, “It’s for you to determine how to run that,” you take away some of the things that you might choose to do that might improve that. So you have to go back and say, “This isn’t working so well. We want you to come back together.” It goes, I am afraid, back to the view that you were giving people flexibility, which was one of the things that was part of the policy.
Sir Richard Heaton: It did not help either that CRCs and the National Probation Service areas are not coterminous. That is something that we are determined to fix if we have another generation of this sort of model—to have a single regional person whose job it is to integrate CRCs and NPS performance across an entire region. Again, that was not part of the design. We had areas that were not coterminous with the national ones.
Q120 Shabana Mahmood: I will come back to that in a moment. Mr Spurr, I have to challenge you. This is not a point about innovation. This is, as you say, a friction that was designed into the process because of the requirements of Parliament. With respect, that is not about driving innovation; that is a systemic issue that is being brought in because of the legislative framework. Surely the common-sense workarounds were the responsibility of you and the Department, rather than leaving it to the innovation capabilities of CRCs themselves at a grassroots level.
Michael Spurr: The co-location was not part of any legislation. The legislation is about advice to court. Previously, probation colleagues would have been in the same offices. A number of CRCs, for understandable reasons, moved a lot of their staff to different locations—they wanted to do the work differently. Those were decisions they made in their bids and their business cases, which we could not prevent from happening because that was how they were going to deliver their business. That exacerbated some of the issues that you have just described. That has to work its way up. There are workarounds to try to make that work, and we have been addressing that, as I say.
Sentencer forums have always been there, and the NPS has been a part of them. The point was how much input was the CRC going to do in those partner forums, and they have done much less than we had anticipated, partly because it is not a requirement of their contracts and they are pressed in terms of how they are going to deploy their resources. That all comes back to the point about what we were anticipating getting in terms of innovation and additionality, and what we have actually had as a result of the way the contracts have worked in practice.
Q121 Shabana Mahmood: Paragraph 3.18 of the National Audit Office Report says: “The Ministry has also created a forum to enable magistrates, the NPS, CRCs, court staff, prosecutors and others to discuss challenges and opportunities for improving joint working.” How is the forum that you have now created different from all the other forums that exist, which are presumably also in existence to improve joint working?
Chair: The second half of paragraph 3.18 on page 42 in part three.
Michael Spurr: Thank you. I’m sorry.
Chair: Don’t worry—it takes a while.
Michael Spurr: How is it different? We have national forums and we have sentencer forums at a local level. We have simply been putting more NPS engagement into those forums and encouraging CRCs to be engaged. The senior presiding judge has actually met with all the CRC providers to reinforce her expectation of their involvement with us to improve sentencer confidence. We are effectively trying to improve the means by which we are engaging. That is what I think that paragraph is about.
Q122 Shabana Mahmood: When there has been some improvement in joint working and people have made some changes, either in the west midlands or elsewhere, as referenced earlier, what are you doing to make sure that it is adopted more widely across the system?
Michael Spurr: I go back to my previous answer. What we have done is made a very clear priority of improving sentencer confidence, which means engagement with CRCs at national level, which we have done, with the senior presiding judge taking a personal interest in this, and an expectation that there will be much closer involvement at local level. It is that very process that we are expecting will improve the confidence and the understanding at sentencer level.
Q123 Shabana Mahmood: But if you have best practice, or something that has emerged as best practice, in various parts of the country, why not mandate that it is taken up?
Michael Spurr: I cannot mandate providers in that way—
Q124 Shabana Mahmood: Or put some pressure on to ensure that common sense is shown and that this workaround actually works?
Michael Spurr: You can absolutely encourage people to do it, and the providers generally will want to do that, but I cannot mandate, because it is not in their contracts to deliver in that way.
Chair: Not in the current ones.
Michael Spurr: Not in the current ones. That is exactly the point.
Q125 Shabana Mahmood: Okay. Can we go on to the Reducing Reoffending Board that has been set up? I think it has been going for a year or so now. What has it delivered?
Sir Richard Heaton: It has met two or three times, I think. It was designed to meet quarterly. I think its benefit is in bringing Departments together at working level, rather than just the ministerial meetings. The things that I am pleased about are work with the Department of Health and my Department on an offender personality disorder pathway programme; work on a community sentence treatment requirement with NHS England and Public Health England; and proof of concept trials on a universal credit sign-up from custody programme to secure jobs for ex-offenders with Government Departments, called Going Forward into Employment. We have a handful of things—
Q126 Chair: Housing?
