Offender Rehabilitation Bill [Lords]

Public Bill Committee, 26 November 2013.

John Robertson (Labour, Glasgow North West)

Before we begin, I have a few preliminary announcements. Members may, if they wish, remove their jackets in Committee sittings. I remind Members to switch off their phones or to put them on silent.

As a general rule, my fellow Chair and I do not intend to call starred amendments that have not been tabled with adequate notice, which is three working days for Public Bill Committees. Therefore, amendments should be tabled by the rise of the House on Monday for consideration on Thursday, and by the rise of the House on Thursday for consideration on Tuesday.

Before we begin our line-by-line consideration of the Bill, some brief explanations may be useful for Members who are relatively new to Public Bill Committees. The selection list for today’s sitting is available in the room. It shows the amendments that have been selected for debate and how they have been grouped. Those that have been grouped are generally on the same or a similar issue.

The Member who has put their name to the leading amendment in a group will be called first. Other Members are free to catch my eye to speak to all amendments in the group. A Member may speak more than once in a single debate.

At the end of the debate on a group of the amendments, I will call the Member who moved the leading amendment again. Before they sit down, they will need to indicate whether they wish to seek to withdraw the amendment or to seek a Division. If a Member wishes to press any other amendment in the group to a vote, they will need to let me know.

I work on the assumption that the Government wish the Committee to reach a decision on all Government amendments. Please note that decisions on amendments do not take place in the order they are debated, but in the order they appear on the amendment paper.

I will use my discretion on whether to allow a separate stand part debate on individual clauses and schedules following the debates on the relevant amendments. In other words, if we spend a long time on one group of amendments, I will allow it to veer into other areas of the clause, and there will be no stand part debate. Someone may want to ask me whether I intend to allow a stand part debate.

The Committee will automatically adjourn at 11.25 am this morning. This afternoon’s adjournment is in the hands of the Whips, but I will prompt them to let them know that it is conventional for it to be at round about 5 o’clock.

I hope that those explanations are helpful.

Jeremy Wright (Conservative, Kenilworth and Southam)

I beg to move,

That—

(1) the Committee shall (in addition to its first meeting at 8.55 am on Tuesday 26 November) meet—

(a) at 2.00 pm on Tuesday 26 November;

(b) at 11.30 am and 2.00 pm on Thursday 28 November;

(c) at 8.55 am and 2.00 pm on Tuesday 3 December;

(2) the proceedings shall be taken in the following order: Clauses 1 to 3; Schedule 1; Clause 4; Schedule 2; Clauses 5 to 8; Schedule 3; Clauses 9 to 14; Schedule 4; Clause 15; Schedule 5; Clauses 16 to 19; Schedule 6; Clauses 20 and 21; Schedule 7; Clauses 22 to 24; new Clauses; new Schedules; remaining proceedings on the Bill;

(3) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Tuesday 3 December.

First, may I welcome you to the Chair, Mr Robertson? I look forward to your wise guidance to us all in our deliberations on the Bill. I also look forward to the chairmanship of your co-Chair, Ms Dorries. I also welcome all members of the Committee. I know that we will have a good and informed debate. I recognise that the Committee has a range of experience and understanding, from which I am sure we will benefit as the Committee progresses.

I believe that the programme motion provides for more than adequate time to scrutinise the Bill in detail. As the Committee will readily appreciate, it provides for three days of debate over six sittings—today, this Thursday and next Tuesday. As I hope is apparent from the motion, we propose to consider the Bill in order, with schedules taken along with relevant clauses, as you have explained, Mr Robertson.

I hope that the Committee will be minded to approve the programme motion and that we can proceed with line-by-line consideration.

Jenny Chapman (Labour, Darlington)

It is also a pleasure for me to serve under your chairmanship, Mr Robertson, for, I think, the first time. It is good to be here with your guidance.

It is with some regret that we have agreed to three days for the Bill. Although there is a huge amount of agreement and not that much controversy with the Bill, clause 1 is hugely contentious, as the Minister will have gathered from the debate on Second Reading. Not one hon. Member referred to the rest of the Bill; every contribution was about clause 1, which was not inserted by the Government, so we find ourselves in an unusual situation. We hope to be able to spend a great deal of the time allocated to our consideration of the Bill on clause 1.

Andrew Slaughter (Labour, Hammersmith)

I am sympathetic to both my hon. Friend and the Minister. If the Government were to agree to clause 1 now, the debate could be a lot shorter, and the Committee could be much more productive as well.

Jenny Chapman (Labour, Darlington)

I thank my hon. Friend for that helpful suggestion.

Jeremy Wright (Conservative, Kenilworth and Southam)

I wonder whether the hon. Lady agrees that we could shorten the Committee’s deliberations in exactly the same way by the Opposition agreeing to take out clause 1?

Jenny Chapman (Labour, Darlington)

There is a disadvantage in the Minister’s suggestion. We would not be able to do that, because we profoundly disagree with the removal of the clause. I do not want to labour the point too much, because I want to get on to debating the clause. We would have liked more time to discuss clause 1 and to go into the issues in a lot more depth, but I will leave it there for now.

Paul Goggins (Labour, Wythenshawe and Sale East)

It is a pleasure to see you in the Chair and to serve under your chairmanship, Mr Robertson. I rise not to challenge the programme motion, but to seek the Minister’s assurance on an important point. However long we take to debate the clause, it is undeniable that we will deal with it first. Once we have moved beyond the clause and we are on to more detailed issues, I am mindful—I am sure the whole Committee is mindful—that there are events taking place that are relevant to the Bill seemingly on a daily basis at the moment. I am thinking particularly of G4S admitting last week that it had overcharged the Ministry of Justice—the Minister will understand the relevance—by £24 million, and offering to pay it back.

On Friday, the Justice Secretary announced the decision not to award a contract for the South Yorkshire prisons to Serco, because of the delay associated with the investigation, which rightly had been carried out by the Government. Will the Minister assure us that if events take place that are relevant to the Bill, whether in clause 1 or any other part of the Bill, he will seek to inform the Committee as soon as possible?

Elfyn Llwyd (Plaid Cymru, Dwyfor Meirionnydd)

It is a great pleasure to serve under your very able chairmanship, Mr Robertson—not for the first time in my case.

I agree with the hon. Member for Darlington and the right hon. Member for Wythenshawe and Sale East about the gravity of the proceedings we are discussing today. The clause is important; it was supported by people from all sides in the other place, reflecting the will of that House. Merely wiping it off the face of the Bill seems to be not unconstitutional, but something that we should not proceed to do in this way. That would be a matter for the whole House to decide, not the Committee.

Other things in the Bill are of critical importance, not least the points mentioned about the shysters who will be involved if the Government have their way. There are risks in proceeding without any pilots; we are kicking a ball into the air without any knowledge of where the ball will land. That analogy is perhaps not serious enough, but there are risks being posed. We all know from the Government’s internal risk assessment that we are treading on very thin ice. If things go wrong, it is not simply a matter of saying, “Oh, dear. We’ll do something else.” If things go wrong, people will be in danger; there is no doubt about that. If we dismantle the probation service, as is intended, it will be extremely difficult to put it back together again.

I fail to understand—other than pure dogma—why much of the Bill is before us today. However, we will have plenty of time to debate it in the coming days. I am sure that, as usual, the Minister will engage with us as much as he can. There will be many questions proposed, and I am sure he will do his level best to answer them, because the public demand that.

John Robertson (Labour, Glasgow North West)

Before I call the Minister, a number of conversations were going on during the previous contribution. I do not like that. If you want to talk to each other, please leave the room.

Jeremy Wright (Conservative, Kenilworth and Southam)

I am grateful for comments made by members of the Committee. The hon. Member for Darlington is right that there is a broad measure of agreement on a large part of the Bill. I certainly recognise that there will be extensive debate on clause 1, but the right hon. Member for Dwyfor Meirionnydd is right that there are important other parts of the Bill to consider. It is important to strike that balance.

In response to the right hon. Member for Wythenshawe and Sale East, I will try to keep the Committee as updated as I can. He will recognise that there are limits on the comments I am able to make about the particular companies he referred to, because of ongoing investigations. I will be hamstrung to some degree in what I am able to say to the Committee and the way in which I am able to respond to some amendments. I know that the right hon. Gentleman will recognise and appreciate that.

I hope the Committee will support the programme motion and that we can get to the important work described by hon. and right hon. Members.

Clause 1 - Probation service reform: Parliamentary approval

Jenny Chapman (Labour, Darlington)

I beg to move amendment 51, in clause 1, page 1, line 3, leave out

‘structure of the probation service’

and insert

‘responsbilities of, or Ministry of Justice contracts with, probation trusts.’.

John Robertson (Labour, Glasgow North West)

With this it will be convenient to discuss the following:

New clause 1—Requirement to pilot before tendering for probation services—

‘No national tendering for any probation service shall commence before any proposed restructuring of such services has been the subject of a pilot scheme which is subsequently independently monitored and the results of such monitoring laid before both Houses of Parliament.’.

New clause 2—Requirement to pilot before restructuring probation services—

‘Any proposed restructuring of the Probation Service must first be the subject of an independently evaluated pilot scheme and the proposals should be laid before Parliament and be approved by resolution of both Houses.’.

Jenny Chapman (Labour, Darlington)

My remarks will address all of clause 1 and proposed new clauses 1 and 2. The Minister finds himself in an unusual situation. I have been in the House only three years and other colleagues have far more experience, but it is not often that a Minister comes to Committee to remove a clause. Clause 1 is very important and was inserted in the other place by a Cross Bench vote, where every Cross Bencher present voted in favour of insertion.

The clause means that the Government cannot alter or reform the structure of the probation service unless their plans have first been laid before and approved by a resolution of both Houses of Parliament. That clause was inserted by peers against the wishes of the Government. It provides the reasonable safeguard that the Government allow parliamentary scrutiny before they press ahead with proposals to change the probation service.

As Government plans include a massive irreversible sell-off of the service, there is a chance that public safety will be put at risk. I am interested to hear why the Government believe that parliamentary oversight is not appropriate in this case. There is oversight of far less consequential matters where we do have a vote. Not long ago, on the subject of Criminal Records Bureau checks, we were invited to vote on the types of offence to be included. Those were quite detailed decisions. However, Parliament is not to be asked for any opinion on something as fundamental as this matter, which is quite disturbing.

Amendment 51 is technical because the probation service is not defined in statute. A probation trust exists only by virtue of its contract with the Ministry of Justice, and because the probation service is not defined in statute we thought that it might be more helpful to refer to contracts with probation trusts. This was the subject of a great deal of debate in the other place, and we would be very happy to see the clause amended in this way because we understand that the Government may find it deficient in some way or another; I am sure that we are about to hear why that might be.

New clauses 1 and 2 were tabled by my right hon. Friend the Member for Dwyfor Meirionnydd, and they deal with the piloting of reforms. We strongly support these new clauses and I will come back to the issue of piloting later.

I will just recap the main points of the Government’s proposals, since they are noticeably absent from the Bill. The Government plan to abolish local probation trusts. They will be selling off 70% of the work load to private providers and we are not clear who those providers will be. We have heard them described quite colourfully already this morning, and I think that we are all aware of some of the concerns about the potential providers that have been suggested already. However, the national probation service will retain supervision of the remaining 30% of the work load.

