In the public interest.

To download the report Prison Privatisation in Australia, The State of the Nation:
https://www.researchgate.net/publication/304313888_Prison_Privatisation_in_Australia_The_State_of_the_Nation

The project was partly funded by an industry partnership grant between The University of Sydney Business School and the Western Australian Prison Officers Union (WAPOU). The researchers independently determined the research design and analysis associated with this project.

Neither funding body has had any influence on the findings of this report.

Contacts

Associate Professor Jane Andrew jane.andrew@sydney.edu.au +61 2 90366277

Dr Max Baker max.baker@sydney.edu.au +61 2 90367084

1

Background

Australia now imprisons more people than at any point in its history. As of June 2015, 36,134 people were incarcerated across eight states, and the national imprisonment rate stood at 196 prisoners per 100,000 people (ABS, 2015: Table 2). The total annual net cost of Australia’s prison system stands at $3.4 billion (Productivity Commission, 2014: Table 8A.12). As a result of the growth in prisoner numbers and a variety of pressures on the sector, state governments continue to look for new ways to deliver prison services that are thought to be both socially and fiscally responsible, including various forms of privatisation.

Prison privatisations have been justified on a number of grounds. The first examination of prison privatisation in Australia, made through the Kennedy report of 1988, asserted that ‘In some particular areas the private sector can do it cheaper and better’ (Kennedy, 1988: 88). Subsequently, in 2009 the New South Wales General Purpose Standing Committee ‘Inquiry into the Privatization of Prisons and Prison Related Services’ concluded that ‘… the private management of prisons will also likely produce greater cost savings and efficiencies than if they were to remain in the public system’ (GPSC-NSW, 2009: 51). Similarly, in 2013 the Queensland Commission of Audit (QCA) claimed that ‘… greater efficiencies can be achieved by private operation of correctional facilities’ (QCA, 2013: 3–250). Equally, the Economic Regulation Authority (ERA), in a 2015 report on Western Australian prisons, remarked that ‘… private prisons are held to higher standards of accountability and transparency than public prisons’ (ERA, 2015c: 92). Accordingly, privatisation has been mooted as a way of providing prison services with greater performance, lower cost, better efficiency and stronger accountability but in reality, little is known about the consequences of privatisation and whether or not they deliver these benefits to the community.

Private prisons now incarcerate 18.5% of the prison population of Australia (Productivity Commission, 2014: Table 8A.1), and clearly play a large part in the functioning of the custodial system in Australia. In fact, Australia has the highest rate of private incarceration per capita of any country in the world (Mason, 2013: 2). Out of a total of 101 prisons in Australia, private contractors operate nine facilities in five different states: two prisons in Queensland, two in New South Wales, one in South Australia, two in Victoria and two in Western Australia. Tasmania, the Australian Capital Territory and the Northern Territory do not have private prisons and are therefore outside the scope of this report. Parklea (NSW), Arthur Gorrie (QLD) and Mount Gambier (SA) prisons all deal with remand prisoners. Port Phillip (VIC) and Parklea (NSW) both take maximum security prisoners. The remaining facilities house medium- and low-security prisoners, and do not take part in remand activity.

As of 2015, there are only three private contractors responsible for managing custodial services in Australia. These are GEO Group (GEO), G4S and Serco. Private prisons are now responsible for over 6,000 Australian prisoners (Productivity Commission, 2014: Table 8A.1), and absorb a considerable amount of taxpayer money nationally. Despite this, research into private prisons in Australia is extremely limited. Indeed, there has been no single publication or study in the last ten years that has covered all of Australia’s private prisons in detail. The present report aims to deliver such a review and in doing so demonstrates that not only do privately managed prisons across Australia vary greatly in terms of their accountability, costs, performance and efficiency, but also that it is very difficult to assess these criteria because of a general lack of transparency. This comprehensive report of the sector seeks to address this information gap and, as a result, intends to better inform future public debate on prison privatisation.

Purpose

The purpose of this report is to provide a description of Australian private prisons as they have evolved across the country. Our overview of private prisons in Queensland, New South Wales, South Australia, Victoria and Western Australia will give an understanding of the ‘State of the Nation’ with regard to prison privatisation and its impact.

As stated, our study considers private prisons in Australia against four key categories: accountability, costs, performance and efficiency.