Sir Richard Heaton: On housing, the MHCLG rough sleeping strategy came out of this as well.
Chair: Sorry, that is rough sleeping.
Sir Richard Heaton: It is rough sleeping, but it is the acute end of homelessness. Those are the sorts of things that Government Departments can do by working well together. I am not saying for a moment that that is enough, or goes far enough, but I am cautiously pleased that we have some decent initiatives going. Rather than just sitting around thinking about the problems and writing strategies, we are actually doing things.
Q127 Shabana Mahmood: Those things that you just rattled off—I’ve got a Department of Health pathway programme—are these all things that are being delivered? Are they all at the planning stage? You said you have met two or three times. It was set up in March 2018; that’s quite a lot of work to have achieved in two or three meetings. I am rather impressed, if that is actually being delivered.
Sir Richard Heaton: The offender personality disorder pathway programme is a commitment being delivered by NHS England and HMPPS. The community sentence treatment requirement is being piloted. The universal credit sign-up is at proof of concept stage, so I am not pretending that we have conquered the world, but these are early steps. With the MHCLG rough sleeping strategy, we have got to invitation to tender, so that has not been rolled out. We are procuring bids—securing suppliers, rather.
Q128 Shabana Mahmood: It might be helpful if we got from you in writing a full read-out of all of these programmes and what stages they are at.
Sir Richard Heaton: Yes, and I do not want to over-promise. It is hard work getting things in Government, particularly at the moment.
Q129 Chair: I think the reason Ms Mahmood is asking that—we think as one in this Committee—is that some of those, or many of those, relate to other Departments. If you provide us with a list, Mr Heaton, that might actually help you, because we might end up challenging the other Departments in front of us.
Sir Richard Heaton: Thank you. I won’t over-claim success, but thank you.
Chair: We need to know what you are doing and what other Departments need to be working with that, because we are picking up some of these issues across other Departments as well.
Q130 Shabana Mahmood: Finally from me, how realistic is it for you to be able to provide a fit-for-purpose probation service, given all the financial constraints and timing constraints? What is the forward view?
Sir Richard Heaton: There is a huge prize here, and one of my reflections in preparing for this is that we have had some great people, great civil servants—some of whom are sitting behind me—working on probation, but really working on contracts, compliance and payment mechanisms. There are people who really want to provide excellent probation services and are just crying out for a bit of integration, a bit of common sense, a bit of simplicity and a bit of proper incentives. I am absolutely convinced that if those are conditions for success, we can make something much better in the timeframe available and put energy into creating an outcome rather than adjusting contracts, which is basically what we have been doing for three years.
Shabana Mahmood: We will be holding you to that, Sir Richard, given that you are—
Sir Richard Heaton: It is an aspiration.
Q131 Chair: Although we always see a knighthood arriving just before civil servants move Departments, so I do not know if you are planning to go anywhere.
I just want to pick up on a couple of questions. On the housing front, we were talking earlier about the numbers not getting housing. At one point, the figure of a quarter of people being released without accommodation was mentioned; I think you mentioned that, as I recall. Is there an acceptable level, do you think, of people being released from prison without accommodation?
Sir Richard Heaton: I suspect that there is no answer I can give to that that would be the right one. In human terms, there should be housing available for everyone except through sheer choice of their own.
Q132 Chair: I think we would all agree with that, and it is obviously pretty critical to reducing reoffending, which is why I asked about whether the Reducing Reoffending Board is delivering that. You are not the only Department to sit in front of us and tell us that there is a problem with housing, but that it will all be solved because local authorities or housing associations will pick them up.
Is there any serious conversation going on with other parts of government—not just the Government, but local authorities corporately—about how to plug into the shortage of affordable housing in some parts of the country the very people who, without it, will end up reoffending or creating more problems for themselves and the community or more costs for the taxpayer? Ultimately, it is a cost shunting thing. If you get it right now, when they first come out, it will save money, time and problems later on.
Sir Richard Heaton: That is the case that we make to MHCLG: that this is a priority housing need.
Q133 Chair: So you are making the case. What are you asking them for?
Sir Richard Heaton: We are asking for priority to be given to this group of homeless people.
Q134 Chair: So that is against the families who are in hostels for three years, waiting with a child.