Consequently, these plans will see the vast majority of offenders—including dangerous, violent and sexual offenders—handed over to companies that have no experience of probation services. That is a very important point to note, because although there are several large successful businesses that provide security services or that even run prisons, they do not have any experience whatsoever of providing this kind of supervision in the community. We will see the service being fragmented and the management of offenders being artificially divided, as we see it, by risk, in spite of the fact that risk regularly shifts. Also, we will see the national roll-out of a completely untested payment-by-results model. So, from what I have already said, it is possible to tell that we are really not enthusiastic about what the Government are proposing.

A reference to these proposals had to be forcibly added to the Bill by peers because the Government did not want to allow any proper scrutiny of their proposals. The only reason that we have had these proposals outlined is because we have had an Opposition day debate, and because the insertion of clause 1 in the Bill enabled us to discuss these issues on Second Reading and indeed to discuss them today. If that clause had not been inserted, we would not be able to discuss any of these wider issues about the reform of the probation service. All of the things that I have described would be happening without any parliamentary scrutiny whatsoever. Although we have been waiting for a while for this Bill to come back to this House, the Government have chosen to ignore the will of one House of Parliament and they have continued with the reorganisation of the service anyway.

Colleagues will know, because I am sure that they have been lobbied vigorously by probation officers in their constituency, about the very high level of concern among those officers, who are currently working with offenders in the community. They are very worried about these proposals. They know that they are being asked to make decisions about their jobs right now, before we have even had a chance to have any debates on these proposals.

Andrew Slaughter (Labour, Hammersmith)

My hon. Friend is making a very good point, namely that it is increasingly the trend of this Government and this Secretary of State not to bring before the House crucial and central matters. I hope that the Minister will address seriously the central issue that my hon. Friend has highlighted, because it is really at the heart of the Bill. It is only because of what the Opposition and the other place have done that we are talking at all about what is the central issue. Other parts of this Bill are important, but the issue that my hon. Friend has highlighted is the central issue and it is for the Government to explain why they have chosen not to debate it properly before the House.

Jenny Chapman (Labour, Darlington)

That is completely right. The concerns that we have are not so much about the proposals, for example, to allow supervision of offenders who have served short prison sentences; we very much support those proposals. We also very much support all efforts to reduce reoffending. We will be talking about changes to the way that drug use, for instance, is monitored. We are very keen to engage with that and to support the Government in those measures. However, these changes are fundamental to the introduction of the further changes, and we think there are many other ways the Government could have gone about introducing these welcome new measures. It is a shame that we have not had a chance to put those to the test and to debate and improve them, and perhaps arrive at something we could all support.

Paul Goggins (Labour, Wythenshawe and Sale East)

Can my hon. Friend say a little more about amendment 51 and the idea that there should be no alteration of reform to contracts with probation trusts? That takes us to the very heart of this issue, because it is the probation trusts that have the funding relationship with the Ministry of Justice and, in turn, commission services for their area. This would be a huge change. Can she say a little more about what she has in mind by inserting the word “contracts”?

Jenny Chapman (Labour, Darlington)

We perhaps should have started with a full debate on the reform of the probation service more generally. We would like probation trusts, through their contract with the MOJ, to be responsible for delivering services in whatever locality is deemed fit, and for them to be measured and managed far more robustly than in the past. Perhaps there would be fewer of them, they would be larger and there would be some reorganisation. I know the Minister will rely on the Offender Management Act 2007 to justify his decision not to lay any plans before the House, but at the very heart of that Act was the establishment of trusts. To use it to abolish trusts seems to us—

Jeremy Wright (Conservative, Kenilworth and Southam)

Does the hon. Lady recognise that the power to do exactly that—to abolish probation trusts—is included in the Act?

Jenny Chapman (Labour, Darlington)

The Minister knows that that was not the intention behind the Act, and that its intention is significant and will be subject to judicial review, as taken up by Unison and the National Association of Probation Officers. I look forward to that, because I think the Minister is wrong.

The Government are determined to paint the Labour party and any other critics of these reforms, of which there are many, as supporting the status quo and standing in the way of rehabilitation. I want to make it very clear at the outset that this is not a debate about the ends the Government claim to have. We all want to see improved reoffending outcomes and fewer victims of crime.

Jeremy Wright (Conservative, Kenilworth and Southam)

Before the hon. Lady moves on, will she give way?

Jenny Chapman (Labour, Darlington)

I will, because I think I know what the Minister is going to say.

Jeremy Wright (Conservative, Kenilworth and Southam)

The hon. Lady may well know, but I am afraid I am going to say it anyway. May I quote to her section 5(1) of the 2007 Act? It states:

“The Secretary of State may by order—

(a) establish a probation trust for purposes specified in the order;

(b) alter the name or purposes of a probation trust”

or

“(c) dissolve a probation trust”.

I was interested in what she said about a judicial review, but I am not entirely clear what she means. Is she suggesting that she would support a judicial review of legislation that her party passed while in government?

Jenny Chapman (Labour, Darlington)

As I have made clear, not just this morning but during an Opposition day debate and on Second Reading, the intention behind section 5 was to deal with a failing trust, so that the Secretary of State can deal with an organisation that is not delivering. That was made very clear back then in the Minister’s response to an intervention from the right hon. Member for Dwyfor Meirionnydd.

It was a huge concern at the time that the 1997 Act should not be used to the ends the Government are now seeking to use it, and that is at the core of our argument with the Government today.

Paul Goggins (Labour, Wythenshawe and Sale East)

I know that the Minister and the Justice Secretary have made much of the ability to abolish as well as to create trusts, and my hon. Friend has given a clear explanation of why. May I draw her and the Committee’s attention to remarks made by my right hon. Friend Baroness Scotland of Asthal in Committee during consideration of the Offender Management Bill? She said:

“In practice, although some services will be commissioned at a national and regional level, where it makes sense to do so, the great majority will be commissioned from lead providers at the local level, who in most cases will be the public sector probation trusts.”—[Official Report, House of Lords, 16 May 2007; Vol. 692, c.183.]

It could not be clearer than that, could it?

Jenny Chapman (Labour, Darlington)

That explains fully the contrast between what was intended and what we are faced with today. I want to remind the Committee that this is not an Opposition clause. The Labour party did not dream it up to be awkward. It was tabled by the Cross-Bench peer and former chief inspector of prisons Lord Ramsbotham, and was supported by every Cross-Bench peer present for that vote. I do not know when else that has happened.

Serious concerns about the Government’s reforms have been raised from many quarters, and the Government should take them more seriously than they have done so far. It was disappointing that the Justice Secretary did not stay for the debate in the Chamber. It would have been helpful if he had stayed, and it would have given a better impression of him, because many people are extremely concerned about what he is attempting to do. When Lord Ramsbotham introduced the amendment, he said:

“many of us are deeply alarmed at the absence of detail about”

the cost of the proposals

“and whether they can be implemented in the timeframe”.

I will come back to the timeframe in a minute. He said that he was concerned because the Government’s impact assessments are inadequate, and listed a few of the risks that appear in the Ministry’s risk assessment.

I would love to have seen the risk register, but I have not. I have been told that it states that there is an 80% chance of

“an unacceptable drop in operational performance”.

I have not seen the document myself, so I want to know what that means. My local probation service does a very good job of keeping the public safe, preventing reoffending, monitoring offenders and recalling them to prison. An 80% drop in operational performance in that kind of work would be quite frightening.

That document that I have not seen also says that:

“There is a 51% to 80% likelihood that affordability objectives for the reforms cannot be demonstrated or met”.

I think that does not mean that they are not going to achieve their savings, but that they cannot afford it and they do not know how much it is going to cost. Perhaps the Minister can explain exactly what a 51% to 80% risk that the affordability objectives of the exercise cannot be demonstrated or met means. The Government are not able to assure us of the affordability of the proposals, and they cannot tell us how much the contracts will cost. It is reasonable to expect to be furnished with that information before we decide to agree with the proposals.

Lord Ramsbotham concluded that the Government had so far failed to prove either the value or the viability of their plans, and that noble Lords could not be asked to rubber-stamp a Bill while there

“are far too many doubts about the viability and affordability of the method the Government have chosen to achieve the proposals”. —[Official Report, House of Lords, 25 June 2013; Vol. 746, c. 659-662.]

Again, he was talking about the method, not the ends. We are happy to support the Government’s ends, but the means by which they seek to achieve them cause us great concern.

Gareth Johnson (Conservative, Dartford)

I have repeatedly heard the Opposition say that they support us in working with short-term prisoners, but they have failed to say how they will do that. They oppose our tendering out proposals, but they have not said what they would put in place to enable them to work with 50,000 extra clients in the probation service.

Jenny Chapman (Labour, Darlington)

Had the hon. Gentleman been there for Second Reading, he might have heard us talk about some of the things we would put in place. Perhaps he was with the Secretary of State. If these proposals had been laid before Parliament properly, we might have had more opportunity to provide those answers. However, I will concede that my party in Government established probation trusts, and I do not believe—I say this while there are former Ministers here—that they were as actively managed as they could have been. The situation now is that all trusts are performing to “good” and “excellent” standards, and they are all achieving the targets in a context of falling budgets, but we decide that now is the time to abolish them and not to ask more of them. There are trusts already providing such services to offenders serving short sentences. They are doing it now. They are not funded to do it, they are not required to do it, but they are doing it now because they believe that it is the right thing to do. If we were in government, we would be asking a lot more of probation trusts. That answers the hon. Gentleman’s question.

Sarah Champion (Labour, Rotherham)

South Yorkshire probation trust is consistently judged to be “outstanding”. It has questioned why it could not have been asked to tender or come up with proposals for these short-term contracts. It seems to make sense, when the trust is doing a very good job already, that it be asked to extend its terms.

Jenny Chapman (Labour, Darlington)

I am grateful to my hon. Friend. I have not visited every probation trust but I am well on the way and every trust chief executive I have spoken to has said, “Please, challenge us to do this job; we want to do it and we will do it in existing budgets”. The Minister shakes his head. If he doubts the credibility of their offer, he needs at least to examine it properly and to bring it before this Committee so that we can debate it fully as part of the Bill. It is disappointing that the only reason we are having this conversation is that we have tabled this clause in order to be able to raise these points.

Jeremy Wright (Conservative, Kenilworth and Southam)

The proposal that the hon. Lady makes, which is that we pay for the additional 50,000 out of existing probation budgets is very similar to the custody-plus proposals that Labour was making throughout the mid-2000s, but by 2010 had concluded was unaffordable. Can she explain how what she is proposing now would be afforded?

Jenny Chapman (Labour, Darlington)

Trusts were a new thing and had not been established. They are now well established, they are probably one of the best managed parts of the public sector, they are achieving everything that they are being asked to do despite falling budgets and they are saying that they want to do this work. I take that seriously. I also take it seriously when I ask them, “How can you afford it?” and they say, “Look around you. I am in a very expensive office in the centre of Birmingham, I want to co-locate with local government, with the police, but I am not able to make those decisions because I am controlled from Whitehall. I am not able to make decisions about my IT contracts or maintenance to my buildings. I am not able to take out contracts with providers of longer than a year and I am not able to carry forward a budget surplus”. All these issues have prevented trusts from being able to perform at an even better level than they have done so far. The Minister is really missing a trick.