Accountability represents the avenues available for holding contractors responsible for their actions. Accountability comprises two dimensions. The first dimension of accountability consists of the mechanisms that the government can use to ensure that the services it purchases from private contractors are delivered to an agreed standard. This is what we refer to as ‘internal’ accountability, in that mechanisms make a contractor responsible to the government, but not necessarily to the broader public. The second dimension of accountability is ‘external’, and consists of mechanisms for making the public aware of the nature and performance of contracts between the government and private contractors. External accountability is therefore important, allowing the public to hold those responsible for the prisons’ operations to account. Accountability helps mediate assessments of cost, performance and efficiency. After all, a private prison can only be said to provide accountability if the performance, costs and efficiency of its services is clearly communicated to the public. Accordingly, the study that follows is as much concerned with identifying what kind of data must be made available to make private prisons accountable, as it is with establishing what information is available already.

Costs reflects the expense to the state of having prisoners incarcerated in private facilities, including not only amounts paid to contractors, but also expenses involved in tendering contracts and monitoring performance, costs associated with contract failures, and the broader costs of the custodial system.

Performance refers to the quality of services provided by a private prison operator. This definition is not limited to performance standards set by the state. Rather, it also includes a broader range of performance metrics not necessarily incorporated into private prison contracts. This aspect of the study will therefore indicate whether private prisons are meeting contractual standards, as well as provide an assessment of whether contractual standards themselves offer a robust measure of performance.
Efficiency involves the relationship between the quality of services provided and their overall cost to the taxpayer. In practice, the meaning of efficiency can vary. Greater efficiency can entail an equal performance at a lower cost, a higher performance at the same cost, or even a lower performance at a radically reduced cost. This report consists of two parts. Part 1 provides an overview of our findings. Part 2 provides a detailed state-by-state analysis of the sector.

Part 1 Prison Privatisation: The State of the Nation

Findings

This report explores the distinct nature of prison privatisation across states and the varied nature of their accountability, costs, efficiency and performance. While there is no uniform pattern that describes the experience of all states with regard to these categories, any evidence of performance improvements and efficiency gains remains patchy and opaque; systems of accountability vary significantly; public reporting remains poor; and the total cost of private prisons remains unknown.
Overall, we find that there is not sufficient evidence to support claims in favour of prison privatisation in Australia. As a consequence, it is our view that no further privatisations should take place before an appropriate level of information is made available to policy makers and the public in order to properly assess the impact of privatisation on the sector. In addition, there is a need for more research that engages directly with those impacted by the sector: prison employees and prisoners.

This lack of available publicly information makes it difficult to make any evidence-based claims about the consequences of prison privatisation in Australia.

What we do know is that the way private prisons operate has changed over time. While systems of accountability and performance measurement have become more sophisticated, there is still a lack of information in the public domain to enable proper scrutiny of these prisons. There also appears to be a trend towards increased performance monitoring within private prisons, but little of this information is made available to the public.
Not all areas of prison privatisation have seen a clear evolution. Recently, Western Australia provided some detailed information about the operational costs associated with private prisons each year. The same cannot be said for the other states. In fact, all other states obscure this information, either entirely or in part. Queensland has never made contracts publicly available, and does not disclose amounts paid to private contractors in the annual reports of the Department of Corrective Services. Likewise, New South Wales has prevented public access to private prison contracts under commercial-in-confidence rules. PLFs paid to the contractor are revealed in the annual reports of Corrective Services NSW; however, these are only presented as a percentage of the overall fee, which remains unknown. Cost data from Victoria are similarly opaque, and give little idea of how much has been paid to contractors based upon their performance.

The overwhelming conclusion of this study is that there is insufficient publicly available information to determine whether or not private prisons provide a better approach to the delivery of prison services as compared to the public system. The purported benefits of introducing private prisons along the lines of accountability, costs, efficiency and performance still remain to be proven. In order to establish the impact of privatisation on the custodial system, a range of cost and performance data must be made available by those states with private prisons.

A genuine comparison in terms of performance, cost and efficiency will only be possible once all private prisons are subject to similar levels of public accountability, and this will require a genuine commitment to evidence-based prison policy reform.