Sir Richard Heaton: Indeed. It is a zero-sum game unless there is an increase in housing stock.
Q135 Chair: Have you had any serious discussions? You talked earlier about hostels and procuring accommodation. Are you planning to do any of that directly? Given that you are setting targets on probation and reoffending and that one of the issues is housing, because being without a stable home is obviously very likely to have an impact on reoffending, are you looking at any targets in the new system?
Michael Spurr: We are increasing the number of approved premises which are probation hostel places, but it is relatively small numbers and it tends to be for higher risk individuals.
Q136 Chair: And are they private? Are you looking at the private sector?
Michael Spurr: No, we run them ourselves, generally, because they tend to be for higher risk offenders. I would not want to pretend that that will address the volume numbers that we have been talking about, but we are doing it because we recognise that, particularly for that cohort, we have to provide more places—and more supervised places—for people coming out, which is more difficult.
Q137 Chair: Such as sex offenders, for instance.
Michael Spurr: Yes.
Q138 Chair: Given that, do you have any idea of the numbers that you are talking about and of where they are based regionally, so that you know what the scale of the challenge is?
Michael Spurr: It is relatively small numbers—a few hundred rather than thousands—but the stock is not huge. I can give you the formal numbers, if you want me to write to you.
Q139 Chair: It would be very helpful to have the formal numbers, and to have them broken down regionally, because it may be that sometimes there is a neighbouring local authority and a negotiation can be had with the released offender that they live somewhere else.
Sir Richard Heaton: Those numbers are for approved premises.
Michael Spurr: Yes, for hostels and approved premises. We manage those as a national system, so we do not have to—
Q140 Chair: Do you have any numbers for all prisoners released? We have the shocking figures from Cardiff that the chief inspector picked up, but that was only because they interviewed the 23 people leaving that day. That is quite a shocking issue. Do you keep figures like that for all releases? Do you have any method of knowing whether housing has been allocated to them?
Michael Spurr: We have had great difficulty in getting figures back, proven, about where people end up, from the DWP and so on. We used to, and we had some figures that were not right. When you ask a prison, you know how many people are discharged with a discharge grant or on the basis of not having a home—we have those figures. That is where you generally get what proportion of people are going out with accommodation.
Q141 Chair: Sorry—are you saying that you do have those figures or that you don’t?
Michael Spurr: We do have those figures, but what we do not have is figures about levels of settled accommodation or type of accommodation. But we would know the number of people who—
Q142 Chair: But if they are under probation, surely it is not beyond the wit of the probation service to find some way of tracking whether someone is still living, six months later, with a relative or friend putting them up on the sofa, or whether they actually have something settled.
Michael Spurr: You can ask people about it, but if you want to be absolutely clear, you need verified data, which is harder. One of the big problems for CRCs, which we have talked about before, is the number of people who leave prison and do not stay in contact. Part of the point about recalls is that you have people who leave and do not stay in contact with probation. Right from the outset, effectively, they do not have accommodation where they can be contacted; they are picked up later by the police, and that becomes part of the cycle and the difficulty.
Q143 Chair: It would be very helpful if you sent us any data that you have.
Michael Spurr: We will look at that.
Q144 Chair: It is something that we can pursue as a Committee, but we need some data to challenge elsewhere in the system.
We have talked a bit about the voluntary sector getting involved. We heard some quite compelling evidence last time from the Howard League about women prisoners; because of how the CRCs worked, they were often spread very thinly and there was no specialist provision for them. I appreciate, Sir Richard, that Ministers have yet to announce policy. In the new regime, is it your intention to look at how those groups perhaps with mental health problems, and women—groups of prisoners with particular issues who may be spread thinly nationally—will get the right support?
Sir Richard Heaton: Yes, it is. I am not sure that we have the correct analysis yet on women prisoners and recall, for example, so “yes” is the short answer.
Q145 Chair: But is it in the forefront of your mind?
Sir Richard Heaton: It is.
Chair: So we can expect you to tell us—
Sir Richard Heaton: Which were the two groups that you mentioned? Women and—
Chair: Anyone with specialist needs, but women and people with mental health problems where a general provider may find it challenging to provide the specific support that they need.
Sir Richard Heaton: Certainly those two groups we have in our sights, yes.
Q146 Chair: You talked earlier about MAPPA not fitting very well with the through-the-gate thing, but with MAPPA, when you cross a boundary from one CRC area to another, is a receiving probation service allowed simply to refuse to take somebody when it has been agreed by their home probation service that they could move?