Elfyn Llwyd (Plaid Cymru, Dwyfor Meirionnydd)

To introduce one other factor into the mix, later in the proceedings we will discuss amendments to do with discretionary application of the supervision. In other words, when an offender has come to a reasonable position, it will be possible to go back to the court and have that order determined early. That will save a lot of money and will be necessary and entirely appropriate in many cases. Therefore, the simple assertion that these 50,000 will do the whole term seems to me to be pumping up the bill just to make it unaffordable.

Jenny Chapman (Labour, Darlington)

It would be nice to find out. It would be a really good idea for the Government to lay their plans before both Houses of Parliament so that we can give these issues the consideration they deserve. We think that they are viable. The Government clearly disagree but we will never have the opportunity to find out.

Mark Prisk (Conservative, Hertford and Stortford)

The hon. Lady says that she would achieve affordability through these organisations being able to reduce their costs. Will she therefore confirm that and put it clearly on record so that they can understand that a future Labour Government would make no additional financial contribution?

Jenny Chapman (Labour, Darlington)

We inserted this clause into the Government’s Bill to enable us to debate the sell-off of the probation service. That is why we are here. Should I ever be a Justice Minister, it would be highly unlikely that I would be able to go to the Chancellor of the Exchequer and ask for lots of money to spend on probation services, given the context we are about to inherit. It falls to the Government to defend what they are trying to do, which we think is wholly unnecessary, dangerous and damaging. It is absurd to suggest that we can have a meaningful debate on this service without discussing who, how, where and when, and at what cost the service will be provided, but that is exactly the situation the Government are putting us in.

The Government have been trying not to have a debate with us on this issue, but their plan is to introduce completely inexperienced providers. We have no objection to new providers coming into the market, but we object to a 10-year—or 10-year-plus— contract, as experience shows us that it will not be especially well managed by the Ministry of Justice. The programme will be rolled out at a completely unrealistic speed, but perhaps the Secretary of State is hoping that if he moves fast enough, no one will notice. That is probably the way he looks at it, but I am afraid we have noticed.

Paul Goggins (Labour, Wythenshawe and Sale East)

Before my hon. Friend zooms off at the speed at which Ministers are pursuing their reforms of the probation service, may I bring her back to the important issue of cost? Government Members are quite right to challenge the fact that although custody plus was our policy when we were in government, we never delivered it, but we did not deliver it because it would have cost £194 million a year. At least that was an honest position, but the Minister is asking us to believe that for the same price that he is currently paying for 150,000 offenders who are supervised by the probation service, he can add on the extra 50,000 offenders whom the Bill will cover. Does not suggesting that that can be done at no additional cost strike my hon. Friend as a rather disingenuous position?

Jenny Chapman (Labour, Darlington)

Far be it from me to say that the Government are being disingenuous, but it just does not make any sense to us. We do not see how this process will work, and we really regret the fact that we are being asked to agree to it without proper scrutiny. My right hon. Friend speaks with a great deal of experience. He clearly shared the Minister’s aims when custody plus was devised, and it was hugely regrettable that the Government removed custody plus from the statute book through the Legal Aid, Sentencing and Punishment of Offenders Act 2012, which I remember voting against. The Government are now trying to introduce something similar, but in a very odd way.

The Government appear to have made this up as they have gone along. They have introduced various models, layers and rules. They have been thinking on their feet, because the Secretary of State made a conference speech in which he said that this process was going to be carried out and civil servants have been furiously trying to backfill to meet that commitment. Hon. Members described the risks of the policy on Second Reading. The Chair of the Justice Committee, the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith), summed the position up well when he said:

“there is plenty of scope for…concern over the mechanisms that the Government are setting up, the timings and the unlimited nature of the Bill.”—[Official Report, 11 November 2013; Vol. 570, c. 678.]

Elfyn Llwyd (Plaid Cymru, Dwyfor Meirionnydd)

In fact, so great is the concern of the Justice Committee that the Minister and a colleague will be giving evidence to it tomorrow about the proposals, about which even that Committee has been left in the dark.

Jenny Chapman (Labour, Darlington)

It is a real shame that the Justice Committee has not been able to make a contribution regarding the reform of such an important service before it begins. The Government are losing out on the benefit of a huge amount of expertise from that Committee.

I turn now to the details of our concerns. One of the reasons I am extremely concerned is that this is untested—it is that simple. The Secretary of State does not know that his plans will work because he has not seen fit to test them. The Government might just roll their eyes as they listen to us going on about evidence-based policy, but some of us are not happy just to believe in the Secretary of State’s hopes, fancies and ambitions. The Government say that their policy will reduce reoffending, but that claim is not backed up by any analysis of how, by whom or by how much, because there is no evidence for it. We do not know how well it will work, or if it will actually make the situation worse. We are told that success is guaranteed because providers will be paid only by results. That sounds great, but we know that the majority of the service fee will be paid up front with no link to performance whatsoever.

I am sure that the Minister is bored by this, but I have repeatedly pushed him to explain exactly how much of a contract will be paid by results, and how much will be paid anyway, yet we have never had an answer. I think that when we all started looking at PBR in this sector, we anticipated that perhaps a third of the value of the contract would be held back and paid only if an organisation met its targets. Although there would still be queries about cherry-picking and how performance would be measured, that approach would be difficult to disagree with. Given where we are now, it looks as though that amount could be as little as 10%, 8% or 3%—who knows? My faith in PBR is rapidly declining.

Andrew Slaughter (Labour, Hammersmith)

My hon. Friend makes an interesting point. The Bill links a good idea—the supervision of short-term offenders—with the bad idea of destroying a public service. The linking factor is payment by results. Of course, we know the notorious companies that tend to acquire such contracts, so it would be interesting to know how much discussion there was between the Government and those providers before the proposals were devised. Has the totality of the proposal been put together to please the G4Ss and Sercos of this world?

Jenny Chapman (Labour, Darlington)

My gut instinct is that it probably has. I meet the private providers on occasions—at round table events and so on—and they are not a bad lot. I do not claim that the public sector has a monopoly on values or impeccable performance, and I am happy to say that some good work is being delivered by private providers. However, they were clear with me that they would not be happy to take part in a process whereby the PBR part of the contract represented a large element of the total value. They are looking for single-figure PBR contracts, but I do not think that that is what hon. Members want to see.

Jeremy Wright (Conservative, Kenilworth and Southam)

Will the hon. Lady give way?

Jenny Chapman (Labour, Darlington)

I will give way; I am fascinated.

Jeremy Wright (Conservative, Kenilworth and Southam)

I am sure that the hon. Lady will have spent time at round tables with the voluntary sector. Will she confirm that they say to her what they say to me: they are concerned about substantial percentages for payment by results, as opposed to fee for service, because they worry that it may exclude them from this kind of activity?

Jenny Chapman (Labour, Darlington)

The other thing that voluntary sector organisations have been busy doing is, quite sensibly, developing partnerships with the large private sector companies such as G4S and Serco. However, those partnerships are very uneven, and I wonder what might become of some of those projects should the Ministry of Justice prevent G4S and Serco from taking part in providing these services, as has been the case with prisons.

Lorely Burt (Liberal Democrat, Solihull)

I am intrigued by what the hon. Lady is saying. I would certainly be concerned if the Government contracted with any organisation that was under investigation for allegations of fraud. What is the Opposition’s position on that? She rightly says that voluntary organisations are looking at partnering possibilities, but is she saying that perhaps we should not go ahead with any prosecutions to enable those partnerships to take place?

Jenny Chapman (Labour, Darlington)

That was a helpful intervention, and I should make it clear that we would not be at all happy with the services being provided by any organisation, from whatever sector, that was under criminal investigation by the Serious Fraud Office. The Minister has given assurances in the past that no organisation that is under investigation will be awarded these contracts.

I think that at least two investigations are taking place, and the one that concerns me—and, I think, the hon. Lady—is the criminal investigation that the SFO is conducting. I understand that SFO investigations can run into many months, if not years, but I have not had an assurance from the Minister that a SFO investigation must be completed before any such organisation can be awarded a contract. That is at the core of our concerns about this measure. We do not want organisations that could have a criminal record to be delivering services when a probation officer with a criminal record would not be able to do so.

Sarah Champion (Labour, Rotherham)

Surely one concern is about the situation if the big players under investigation are taken out and the probation trusts are not allowed to tender. A colleague at a provider meeting told me that the companies left would be those such as Eddie Stobart and McDonalds, which makes a mockery of the contracts. Who is available to take them on?

Jenny Chapman (Labour, Darlington)

My hon. Friend gets to the heart of the matter. The Minister could find himself in a sticky situation, because it may not be possible—for good reasons—to award the contracts to the people he really wanted to take them. The big unanswered question is: who else can take them? I would be happy to take an intervention from the Minister if he could help to shed some light on that. Obviously he cannot.

Elfyn Llwyd (Plaid Cymru, Dwyfor Meirionnydd)

We have hit on an important subject. I am sure that new clause 8—it is starred today, but it will become unstarred later this week—will avail us of a good opportunity to look into it in great detail and allow the Minister to explain his exact thinking.

Jenny Chapman (Labour, Darlington)

I look forward to that. Perhaps the Committee will hear more detail than we have been able to get in our debates so far. The key point is that there has been no testing or piloting, so we do not know what might go wrong. Things will go wrong but, through testing and piloting, one can learn how to fix as one goes.

The Minister not only was uninterested in starting pilots, but actually scrapped the two that had been commissioned. I visited those pilots as they were being established and I was quite impressed. The people leading them were dynamic, enthusiastic and entrepreneurial, and they wanted to do things differently. I felt sad for them when they were told that they could not continue with that.

The Government believed that the pilots were necessary when they set them up. The then Minister, the hon. Member for Reigate (Mr Blunt), said that the pilots were “groundbreaking” and that they

“will for the first time test how real freedom to innovate, alongside strong public, private and voluntary sector partnerships, could drive significant reductions in reoffending by those serving community sentences.”

Those were important words; the ones that really counted were “test” and “could drive significant reductions”. He was not so arrogant as to believe that he knew the answer. He was happy to test, and we were happy to support those tests. I had looked forward to seeing the results of the pilots. I was happy for the results not to be fantastic straight away, but to support them anyway, because I know how difficult it is to deliver such things and how mistakes need to be made so that we can learn from them. However, we will not have that opportunity now, because the pilots were cancelled.

The Secretary of State keeps referring to the Peterborough pilot commissioned by the Labour Government and to the Doncaster pilot to cover up the fact that he has not tested these plans at all. Peterborough and Doncaster are not pilots of probation services; Peterborough’s is voluntary; both are prison based, rather than community based; and neither has concluded. When the earliest reports came out, both were failing to meet their targets, but even so, we support them because we understand that mistakes will be made along the way. It is fortunate that Peterborough and Doncaster are just pilots—when we speak to the people delivering them, they tell us how glad they are about that. They tell us that partnerships have developed and that things have gone wrong and been put right. They are pleased they have had the opportunity to work in quite a small context, because they would not have wanted the scheme to be rolled out nationally without the testing and the piloting.