Limitations

This report brings together publicly available information and as a consequence, relies almost exclusively on institutionally generated forms of knowledge about private prisons. This limits the frame within which this report can be read. For the most part we comment on the presence or absence of information relative to other states, in order to indicate areas and issues that warrant further research. By way of an example, we discuss the cost per prisoner per day figure provided by each state, but it is clear that more work is needed to assess the quality of these figures and whether they hinder or support evidence based policy.

In addition, some states with private prisons may appear to be functioning better than other states because they disclose more data at a greater level of detail; however, there are limitations to this interpretation. Comparatively better performance does not necessarily equate to good performance and the existence of comparatively more information does not necessarily mean it is useful or of good quality.

Challenges for the Future

This report provides a comprehensive review of where we are today in terms of prison privatisation in Australia and, as a result, it outlines the key issues that will shape the future of private prison policy in Australia.
Over time, governments have gathered more and more data from private prisons, and indeed from prisons more generally. The recent report by the ERA of Western Australia (ERA, 2015c) exemplifies this trend, in that it recommends increased data gathering across the whole custodial sector. The growing presence of benchmarks, SLAs and KPIs across all five states with private prisons indicates that this is a general trend. Consequently, there is an increasing level of ‘internal’ accountability within custodial systems in Australia. However, states with private prisons still lack sufficient ‘external’ accountability to the public.

The second issue that will influence the future of privatisation is overcrowding. All states in Australia are under pressure to provide infrastructure for a greater number of prisoners whilst budget constraints remain tight. In this context private prisons are attractive due to their alleged efficiency gains. However, there is as yet no proof that privatisation has brought consistent improvements to the efficiency of any custodial system in Australia, and there is even less evidence to suggest they are cost effective.

Recent reviews of state custodial systems also link the issue of overcrowding to recidivism. The ERA of Western Australia (2015c) and the Victorian Ombudsman (Ombudsman-VIC, 2014) have both examined the need to address overcrowding by reducing reoffending. However, the relationship between privatised imprisonment and recidivism is still unclear. The contract for the new Ravenhall Prison, under construction in Victoria, incorporates a recidivism target into the KPIs, with direct consequences for the PLF paid to the contractor (GOV-VIC, 2015). This suggests that governments may try to reduce overcrowding by connecting the profit motive to attempts to rehabilitate and reintegrate offenders. However, this approach overlooks the broader driving forces behind recidivism, including economic deprivation and stricter sentencing laws. Accordingly, future research should explore the linkage between the profit motive and reducing reoffending rates, and address the possibility of legal reforms such as the ‘Justice Reinvestment’ initiative (Papalia, 2015).
The third issue that will define the future of prison privatisation in Australia is the role of the labour force. As this report notes, the introduction of new methods of data collection, performance measures and oversight has entailed a greater focus on the wellbeing of prisoners. However, privatisation of prisons has had negative consequences for workers. New South Wales, Queensland, Victoria and Western Australia have all experienced problems at private prisons that are directly attributed to cuts in staffing levels. In Western Australia, the ERA indicates that one benefit of introducing private providers is that it will reduce the cost of workers’ entitlements (ERA, 2015c: 95– 96). Accordingly, while prisoners are now viewed as stakeholders in the custodial system, prison officers are increasingly viewed as a cost to that system. The Office of the Inspector General of Prisons in New South Wales runs counter to this trend, emphasising the importance of evaluating prisons as workplaces as well as sites of incarceration. This may prove effective in attracting skilled labour to the sector and reducing staff turnover for prisons. Accordingly, future research should seek to incorporate the wellbeing of prison workers into discussions of performance of private prisons.

In conclusion, there must be more information about private prisons in the public sphere if a real debate on privatisation is to take place. However, this will not be sufficient by itself. Existing structures of accountability all focus on gathering data from contractors, based on performance targets and compliance with standards. In order to gain a real understanding of how private prisons operate, the knowledge of those working in private facilities must be added to the data already being gathered. Custodial officers are stakeholders within the prison system, and can provide qualitative information that does not easily fit into rigid structures such as KPIs. Future research into prison privatisation in Australia should therefore focus on gathering interview data from people working within prisons across Queensland, New South Wales, South Australia, Victoria and Western Australia.
Relying on information that is in the public domain, Part 2 of this report explores these issues in detail, creating a picture of the accountability, costs, performance and efficiency of private prisons in each state. Each section concludes with a general of analysis of prison privatisation in each state in order to inform a future evidence-based approach to prison policy.