Michael Spurr: All MAPPA cases are managed by the NPS. Because it is a national service, no probation service can refuse to take a case if we direct that they are going to take them. They can access resettlement services and other services provided by the CRC, but the management of the individual is a matter for the NPS.
Chair: That was very helpful.
Q147 Caroline Flint: Just a quick question, going back to the voluntary sector. A report was produced, I think last year, by Clinks, NCVO and the Centre for Voluntary Sector Leadership looking at the impact of what we have been talking about today on that sector. One of the things that they raised was that an adverse effect was that some of the smaller charity organisations were finding it difficult to gain funding from other sources, because there was confusion about what the NPS and the CRCs are meant to be funding.
One of their asks was that the Ministry of Justice produce clear and accessible public guidance on this, setting out the roles of prisons and of the NPS and the CRCs in this area. Have you followed up on that recommendation and the others that were made in that report?
Michael Spurr: I think the answer to that is yes, in the sense that that will absolutely inform what we are doing with the re-procuring. It is one of the unintended consequences of putting statutory provision in. People say, “Should we be funding at that point? Shouldn’t that be provided statutorily?” We funded that piece of work by Clinks—I think it is the same piece of work that you are referring to. We want to respond to that. We are going to respond to that; it will inform what we do with the revised contracts, et cetera. That is where we are.
Q148 Chair: The voluntary sector is something that we touched on, in the prison in Doncaster, about it not being involved. From what we have heard today, just to get it clearly on the record, the intention is that you will try to design it so that the input of the specialist voluntary sector organisations that have been rather cut out of the CRC process can be more usefully used and can help in rehabilitation.
Sir Richard Heaton: Yes, I think that is fair.
Q149 Chair: Okay. It is very odd not to have anything to pin you down on for the future. Usually we are told that everything is fine and we get the details in the future. We appreciate that the Minister has to make an announcement. We are giving you early warning that we will therefore be calling you back, though not Mr Spurr.
Mr Spurr, a final word from you. You have Dr Farrar taking over your role from the beginning of April. What will be in your private note to her about what to keep an eye out for, and what to watch in her new role?
Michael Spurr: I don’t think I have long enough to answer that.
Chair: Give us a top three.
Michael Spurr: The one thing I might say is, on this, the overriding thing is that reducing reoffending is really difficult and complicated. It requires targeted interventions, which are often quite costly. You can make a small but significant impact, but it is not straightforward to do.
As for the over-optimism that was there—that has been a fault of ours in the past as well: you do an accredited programme, and it looks to be good, so you become optimistic that you can get big reductions. That has not proven to be the case in reality. What this reinforces is that targeted, evidence-based interventions can make an impact and reduce the number of offences on victims. That is where we should be targeting the limited resources that we have to be as effective as possible.
That is what we are going to try to do under the next set of contracts, and I would absolutely say that that is the right approach. We can work with partners. Mixed market can give you value, but you have to work with them in a way that recognises that this is not straightforward or easy, and we should target resources on the best evidence that we have on what makes an impact.
Q150 Chair: And clearly going at it at the pace at which the last one happened is not a good idea. We will worry about the pace of the next change when it happens.
Michael Spurr: The scale of change is often underestimated. This Committee has said that before; the NAO has said it before. This just reinforces that. Big, major change takes a lot of attention and detail, and it isn’t done at the point you have delivered the—it wasn’t done in 2015. It has taken a huge amount of work to keep this system running and we have found out a lot out of it. That is why I believe that the next set will be better, because if we don’t take learning from what we have just done then something has gone really badly wrong.
Chair: Don’t worry, we will be giving her a hard time in a year’s time or so anyway. You have been a repeat witness here, so thank you for that. I guess that this might be one bit of the job you will not miss, but maybe not.
One of our ambitions as a Committee is to try, with the support of the NAO, to track the long-term savings of early investment, whether it be in early years or in this sort of thing, in order to make life for communities and individuals better, and the cost to the taxpayer better in the long run. That is our ambition. You will have to hold us up to that, Mr Spurr, from wherever you are sitting and watching us. I am sure you will be tuning in in future. Thank you for your time. The uncorrected transcript will be up on the website in the next couple of days and our report will be out after you have left, Mr Spurr, so we will make sure that we send you a copy.