The Committee does not need to take my word for it. The Government saw the need to set up separate pilots to test their ideas on probation, but they have since decided to cancel them. We really do not understand why they made that decision. As my right hon. Friend the Member for Wentworth and Dearne (John Healey) said on Second Reading, the only thing that has changed since the introduction of the pilots is the Secretary of State. The Secretary of State has not explained why he decided to plough on regardless and not to continue with the important learning process he could have benefited from as part of the pilots.

Andrew Slaughter (Labour, Hammersmith)

My hon. Friend is absolutely right that the Secretary of State rushes ahead like a bull at a gate, with the consequence that he has to make embarrassing U-turns. I can think of three issues on which he has made a U-turn in the past three months: raising small claims limits; price competitive tendering in legal aid; and, most relevant to today’s debate, the privatisation of prisons. Is the Minister, who is a much more considerate individual, not perhaps thinking that this is another terrible error of judgment in the making and pull back before another terrible mistake is made?

Jenny Chapman (Labour, Darlington)

We live in hope. Reasonable though the Minister is, he is doing a job of work for the Secretary of State. We wish him well in his career, but it is a shame that he has been given this task.

Without piloting, and in the time scale proposed by the Justice Secretary, this untested model will be rolled out at breakneck speed into every region—everywhere will have to deal with this at the same time. There will be teething problems—when are there not? There will be IT glitches. Any serious failures in communication in the new risk model will have to be dealt with on a national scale. There is no opportunity to refine or improve, and no guarantee that the system will operate to a high standard when it is rolled out.

There are plenty of precedents for mistakes being made when initiatives are rolled out quickly. Universal credit had to be slowed down to walking pace to deal with serious management issues and IT failures. So as not to be partisan, I should say that the Labour Government had their fair share of blunders—policies that sounded great and had fantastic aims everyone agreed with, but that did not quite work out as planned. Individual learning accounts are an example: the aim behind them was great, but they did not quite work out as planned and they were subject to a high degree of fraud. That happened because they were introduced at breakneck speed, without enough scrutiny or sufficient piloting. The Minister should learn not just from his own mistakes, but perhaps from some of ours as well. We are happy to learn from them.

Andrew Slaughter (Labour, Hammersmith)

I agree with my hon. Friend up to a point. She mentioned universal credit, which my local authority is piloting in London. The pilot is in such chaos, and the roll-out is going at such a pace, that just seven benefit recipients have been affected in the first weeks. The programme has, in effect, been abandoned until after the election because it is such a catastrophic failure. The danger of pursuing the same route here is that it will create huge uncertainty, chaos, indecision and low morale. If the Government take the alternative route, and slow down these proposals, they will simply confuse us all The only way this will be resolved is by following what is in clause 1 and abandoning this privatisation proposal.

Jenny Chapman (Labour, Darlington)

What my hon. Friend says about the experience of universal credit in his constituency should alarm the Government. He is in good company when he agrees with the National Audit Office and the Public Accounts Committee. The PAC Chair said,

“Pressure to deliver a programme of this magnitude within such an ambitious timescale created a fortress culture where only good news was reported and problems were denied.”

There is clearly a parallel here—we do not want that to happen to our probation services. Universal credit messed up, the Work programme not working properly, pensions mis-sold—those are the results of the Government running at breakneck speed. Those are serious consequences, though not usually as serious as can be expected from a probation service not working as it should. What will an 80% drop in performance mean? Will it affect public safety and lives? What is it? We do not understand what that means.

Sarah Champion (Labour, Rotherham)

In the examples given by my hon. Friend, there was a back-up plan—there was a system still in place, in the example of universal credit. In this situation the probation trust will be gone and we will have nothing in its place. That is obviously much more dangerous.

Jenny Chapman (Labour, Darlington)

That is a fair point. The Government have not said how they would deal with failure of a provider. I am thinking of Southern Cross, whose head office was in my constituency, so I followed that case closely. No one had anticipated the failure of a large provider of adult social care services. Members will recall the huge panic about how it would be dealt with, who would step in, how much it would cost and what it would mean, most importantly for residents of the care homes. What plans does the Ministry of Justice have for dealing with financial or any kind of failure of one of the providers, perhaps resulting from a criminal investigation? Those are important questions and we have had no assurances from the Government. There are no clear plans about how they would deal with that kind of situation.

The Prime Minister believes that

“The Secretary of State and the Department are doing exactly the right thing in rolling this out in a progressive way and in a way that allows us to learn lessons as we go.”

I think he must have been a bit mixed up, because that is not what the Department is doing at all. It is a pity that he has not had a chance to sign the Justice Secretary up to his view about learning as we go. The speed at which the upheaval is being pushed through is a serious concern. The clause is designed to build time into the process for evidence gathering and scrutiny, and to extend the time available to make the changes safely. If the Government are hellbent on proceeding in this way, at least let it be to a responsible, considered timetable.

The Minister has said that he will not apologise for moving quickly and the Justice Secretary has suggested that opposition to the pace of change is irresponsible to victims of crime, but it is not responsible to sign on the dotted line for an uncertain programme to be rolled out at unrealistic speed. Rushed change is not the same as effective reform. If the Government get it wrong, the risk is unacceptably high. We can all name half a dozen projects that have gone wrong. In the light of that experience, we think the Government should consider more carefully the argument about the rushed timetable.

Gareth Johnson (Conservative, Dartford)

Will the hon. Lady not accept that the proposal enables us for the first time to work with short-term prisoners? No other Government have achieved that. The Opposition, who say that they support working with short-term prisoners, are trying to find any opportunity to frustrate it. Is that not irresponsible opposition?

Jenny Chapman (Labour, Darlington)

No, it is irresponsible government to push it through. We support supervision of short-term prisoners, which is why we brought in provisions to allow it to happen, but trusts are already doing it off their own bat. That is our point: we want trusts to do more and we would be more demanding of trusts in getting them to do the work that some, to their credit, are already doing.

Andrew Slaughter (Labour, Hammersmith)

I am sure that my hon. Friend and other Members can enlighten me: did we just hear a Government Member say that the probation trusts are being offered as a sweetener to private companies, to induce them to take on the short-term prisoners? That seems to be what is being said. If the hon. Gentleman was not saying that, I am sure that he will correct us, but that is what I heard.

Jenny Chapman (Labour, Darlington)

I shall not answer for the hon. Gentleman, but I am happy to act as a conduit if he wishes to respond.

On the question of the timetable, the operating model was published only in September and today is our first proper opportunity to debate it. The trusts are supposed to be abolished by April, but as of a couple of weeks ago, probation officers that I have spoken to—I speak to them almost daily at the moment—had still not seen the new IT systems and did not have a huge amount of confidence in the IT that will be provided for the project. They say of the recently introduced system that if, for example, they enter an offender’s new address on a Friday, the information has not been retained when they come back on a Monday. That is worrying enough when one organisation deals with an offender, but when many organisations potentially deal with the same offender, sharing information and reliability of those systems are crucial. It is not for me to have confidence in that, but I can assure members that practitioners in the field have very little confidence that it will work.

The May 2015 deadline for completing the project was probably not just plucked out of the air by the Secretary of State. The Chair of the Justice Committee has said that,

“there are significant risks in the pace at which the Government intend to implement the programme”.—[Official Report, 11 November 2013; Vol. 570, c. 682.]

Ministers’ own officials have described the timetable as aggressive. In the past couple of months, three probation trust chairs have taken the bold step of writing to the Secretary of State to advise him to delay his plans or risk inevitable public probation failures—a euphemism for more crime and more victims of crime. The chairs of Derbyshire, Leicestershire and Warwickshire probation trusts have, in turn, warned that the time frame is risky, unrealistic and has serious implications for service delivery. They are prepared to stick their heads above the parapet; privately, many more express exactly the same concerns.

If the Justice Secretary is convinced by the quality of his Government’s performance and their chances of being returned to office, he should not be so concerned about the 2015 deadline and binding the hands of the next Government. Although the Secretary of State apparently believes that one does not pilot a revolution—that is what he said—Members of both Houses are not alone in recommending intelligent piloting and a phased roll-out. That is what we would like to see and what we were happy to give our support to.

Members of the Committee will be aware of the “inglorious saga”, as it was memorably christened by the right hon. Member for Berwick-upon-Tweed, of the Ministry of Justice’s language service contract. Following the train wreck that was the Department’s procurement process, the PAC reported that:

“The Ministry did not conduct a proper pilot or a phased roll-out to ensure a smooth transition”.

Again, the Government failed to learn from experience. The PAC recommended that:

“The Ministry should draft and implement future contracts so as to minimise transitional problems, for example through piloting and rolling-out new systems gradually”.

It really is quite straightforward. The NAO reported that the Ministry had underestimated the risks when it switched to a national roll-out. It allowed the contract to become operational before it was ready. A steady regional roll-out

“would have allowed the Ministry to limit the effect of poor performance or other ‘teething troubles’…and also to pause the rollout if performance was…bad.”

That is quite straightforward advice from the PAC, and the Government paid no attention to it.

When performance is poor, as it has been after the roll-out of the Work programme, the outcome is serious. If the performance of a provider is poor while it is responsible for managing dangerous offenders in the community, the risk is unacceptable. It is disappointing, to say the least, that the Government seem not to have learned recent lessons, and that they are not doing all they can to ensure a safe, smooth continuation of the service as they implement the change.

Mark Prisk (Conservative, Hertford and Stortford)

On a point of order, Mr Robertson. The hon. Lady has spoken for an hour. The amendment is important, and is quite a tight one, but we seem to have got to universal credit, adult care services and other things. Can you guide me: are we in effect having a stand part debate?

John Robertson (Labour, Glasgow North West)

I think we will treat it as a stand part debate. There will be no stand part debate after this, so anyone who wants to speak on matters outside the amendments may do so.

Jenny Chapman (Labour, Darlington)

That is a huge shame. Debate on the clause could allow proper consideration of the Government’s measures to abolish a key part of our public services that protects the public. It is hugely regrettable that hon. Members will not be able to consider it as fully as they should. I shall continue. I apologise to the hon. Member for Hertford and Stortford if he finds the debate a little dull, but I could speak for far longer than an hour on the issue, as we are not being given the opportunity for debate that we should be able to expect. What the Government propose is very risky.

There are more pressing areas of concern. The Government would like to dismiss talk of risk as scaremongering, but the service we are talking about manages risk to the public. The Government’s plans begin by inviting inexperienced providers to participate and by splitting provision in two. I want to discuss how the Government intend to apportion offenders according to their risk category. Risk will be established using a new risk-assessment tool, but—this is also worrying—we have not seen it, and practitioners do not yet know how it will work.

“Risk” is a term that gets used a lot in debates, and not always in a well-informed way. Risk is a combination of factors: it is an indication of how imminent the risk of harm is, and how serious the consequences of reoffending might be. It is not simply a measure of the seriousness of a person’s offence. It is possible for someone to be a medium-risk offender when they have committed very serious offences.

