Private prisons require quality inmates

What, not more selective reporting by The Australian ... This time the economics editor extols the virtues of private prison operator Serco ... Cherry picking prisoners can result in glowing outcomes ... Barry Lane in Melbourne asks, why should the state pay for a private operator to make a profit, when the taxpayer has to pick-up all the tab?

On May 17 Victorian Corrections Minister, Andrew McIntosh, told a parliamentary committee that Victoria needed a new 500-plus bed medium security prison for men.

In its recent budget, the conservative Baillieu government allocated $2 million to develop a "business case" for a new prison.

A new prison was necessary, so said Mr McIntosh, because the state's increasing population and the government's decision to abolish suspended jail sentences would place added strain on an already stressed system.  By strain and stress, I think McIntosh means overcrowding.

Presumably, part of the "business case" development will include an examination of the economics of whether the prison should be built and run by the state or built by the state and run by a private contractor.

When I say built by the state, I mean in the name of the state but as a public-private partnership. 

I can't imagine that the Baillieu government is going to stump up the funds to construct the prison or any other public buildings for that matter.

Public-private partnerships are, of course, inherently more expensive for the state because the private contractor has to borrow at commercial rates of interest, rather than the lower rates the government would be obliged to pay.

In that respect, there is no difference between Liberal and Labor because both parties are now firmly wedded to avoidance of government debt to fund the construction of government infrastructure.  

Michael Stutchbury, economics editor of The Oz, is in no doubt that private prisons are best.

In a piece in Rupert's Bugle on May 21, Stutchbury worked  himself into a lather of praise for Western Australia's only private prison operator, the UK based multinational, Serco.

The source of Stutchbury's Serco boost was a report, released last week, by WA's Inspector of Custodial Services, Neil Morgan.

According to Stutchbury, Inspector Morgan said that the Serco managed medium security Acacia prison ...

"is without doubt one of the best performing in Western Australia, if not the best."

Stutchbury waxed lyrical:

"It yields cost savings to the state of up to 30 percent. Compared with $270 a day in government jails, each Acacia prisoner costs $182, including an eight percent profit margin for Serco. Yet Serco's 'pro-social culture' treats prisoners 'with respect and decency'. Its prison officers have 'strongly positive views of senior management'. And the jail has an 'unblemished record' for basic prison performance indicators, with 'no escapes, no loss of control and no other major incidents'. Self-harm is low.

While some areas need improvement, Acacia's health services are the best of any WA prison. It 'excels' in reintegrating released prisoners into the community. Its treatment of indigenous prisoners is a potential model for public prisons."

Stutch also reported that the Morgan report hails Serco's case management model run by one-on-one managers, psychologists, teachers, TAFE instructors, chaplains and non-profit agencies such as the Salvation Army and Relationships Australia.

The idea is that prisoners can leave jail with drivers licences, birth certificates, Medicare cards, help with paying outstanding fines, accommodation, vocational training and sometimes prearranged jobs.

David Campbell: no profiteering on Christmas IslandThere was stuff about Serco's incentive-based performance indicators, innovation and the drive for efficiency and improved outcomes.

There was even a separate article where Serco's local boss, David Campbell, was given a free kick about what a great job the company is doing on Christmas Island.

One fascinating revelation was that the head of Serco's London based "think tank" is Gary Sturgess. Sturgess is well remembered in NSW as one of Liberal Premier Nick Greiner's top advisers. He retains close connections with the recently installed O'Farrell government.

Not surprisingly, Serco was quick to spruik Inspector Morgan's report.

Although a lot of the positives were mentioned by Serco and Stutchbury, nowhere did I see mentioned that for the Acacia population of 1,000 prisoners:

• There were only 17 computers for them to hone their pre-release skills on;
• 115 of them were minimum security prisoners who, because they were accommodated in a medium security prison, did not have access to re-entry services that were available in a minimum security prison; and
• 240 of them were unemployed and another 200 were underemployed.     

Those who were underemployed were employed for as little as an hour a day on work which provided little skill development, according to Inspector Morgan.

One wonders how Serco is going to meet its contract KPI's for re-entry competencies.

Nor did I see any mention of a report in The New York Times published on May 18, headed Private Prisons Found to Offer Little in Savings. 

Research from the Arizona Department of Corrections prepared on April 13 suggests that private prisons can cost more to operate than public ones, even though they steer clear of the sickest, costliest inmates.

They also steer clear of murderers, sex offenders, escapees and other inmates who might cause trouble and expense.

Spokespersons for Arizona's Republican Governor and Corrections Corporation of America did not dispute the data.

The Times reported:

"Five of eight private prisons serving Arizona did not accept inmates with 'limited physical capacity and stamina' or severe physical illness or chronic conditions, according to the state's analysis, issued last month. None took inmates with 'high need' mental health conditions. Some inmates who became sick were 'returned to state prisons due to an increase of their medical scores that exceeds contractual exclusions'."

The state, on the other hand, "is required to provide medical and mental health services to inmates regardless of the severity of their condition".

That's really the rub with private prisons because unlike other privatised public services (health insurance, hospitals, schools and security services, to name a few) there is a third party contributor who partially reduces the financial burden that otherwise would fall on the taxpayer.

With private prisons however, there is no third party contributor. 

If the state is going to pick up the tab whether the operator is public or private, what is the benefit to the government of paying basic costs plus profit for managing the most problem-free and therefore least expensive prisoners?

It'll be interesting to see how the Baillieu government deals with the inherent inconsistencies and contradictions between the opposing positions.

Will ideology or informed common sense come out trumps?