Most importantly for the purposes of the debate, risk is not static: it fluctuates according to an offender’s circumstances. Low risk can become high risk the instant a person consumes alcohol, for example, or when a relationship breaks down. The Ministry of Justice does not really have figures on that, but at least 25% of offenders change their risk category during the period of their order. In addition, they do not change just once. An offender can change risk category many times because of unpredictable circumstances.

That could mean that responsibility for monitoring an offender would switch many times during the order period. Each time that happened, there would be a likelihood of something being missed, or of some information not being passed on. We know from problems that occur in safeguarding children that lapses in good communication can have catastrophic results.

Jeremy Wright (Conservative, Kenilworth and Southam)

The hon. Lady is right that this is an important issue. I would like to help the Committee on the specific question of whether there will be multiple transfers backwards and forwards, which was also raised on Second Reading. The position of our reforms is that, if somebody moves from being a medium-risk offender to a high-risk offender, the management of that offender will move from the CRC to the national probation service. I know the hon. Lady appreciates that, but I would like to reassure her and the Committee that, if that person’s risk profile changes back to medium risk, they will not move back to the CRC but remain with the national probation service, so there will not be the multiple changes she is worried about.

Jenny Chapman (Labour, Darlington)

That is helpful and I am grateful to the Minister for making it clear, but it has not been clear up until now.

Jeremy Wright (Conservative, Kenilworth and Southam)

I said it on Second Reading.

Jenny Chapman (Labour, Darlington)

The Minister may have said it on Second Reading, but it was not clear, and probation officers are certainly not clear that that is the case. He is again doing himself a disservice in not taking his time with the proposals. Such an important piece of information is not out there and well understood by probation officers. The switch of responsibility will still occur. I am pleased to hear that it may not happen repeatedly, but it will still happen when something in an offender’s life has escalated their risk level. That is the point at which they are very vulnerable to committing a further offence, and the exact point at which their supervisor and the organisation responsible for them will change. That is a major weakness in the Government’s proposals.

After years of evidence that joined-up working is most efficient, the Government plan to split the high and low-risk services, which we see as institutionalising a gap in the system. The chief inspector of probation has warned:

“Any lack of contractual or operational clarity between the public and private sector…will…lead to systemic failure and an increased risk to the public.”

That is the point that most concerns anybody working in probation. They know how important it is to have excellent communication with colleagues and sharing of information with other agencies such as the police. It has taken a long time to make partnerships with the police and other organisations good, although, as things stand, such partnerships are not good everywhere, every time. How much harder will it be when an unknown organisation—possibly G4S or Serco—pitches up, with all the surrounding anxiety for probation officers? In that context, how much more difficult will it be to build a relationship of trust between practitioners? That is the nub of the issue for most people working with offenders. They are deeply concerned about the transition and want to know what the Government are going to do to ensure that there are no difficulties at that point. Again, because of the lack of scrutiny and the lack of an opportunity for debate, the Government are not giving themselves the opportunity to reassure not just the Committee, but people out there working with offenders.

Sarah Champion (Labour, Rotherham)

My hon. Friend mentions collaborative working. In Rotherham, we have a very successful impact team that is co-locating the police, the probation service, the drugs team and the housing team. They are clear that that dynamic will, if privatisation goes ahead, be completely blown apart, not least because a private organisation will suddenly be present. They do not believe that the sharing of information or the trust and support they are able to give to an individual will be able to continue.

Jenny Chapman (Labour, Darlington)

I thank my hon. Friend. I have heard exactly the same comments from trusts all over the country. The Minister should know just how anxious probation officers and the chief executives of trusts are about that. We have not had any reassurance from the Government that the new arrangements will run smoothly.

Another cause of huge concern—Members have expressed displeasure in previous debates—is the record of the Ministry of Justice in procuring the kinds of services we are discussing. The procurement process for the language services contract, to which I briefly referred earlier, was described by the Chair of the Select Committee on Justice as follows:

“It might almost have been constructed as a cautionary tale of what a Department should avoid in undertaking a procurement and contract management process.”—[Official Report, 20 June 2013; Vol. 564, c. 300WH.]

The Justice Committee found that the Department’s handling of the contract was nothing short of shambolic. The Department did not have an adequate understanding of the service it was tendering, it failed to heed warnings from professionals and it did not introduce sufficient safeguards to prevent interruptions in the quality of service. The Public Accounts Committee summed it up:

“The Ministry was not an intelligent customer”.

The Department has far from proved that it has the capacity to undertake and ably manage a procurement process on that scale. The Minister, to his credit, has taken some steps to improve the situation. I know he has introduced a new crack squad to manage contracts, but we do not yet know how well that will work. It is very early days, and I do not think the provision should be the first test of that new team.

In a Commons debate on the subject, the right hon. Member for Berwick-upon-Tweed assumed that he did not need to spell out that, if things go wrong in probation and in other contracted services, we would

“face a multiple-train crash.” —[Official Report, 20 June 2013; Vol. 564, c. 296WH.]

As we face a tendering process for an untested model rolled out at breakneck speed with a risk management model that probation professionals have vehemently warned against, I am not so sure of his assumption.

Although the Government claim to champion localism, the Secretary of State is being granted free rein to abolish local trusts and to choose how his Department buys services from huge multinational organisations. We will come back to that again and again, but the same usual players are developing a monopoly in public service provision. We have deep concerns about that.

The Government’s plans promise that expertise will be added into the mix by smaller voluntary and third sector organisations, but we have heard all that before. I accept that some probation trusts have not been as proactive as we would like in working with third sector organisations and voluntary groups, and I would support measures that require them to do so, but the measure is completely the wrong way to go about it. After billing the Work programme as an opportunity for small, specialist organisations, the majority of contracts were given to large corporations. Charities found themselves squeezed out and underpaid. It has become a common phrase, but the charities were used as bid candy. The Opposition and the charities are mindful of that.

The National Council for Voluntary Organisations states that, under the Government’s biggest public service reform so far, charities have been

“squeezed out by large commercial providers.”

The NCVO also states that charities have been

“shut out by the very large scale of contracts”.

At the first report stage of the Work programme, every single provider was failing to meet its targets. That was a disaster for the Work programme, but how big a disaster might it be in respect of the supervision of offenders in the community?

In the criminal justice sector, two companies are between them contracted to provide tagging, community payback, prison operations and prisoner escort services. The two companies are failing ably to deliver all their contracts and have admitted to overcharging the taxpayer. The companies have even offered to pay back millions of pounds—in a credit note, of course—and are being investigated for fraud.

At a PAC hearing last week, the chief executive of G4S said that he did not think the company had known the difference between right and wrong, which is extraordinary for a company that wants to supervise offenders. Will the Minister tell us whether the Government will prevent G4S and Serco from bidding for the contracts—I bet he will not—until the Serious Fraud Office has completed its investigation? That would go a huge way to allay some of the fears out there in the sector.

Will the Minister update the Committee on what effect—hypothetically—the withdrawal of the companies would have on the ability of the Government to deliver the plans? They seem to depend heavily on the involvement of these large companies. I am not sure that the plans could go ahead in the timetable envisaged were those lead organisations not to take part. As I mentioned earlier, partnerships have been developed with the voluntary sector, which has assumed, like everyone else, that G4S and Serco will be well placed to take on the contracts.

Alex Cunningham (Labour, Stockton North)

I am sure my hon. Friend is aware that Government Ms and their probation trusts will see the transfer of some 75,000 low and medium-risk offenders—sex offenders, domestic violence offenders, robbers, burglars and all manner of offenders—into the private sector, without any expertise to run services that are untried and untested. Is that not a concern for Government Members?

Jenny Chapman (Labour, Darlington)

If it is not, it should be. My fear is that it is not. We do not know whether G4S and Serco will be involved or who will be conducting the supervision of offenders. We do not know how or even whether they will be trained, or how they will be supervised. We do not know what qualifications or experience they would be expected to have, or what level of decision-making responsibility they would have. That is causing a huge amount of anxiety in a profession that is supervising people in the community right now.

The Government could benefit from slowing down and having a proper pilot. Crucially, they should allow proper parliamentary scrutiny of the proposal. I have been an MP for only three years, but I do not remember a time when a Government have got away with such upheaval without bringing anything before Parliament. It is extraordinary that they have attempted to do that. I am grateful to the other place for inserting the clause, without which we would quite rightly be ruled out of order for trying to discuss some of the means by which the Government intend to implement their reforms. I have made clear our objections and our reasons for objecting, and I urge hon. Members to support the clause.

Elfyn Llwyd (Plaid Cymru, Dwyfor Meirionnydd)

I agree with everything that the hon. Member for Darlington has said. It was quite a performance and she took her time, but she was right to do so, because the clause is clearly a crucial part of the Bill. At the conclusion of her remarks, she referred to things said in the other place, and it is right that we should have a flavour of the debate there.

On 25 June, the noble Lord Ramsbotham began speaking to the amendment by stating:

“My Lords, as I have said on a number of occasions, this is a curious Bill. While the whole House welcomes its intentions,”—

as we do—

“many of us are deeply alarmed at the absence of detail about their cost and how and whether they can be implemented in the timeframe depicted on page 34 of the so far undiscussed Transforming Rehabilitation White Paper.”

He went on:

“Last Thursday, the Minister was kind enough to e-mail me a copy of the revised impact assessment, which I have to admit I find as disappointing as its predecessor, because it is...so thin on analysis of impact, cost or risk. I note that, yet again, the Government’s justification for not releasing more details is that to publish estimates would put contractual negotiations at risk and so prejudice the effectiveness of the competition for delivery of offender services.

Lord Ramsbotham then goes on to say:

“We all want reoffending to be reduced”.

Again, I pause to say that everybody in this room would agree with that. However, he continued:

“But we do not want to see any programme with that end fall flat on its face because understandable concerns about the viability of untried theories, in the uncertain world in which many offenders live what can only be described as chaotic and dysfunctional lives, have been ridden over roughshod in the desire to satisfy a party politically directed timetable that pays no attention to practical reality.”

He then went on to make another vital point:

“There is also the importance of taking people with you, particularly those whom you employ. Loyalty, like responsibility and accountability, is a two-way process. You cannot expect people to be loyal to you unless they know that they can rely on your loyalty to them.”

I could go on, but that in itself is a very important statement.

Lord Ramsbotham also referred to the Chairman of the Justice Committee, the right hon. Member for Berwick-upon-Tweed, who the previous week had said that the MOJ was “responsible for carrying out” these “ambitious plans” and had

“displayed naivety about the contracting out of key services and lacked the capacity to know what it was doing.”

I know the right hon. Gentleman, I have sat with him on the Justice Committee for some years and I know that he does not make those kind of remarks very often, unless he is driven by necessity to do so. Those are pretty heavy and cutting remarks.

As Lord Ramsbotham went on to say:

“The change programme that has been laid before us is far from complete”.

He then quoted officials who talked about the need for:

“undertaking further work on statutory responsibilities”,

and so on. He said:

“Surely it is a bit late for that, when work on the Bill is so far advanced.”

He went on further, but I realise that I must not quote at too great a length. However, I would like to make one or two more points briefly, because they are germane to this particular debate.

Lord Ramsbotham also said:

“It is stated that insufficient support for the reforms by probation management, staff and staff associations leads to failure to progress design and implementation to time and quality; that it is not possible to design the programme to a timescale that meets ministerial expectations and/or the coalition’s commitment to roll out payment by results by 2015; that insufficient participation by the market in competition leads to failure to secure value-for-money bids or at-risk elements of reforms; that new service and market models implemented as a result of the programme are ineffective and/or inefficient, leading to operational, financial and reputational impacts and failure to realise the planned benefits”.

He went on to say:

“To expect this House, denied a veto, to rubber-stamp the Bill at this stage is to treat it with contempt because there are far too many doubts about the viability and affordability of the method the Government have chosen to achieve the proposals to which it is related, and the impact of destroying what is in place before proper evaluation of the ability of what is proposed in its stead to do better. I therefore ask the Minister to suspend further discussion”.

Lord Ramsbotham was then very ably supported by Lord Beecham in another strong speech. Lord Beecham said:

“I do not blame officials for this, nor do I blame the Minister in this House. The blame lies with the Lord Chancellor and Secretary of State Mr Grayling, whose only reaction so far, I understand, is to have ordered a leaks inquiry.”

That inquiry was about the risk register. Lord Beecham continued:

“Lord Randolph Churchill famously described Gladstone as an old man in a hurry. The Lord Chancellor is a relatively young man in a hurry, but he, as I am sure the noble Lord, Lord McNally, would agree, is no Gladstone.” —[Official Report, House of Lords, 25 June 2013; Vol. 746, c. 659-663]

Those are the few remarks that I have to make in relation to amendment 51. I agree with everything that the hon. Lady has said and I will not retread the ground that she has very ably set out. However, in the time allowed to me, I would like to speak to new clauses 1 and 2, which I have tabled.

New clause 1 states:

“No national tendering for any probation service shall commence before any proposed restructuring of such services has been the subject of a pilot scheme which is subsequently independently monitored and the results of such monitoring laid before both Houses of Parliament.’.”

New clause 2 states:

“Any proposed restructuring of the Probation Service must first be the subject of an independently evaluated pilot scheme and the proposals should be laid before Parliament and be approved by resolution of both Houses.’.”

With your permission, Mr Robertson, I will speak to both those new clauses together.

Governments of all persuasions have a recent history of sensibly piloting new measures in the justice system before considering any national roll-out. We have seen pilots for payment by results at HMP Peterborough and HMP Doncaster, for drug-reduction schemes, for satellite-tracking, for the domestic violence 28-day prevention order, for Jane’s law and, latterly, for Clare’s law, as well as many others.

Proposals to restructure the probation service are complex, challenging, totally untried and untested. Transforming rehabilitation, probably more so than any other new initiative in the justice system, strongly suggests piloting before any national implementation. The time scale alone is so tight that it invites mistakes, miscalculations and risks to the public. The Government’s unpublished risk assessment states:

“This is a complex, large scale change programme to be completed within an aggressive time frame”.

I remind the Committee that such restructuring requires staff to be allocated into roles in the new organisations, the reallocation of up to 250,000 offender cases, the implementation and testing of the new operating model, the establishment of 21 new Government companies, the appointment of a new senior management team for the yet-to-be established new national probation service, the transfer of 18,000 staff to new employers, the allocation of 500 premises in whole or part to the national probation service or Government companies, and the re-engineering of ICT provision to enable the operation of the new entities.

There will be an operational split, so that, by April 2014, the new operating model will have been implemented within each trust, with clearly delineated operational units responsible for the public sector functions. That will be followed by a structural split to be completed by autumn 2014, when all staff will have been transferred to either the new public sector probation service or the new private companies. The probation trusts would cease to be responsible for delivering services and would start to be wound down. The timetable and programme must surely be fraught with problems. To give but one example:

“On the corporate services side the arrangements are as varied as the number of trusts and include a range from complete reliance on the Local Authority for all support services to comparatively newly purchased, stand-alone contracted services, for example for payroll and HR systems”.

The Ministry of Justice believes that there are in the region of 2,000 ICT packages, and, according to the Ministry’s own information, the

“complexity of closing down all these systems and moving to a shared services approach will present a considerable challenge”.

Those are the words of the unpublished risk assessment and not those of any union or outside body.

The risk assessment, on which I have a slightly different take, gives ratings known as a BRAG score—brown, red, amber, green. A score of 20 indicates significant detrimental effect and has roughly an 80% chance of occurring. A number of risks, disturbingly, hit the 20 mark. One states:

“There is a risk that insufficient support for the reforms by probation (management/staff/staff associations) leads to failure to progress design and implementation to time and quality”.

Another says:

“There is a risk that the affordability objectives for the reforms cannot be demonstrated or met, leading to failure to secure approvals during the programme or financial and operational risk and reputational damage to the department after implementation”.

A third states:

“There is a risk that an unacceptable drop in operational performance (during the programme) leads to delivery failure(s) and reputational damage”.

The final risk I want to highlight states:

“There is a risk that insufficient participation by the market in competition leads to failure to secure value for money bids for ‘at risk’ elements of reforms”.

We should not forget that the bottom-line risk is to the public. Such risks represent real warnings that should be heeded. At the very least, we should slow down the process, because it seems as though we are rushing to meet some political or dogmatic target that leaves everybody open to question and risk.

Paul Goggins (Labour, Wythenshawe and Sale East)

My right hon. Friend is an expert on these issues and always well worth listening to. Is not the point the fundamental risk to public safety that he mentions? Probation officers are managing the risk that is posed by offenders and those who have been offenders every day in our constituencies. The Government should be looking for innovative ways to try to reduce reoffending rates, but they should not be reckless with public safety.

Elfyn Llwyd (Plaid Cymru, Dwyfor Meirionnydd)

I agree entirely. I think everybody on both sides of the room would agree that we need to look at innovation, and the 2007 Act did that. It effectively said that probation trusts would commission various bits of work from the third sector and the private sector—from wherever the expertise lay at the time. That was absolutely appropriate. All of us believe that something should be done about the 12-month cohort—it is common ground between us—but the question is about how to do that while minimising the risk. We are currently maximising the risk, because if one or two of the elements fall down, there is no doubt that we are in deep trouble. I agree with the right hon. Gentleman about that.

The right hon. Gentleman refers to the probation service. The National Association of Probation Officers has helped me in preparing this speech. The association was led to understand that the risk of insufficient market participation has significantly increased and that, in certain areas to be contracted, there is currently no expression of interest. I do not know whether the Minister wishes to respond to that point, but that in itself should be sufficient reason for piloting rather than rolling this out.

However, there are many other problems as well. The process for assigning staff to the new organisations is highly complex. There seem to be two methods: automatic assignment and expressions of interest. Certain staff who work in discrete operational functions will be automatically assigned to the new organisations, but how can staff be expected to accept transfer when they do not know who their employer will be, what the terms of employment will be, where they will be located, what size of case load they will have, what their job description will be, whether they will lose the rights to advise the courts and parole boards, what the equality impact assessment will be, what the financial or personal health risk will be, and what will be the personal risk assessment for such a transfer? All those matters are currently up in the air which, again, bolsters the notion that we need to pause and pilot.

Jenny Chapman (Labour, Darlington)

The right hon. Gentleman hits on the point of professionals in the service. Is he as concerned as I am that there will be a group of professionals working only with high-risk offenders? Does he agree that the pressures that puts on individuals, who might not get the supervision that is needed to work in that kind of context, will lead to risks?

Elfyn Llwyd (Plaid Cymru, Dwyfor Meirionnydd)

I agree entirely with the hon. Lady’s important point. It is also the case that risk varies, as she rightly pointed out in her speech. It could vary due to numerous things, such as falling back into alcoholism, domestic violence or the break-up of a relationship. That risk could change almost immediately, but I am worried that the professional probation service will not be on hand immediately to deal with it.

Lorely Burt (Liberal Democrat, Solihull)

The right hon. Gentleman talks about probation officers working solely with high-risk ex-offenders. I have been informed that approximately 40% of the work of the probation service surrounds the assessment of risk in the courts, rather than in direct contact with high-risk offenders. Are there not programmes running under the probation trusts in which probation officers work solely with high-risk offenders?

Elfyn Llwyd (Plaid Cymru, Dwyfor Meirionnydd)

Yes, there are, but the hon. Lady might be interested to know that in her area there are no fewer than 20,988 low and medium-risk offenders, which is by any account a huge number. Are we going to entrust those offenders to people who do not have adequate training and would have to call people in to determine a change of risk? I think that there are huge problems here.

From my early years in the legal profession I have been a supporter of the probation service, which I have seen change people around and turn youngsters away from crime. I am proud to see that some of the people I defended when I was a young man are now leaders of their communities in civic offices. They would not have achieved that without the professional probation service, which spent time with them, understood them, helped them and turned them around. If we lose the professional probation service, I am afraid that we will lose a heck of a lot for the future.

The second method of assigning staff, if automatic assignment would not be appropriate, involves an expression of interest. Staff spread across certain functions will express an interest in being on either side of the divide. Such roles might include operational assistant chiefs, operational manager roles, operational offender management roles, programme tutors—for example, for sex offender treatment—and other operational staff. It might include staff involved in court duty who can be on either side of the divide. The Department will introduce sifting criteria, which have not yet been fully disclosed.

The Government state that community rehabilitation companies and the national probation service

“will need to work effectively with each other and with other partners…to achieve success in reducing reoffending”

and

“to ensure an integrated and holistic approach to rehabilitation”

and public protection. How can that happen when most staff are effectively being given no choice about where they work in the future? Will the police negotiate information-sharing protocols with the private sector providers? What guarantee will there be of confidentiality?

The Ministry of Justice admits that if, as a result of the expression of interest exercise, the job posts available are oversubscribed in either the new companies or the probation service, further sifting will take place to achieve the necessary balance of staffing in both organisations. Will that mean redundancies? Again, it removes choice, and I suggest that the best way forward is a pilot.

Alex Cunningham (Labour, Stockton North)

The right hon. Gentleman is outlining clearly the risks that are associated with the proposals of the Secretary of State—that young man in a hurry with an aggressive time scale. How would the Secretary of State lose out if he decided to have a pilot or two?

Elfyn Llwyd (Plaid Cymru, Dwyfor Meirionnydd)

That is the point; I do not see that he would lose out on anything. In fact, he would gain the credence of all the justice organisations, which are desperately concerned. The Magistrates Association, the probation service and the police are worried. The courts are worried and the Crown court judges are worried—everybody is worried. Holding a pilot would mean that the Secretary of State would be seen as somebody who is prepared to listen, ameliorate people’s concerns and take a bit of time.

All the points I have made could be ironed out with a better time scale and further discussion. What grieves me about this process is that there is unanimous support for dealing with the problem of the under 12-month cohort, which needs supervision. We are ad idem on that point. However, I am concerned, as I am sure all Opposition Members are, because we have not had a consensual approach. Why do we not put the brake on things and sit down to ensure that this is done correctly? It might take a month, or two or three—I do not know—but at this moment in time, all the points I have raised are up in the air, and there has been no clear indication of any kind of answer. That is grossly unfair on the professionals in the field. It will impact on their performance. Although they are thoroughgoing professionals, I would be concerned if I did not know where I would be in a month or two, if I would be relocated to another part of the UK, if I would be on one side or t’other, what kind of work I would be doing and whether my expertise would be completely wasted. That would affect my morale as well. Probation officers are remarkably resilient people—I have known many of them over many years—but this is taking them to breaking point.

It is uncertain what will happen to staff who are on secondment. Will they be able to return to their post when the secondment is over? What will happen to an individual if their substantive post no longer exists? It looks as though reception staff will automatically be given to the private sector unless the building in which they are located is predominantly run by the public sector, in which case they will stay put. I acknowledge that the reallocation of staff is a massive task and so a bit longer is needed to do it properly. Clearly there will be appeal procedures if staff think that the relevant method was not applied, that the process was inconsistent, that the information used to make the decision was incorrect or incomplete, or that there was any discrimination.

It is understood that everyone in the probation service has been asked to fill in a form asking them what they were doing on 11 November 2013, which will then determine which side of the divide they are likely to be on. Staff repeatedly say that all days are different—they could be dealing with a court or a hostel, or be on a prison visit or dealing with high, medium or low-risk offenders. That would all happen on different days during the week and, in some instances, at different parts of a day. To have an arbitrary cut-off point of 11 November is little short of ridiculous.

Complex sifting criteria are being introduced to determine what happens when the automatic assignment does not apply, such as when dealing with the case management and supervision of high and very high risk of serious harm cases, with multi-agency public protection arrangements work, with middle managers, with court probation officers, with probation service officers and with administrators. In those cases, decisions will be based on what individuals have been doing in the previous six-month period. That, again, is a highly complex process that must not be rushed. It is so dangerous that it cries out for a pilot scheme.

Further to complicate matters, consultation is occurring with staff on the measures that trusts or the Ministry envisage will be taken in relation to staff due to the transfer to either side of the divide. There is no formal definition of those measures, but they are generally considered to cover any changes in working practices, job functions or work location, and redundancies that the existing or new employer expects to make as a result of the transfer. All staff have to be given the right to be consulted about these so-called measures, and a number have been identified so far in the consultation: the implementation of a national agreement on staff transfer; reorganisation; shadow running; the transfer out of pension schemes; handing in of security passes and IT equipment; handover of case load, information and documentation; and the transfer of electronic data.

Things are complicated even further by the case split of the 240,000 offenders currently looked after by probation trusts. The Ministry has come up with a risk allocation tool, which is a mix of the offender group reconviction scheme and OASys, the offender assessment system. A number of factors are taken into account: the age and gender of the offender, and their previous and current offences. The offender is then given a score predicting the likelihood of reconviction. The tool will assess behaviour likely to lead to a sexual offence, but psychologists who have been consulted by staff say that that is beyond a probation officer’s knowledge base. Before the case split, information will be needed about the likelihood of the offender having contact with vulnerable adults, and there are many other questions that staff have to answer before a case is allocated.

On the basis of an individual’s score, there will be an allocation of risk. Staff will be able to expand on their answers, but that does not appear to have any impact on the score. At this point, no information is available about what will be put in place to allow information sharing, about whether bidding organisations will have proper safeguarding policies, and about how sensitive information will be stored and whether it will be secure.

To make matters even worse, there is confusion about what constitutes medium risk. NAPO estimates that half of the 150,000 cases that are likely to be privatised are medium risk, but what does medium risk mean? In essence, the medium risk offender is defined as someone who is assessed as posing a medium risk of causing serious harm to themselves or others using the probation service’s OASYS assessment tool referred to earlier. This combines actuarial measures with professional judgements made by trained and experienced staff alongside information provided through local partnerships with police and other agencies.

The medium risk group includes people who have been convicted of violence, sexual matters, burglary, and domestic violence, and some known gang members. There are two types of risk that the service assesses and monitors: risk of offending and risk of serious harm. In the Ministry of Justice's definition of risk, someone is only placed in the high risk category if it is assessed that an offence could happen at any time. If they appear to be stable they are classed as medium risk, but risk levels change on a daily basis. Risk of harm assessment in particular is much more dependent on what can appear to be small changes in behaviour. For example, if someone convicted of domestic abuse enters into a new relationship, there are issues over contact with children, increasing alcohol use and financial problems. All of these could have an impact and act as triggers causing risk levels to rise rapidly.

Sarah Champion (Labour, Rotherham)

The right hon. Gentleman talks about the handover of offenders and the triggers for people going from medium risk to high risk. Does he agree that one of the key trigger points is the loss of or change in a key relationship? For a number of these offenders the key relationship is with the probation officer, and in some instances that handover process could take up to six months, or at least is a planned and informed process at the moment, for example if a staff member is leaving or retiring. One of the concerns is that this handover is not planned, that the probation officer does not know who they are handing over to, and that it could really trigger a transition from medium to high risk in a number of offenders.

Elfyn Llwyd (Plaid Cymru, Dwyfor Meirionnydd)

I agree with the hon. Lady and I could further say that in days gone by, part of the function of the probation service was to befriend and advise. Although those are not words normally used nowadays, the purpose of a probation officer’s assistance is to back somebody up, give them a role model and give them assistance where they require it. The chemistry between the individual and the probation officer is key. The hon. Lady is absolutely right that there is a further possible flashpoint there which could implode. I certainly hope that it does not, but she is right to say that it could.

Probation staff are trained to monitor and assess changes and intervene quickly if required. Once again the complexities around risk suggest that a pilot would be the best way forward. Under the proposals, offenders will potentially be passed back and forth between agencies at the worst possible time—when they are in crisis with increasing risk. Information of a highly confidential nature will be open to huge numbers of different agencies. The scope for information being misused or lost is therefore large. Local accountability and immensely important local partnerships risk being lost. In summary, this is a highly complex, controversial, potentially dangerous reorganisation. The proposals are completely untested. I find it astonishing when the Secretary of State says, “Sometimes you have got to do things because they are right.” Who knows if they are right? Will we find out in six or nine months that they were wrong? In this day and age, when we deal with evidence-based legislation and we try to tie everything we say to an evidence base, I really cannot understand why we should take a flier with public safety in this way. It is absolutely unbelievable.

Paul Goggins (Labour, Wythenshawe and Sale East)

My hon. Friend made a very powerful and well informed speech, and his amendments are important. I put it to him—and hopefully also to the Minister—that although he is at the very least sceptical about these changes, and he has warned us about the risks and the scale of them, he would be prepared to support a pilot to properly evaluate the approach taken by the Government. My hon. Friend the Member for Darlington has said the same. Surely it would be sensible for the Minister to unite this Committee and unite the House by running a pilot, with the support of the Opposition, to prove whether or not he is right. If the Justice Secretary is right, and the result is that the pilot works, we would all have to hold up our hands and accept that.

Elfyn Llwyd (Plaid Cymru, Dwyfor Meirionnydd)

Absolutely. That goes back to the point I made earlier, that there is consensus across this Committee. When there is consensus the Government really should get involved and try to find a way that is sensible and which takes into account the views of everybody across the Committee. All we are talking about in this case is piloting, and a slight delay to what the Ministry has termed an “aggressive timetable”.

We all want to get it right, and there is no dogmatic divide between the two sides of the Committee. We really want to get this right, and one way would hopefully be by having a pilot. If I were wrong in six months’ time, I hope I would be man enough to say so. I am sure other Members and right hon. Members would do the same. To steamroll on with such an important matter of policy—such a potentially dangerous area of policy—is unwise, even cavalier.

The element of payment by results also causes concern. There is no information available on how payment by results will work, or indeed any evidence that it will work. The proposals do not appear to have been costed. Before the Minister asks me to cost something, let me say that I will have some figures for him by the end of this Committee. The Government’s own risk assessment acknowledged that financial risk cannot even be assessed because of the lack of baseline information. There we are: we are taking financial risks as well as risking a danger to the public.

The evidence for piloting these measures before a national roll-out appears to be overwhelming. It is absolutely unarguable that it would be sensible to do so. Rushing through changes risks compromising public safety, and has the potential for a massive negative impact on public protection.

Alex Cunningham (Labour, Stockton North)

Given my Scottish name, Mr Robertson referred to me as Alec rather than Alex. I adopted the name of Alex so that people realised that I am really called Alexander. However, it is still a pleasure to serve under your chairmanship, Mr Robertson.

I rise to support the retention of new clause 1 and the amendments in the names of my hon. Friends. Like Members across the House, I share the frustrations that are so frequently aired around the high levels of reoffending experienced by our communities, because it is the communities that actually experience it. I am sure we all agree that action must be taken to break the cycle. Whatever we discuss in Committee, it is critical that we do not lose sight of the need for a probation service that is fit for purpose and able to deal with the wide range of offenders referred to it, including the many new ones under the Government’s welcome proposals on people who serve less than 12 months. We need a reformed probation service that also has the confidence of the people who work in it, and of course the highest possible public approval.

For that reason, I support the retention of new clause 1, which was introduced in the other place. It simply requires the Government to seek the approval of both Houses of Parliament for any proposals for the alteration or reform of the service. Parliament must decide whether or not Ministers can hive off the bulk of the work to profit-making organisations such as Serco and G4S, determine whether any such organisations can provide the service that is required, and above all ensure that the victims and the public at large are protected from the offenders they supervise.

The Bill will introduce post-release supervision for offenders serving less than 12 months in custody, as well as making various changes to community orders and drug testing. I support those steps; in fact the broad intentions of the Bill are to be welcomed from the perspective of addressing the scourge of reoffending that blights our communities.

Jenny Chapman (Labour, Darlington)

Is it not slightly ironic that the lowest reoffending rates are found among the offender population that is supervised by probation trusts, which are clearly very good at what they do? We do not know whether it is supervision per se or supervision by probation trusts, which is clearly excellent, that is having that dramatically beneficial effect on cutting reoffending.

Alex Cunningham (Labour, Stockton North)

That is very much the case. The tough inspection regime that probation trusts have to undergo proves my hon. Friend’s point.

I am concerned about the fact that the scourge of reoffending blights our communities and ruins the lives of many people. I welcome actions that will better reform and reshape people’s lives in that context. That is not to say that the specific proposals in the Bill pass muster in their current form. Although we all agree that steps must be taken to tackle reoffending, we should not contemplate taking action simply for action’s sake. Additional savings to the public purse, although embraced with open arms when properly achieved, should not take precedence over improvements to the services delivered. We do not want to implement any programme or measure that risks making matters worse because it is built on unstable foundations, yet that is the position that we find ourselves in. Uncertainty about how the Government will have the probation service enact the requirements of the Bill is the central reason for supporting new clause 1.

There is widespread and understandable concern at the absence of detail surrounding the proposed reforms to the probation service. I for one have received numerous letters of concern about the matter from constituents from all walks of life, including a number from serving members of the Durham Tees Valley probation trust, which serves my constituency. They are understandably worried about the changes to the services they provide, not just out of personal interest but out of interest for the people in our community who must be properly protected.

Under the proposals for the probation service, supervision will be extended to offenders sentenced to less than 12 months, and up to 70% of probation work will be contracted out to new private and voluntary providers. By definition, those providers will have no prior experience of offender management in that setting. Only those offenders deemed to be high risk and those assigned to the multi-agency public protection arrangements will continue to be managed by the public sector; even then, that will be under the guise of a new national probation service rather than the current model of local probation trusts introduced under Labour—a model that allows the service to adapt to specific local needs by commissioning the services they see fit to tackle the problems they actually face.

Meanwhile, under the plans, all offenders deemed to be of low or medium risk will be contracted out to non-public providers on a payment-by-results model that has not been tested in the UK or anywhere else in the world. If the Government have their way they will hand over those multi-million pound contracts to the lowest bidder, without even consulting those of us who represent the very people the proposals could put at risk. New clause 1 would provide protection against a serious gamble that puts public safety at risk by planning to roll out reforms that have not been adequately tested and are supported by no evidence. Parliament should decide who is best suited to deal with offenders, be they low, medium or high risk.

We should remember the fine work that our probation services carry out around the clock, working with offenders in prison and on the outside, whether they have been recently released or were given community sentences. That work is so often overlooked yet is integral to the well-being of safe communities. On the whole, our probation service does a first-class job of rehabilitating offenders and reintegrating them into a life away from crime.

The latest probation trust annual performance ratings, released in July this year by the National Offender Management Service, support that view: 31 of the 35 trusts were adjudged to be performing well and the remaining four trusts were classed as performing exceptionally well. Two are in the north-east, including the Durham Tees Valley probation trust. That the probation service was awarded the British Quality Foundation gold medal for excellence in 2011 highlights the fantastic job that it does. Such high-quality performance, however, is rarely recognised, in part because the probation service is the quiet man of the justice system in this country, receiving much less media attention than cuts to front-line policing or a Prison Service bursting at the seams. The probation service is no less important, and the figures provide proof—were any needed—that probation works, albeit with room for improvement.

In one area it is true that the probation service does not work as well as we would like it to—reoffending. As I said, we all agree that more needs to be done to reduce reoffending rates, which remain far too high, but the evidence shows that offenders discharged into the responsibility of the probation service are less likely to reoffend than those who remain unsupervised and left to tread their own path. Probation contributes a huge amount to making our communities safer, which is one reason why I support moves to introduce supervision for those receiving a prison sentence of less than 12 months and supervision to aid rehabilitation that extends into prisons as well.

Probation is a front-line service that deals with public safety. In the realm of offender rehabilitation, a delicate balance must be struck between public protection and the rehabilitation and reintegration of offenders into mainstream society. The role of the probation service is to maintain that balance. The proposals to restructure the service, fragmenting the support and services provided, while adding layers of unnecessary bureaucracy, will without doubt upset the applecart and flies in the face of what we know works best in offender rehabilitation: to establish stable and consistent contact with probation officers and to build the important day-to-day relationships. New clause 1 would build in a level of protection to ensure that any future service is fit for purpose.

Jeremy Wright (Conservative, Kenilworth and Southam)

I understand the point that the hon. Gentleman is making about the importance of personal relationships between those who are supervised and those doing the supervising. To be clear, is his view that that relationship can work only if it is between an offender and someone who works directly for the state?

Alex Cunningham (Labour, Stockton North)

My hon. Friend the Member for Darlington, on opening the debate, made it clear that that was the case, and I agree with her position. We cannot simply have an easy fix to drive down costs and to pay for the new level of service proposed in the Government’s legislation. Anyone watching BBC’s “Newsnight” last Thursday, 21 November, must have been as horrified as I was to hear stories of failure and incompetence on an unimaginable scale by Serco, which successfully tendered to be the delivery partner of the London probation trust for community payback services throughout the capital from October 2012.

The community payback contract, which cost in the region of £35 million at tender, gives Serco responsibility for community service throughout London, but the “Newsnight” investigation found evidence of serious mismanagement. So 1,362 time-sensitive offender records were not updated between 1 September and 6 October—a period of only five weeks—and during that time, information was taking as long as five days to filter through the relevant channels, meaning that warning letters and breach letters could not be issued with sufficient time to allow probation officers to take the necessary actions within the eight-day time frame and to enforce the appropriate sanctions. The updating of Delius to nDelius, a national records database, was without doubt a significant factor in the delays; manual paper records were forced to be kept for a week in August during the update.

Staff confirmed to the “Newsnight” investigation that the backlog existed before the changes took place. That assertion, along with the size of the backlog, appears to be confirmed by the Ministry’s own statistics, which estimate that 960 new offenders start on the community payback programme each month. It is also worth noting that the investigation reported that a backlog of 362 remained at the end of October, after staff from the London probation trust had been called in to work additional overtime to help clear the decks.

Andrew Slaughter (Labour, Hammersmith)

Is my hon. Friend saying to the Minister that the issue is not the definition of public or private sector, but the way in which those particular private sector operators conduct their business, to provide consistently poor and inadequate standards in whichever field they are working? Whether for prison escort, the Olympics or whatever, for a variety of reasons these organisations tend not to perform to the high standards that we have to expect and we have expected from the probation service.

Alex Cunningham (Labour, Stockton North)

My hon. Friend is correct. Is it not ridiculous that we have a situation in which an organisation has a £35 million contract but has to turn back to the probation service and ask probation service officers to work overtime in order to clear up the organisation’s mess and help it out of a very difficult situation? If we had such a situation in the proposed new service and we had to rely on more and more work being passed back to the probation service, we would see a system that would quickly grind to a halt. That would lead to more offenders on the streets, possibly not having any sanctions imposed upon them and, of course, that would put our communities at risk as well.

In addition to the shambles in London with that contract, “Newsnight” collected evidence to show incorrect information on attendance being recorded by Serco, with the corresponding cases being thrown out of court as a result of evidence that was either incomplete, late or of dubious quality. It is no wonder that probation officers have said that they lack any confidence in the data provided by Serco, and that the former Her Majesty’s Chief Inspector of Probation, Rod Morgan, described the scenario as displaying a

“pattern of inaccuracy”

with sufficient evidence

“for someone to be taking a very close look”.

The upshot of these failings is that justice ultimately becomes difficult if not impossible to dispense. It is timely to remember that the community payback contracts were supposed to be part of the Government’s blueprint for reform of the probation services. If similar failings were to occur in probation, public confidence in the entire criminal justice system would be catastrophically undermined and the consequences would be dire, yet the Government’s plans lay the groundwork for precisely this eventuality, and without new clause 1 Parliament would not even have a say on the detail of the changes.

The proposals envisage a system in which offenders sentenced to less than 12 months will be given that supervision. The probation service will, however, be excluded from providing this supervision to low and medium risk offenders, as entities bidding for such contracts are required to be able to bear financial risk and they do not have the capacity to do that. Instead, this work will be contracted out to private and voluntary sector organisations. I suspect that we will see the same kind of thing happening as with other contracts such as the Work programme championed by the Justice Secretary in his previous role. The big organisations will court the voluntary sector, promise them subcontracts and partnership in exchange for their support and expertise, and then cream off their own profit margin before squeezing them till the pips squeak and we have a far less effective and motivated workforce working with us.

Jenny Chapman (Labour, Darlington)

On the issue of probation trusts not being able to bid, does it not strike my hon. Friend as absurd that those who have a good track record will not be able to take part, even though the payment-by-results contracts will not be putting money at risk at all, because the reward element, which is all it is going to end up being, will be in excess of the fee element that they need to spend to deliver the service?

Alex Cunningham (Labour, Stockton North)

It beggars belief. The fact that these companies will cream off their profit first before they do anything else is important. They will not be concentrating on delivering the service; they will be concentrating on their shareholders. The important thing is that we have a professional service working with offenders because if we do not have those, as well as professional people supervising the professionals who are working with offenders, things can only go very badly wrong.

As I mentioned briefly, and as has been pointed out by hon. and right hon. Members, this step change is proposed to take place without being properly piloted and without approval of Parliament. We must guard against that. Imposing a payment-by-results model on probation services, as is the Justice Secretary’s plan, is untried and untested anywhere in the world. I have no doubt that this is a huge risk. Pilots were set up in the Wales, Staffordshire and West Midlands probation trusts with the intention of uncovering any shortcomings that may have needed to be identified and corrected before a future nationwide roll-out. Indeed, the Ministry’s own press release of 25 January 2012 waxed lyrical under the headline:

“World leading probation pilots announced”.

The then Minister, the hon. Member for Reigate, was quoted as saying:

“These ground-breaking pilots will for the first time test how real freedom to innovate, alongside strong public, private and voluntary sector partnerships, could drive significant reductions in reoffending by those serving community sentences.”

However, the shadow Secretary of State, my right hon. Friend the Member for Tooting (Sadiq Khan), was right to note that the crux of the statement hinges on just one word: “could”.

The pilots were designed to be an opportunity to trial the model, learn from any mistakes on a small scale, and make improvements where necessary to ensure that any changes are correctly designed before the model is rolled out nationally.

None the less, in his first week in the job, the Secretary of State cancelled the pilots and chose instead to pursue a full national roll-out based on a hunch that the policy would work. His assurance, however, arrives at the party alone. With the Government not deeming it necessary to test the effectiveness of the plans, there is no supporting evidence to confirm his belief.

The Secretary of State has chosen to play the role of both judge and jury in deciding that the plans for probation trusts will reduce reoffending. At the same time, he has managed to prioritise an ideological bent over confronting the long-term problems, preferring to focus on driving towards a small state and cost savings instead of putting the rehabilitation of offenders and the protection of public safety at the front and centre of his policy.

The teething problems that are inevitable in any such trial period, ranging from inexperienced providers and failures in communication to glitches in untested IT systems, as outlined earlier by the right hon. Member for Dwyfor Meirionnydd, will now have to be contended with all at once and on a national scale. In case we are in any doubt, the Government have repeatedly referred to pilots in Doncaster and Peterborough. It is true that there were pilots in both locations, but the crucial factor is that they were prison pilots and therefore neither suitable nor comparable in the current context.

Coincidentally, whereas the pilots in Doncaster and Peterborough were decidedly not intended to pilot changes for probation, it is interesting to recognise that, while both pilots show some reasons for cautious optimism, both missed their targets. That is precisely why it was useful to have pilots. Mistakes were made, but they will help to form the crucial learning curve that will become the basis of future improvements. That is what pilots are for.

We should also bear in mind that such confident self-assurance comes from the same Secretary of State who introduced the Work programme, another payment-by-results programme that has proven itself less effective in helping the long-term unemployed back into work than could have been expected from the absence of any intervention at all—it was quite literally doing worse than doing nothing at all.

Despite spending billions of pounds on the flagship Work programme, the accounts have been so atrocious that the Public Accounts Committee commented that the

“providers have seriously underperformed against their contracts and their success rates”

are worse than those of Jobcentre Plus—not that Jobcentre Plus does a bad job.

That is particularly pertinent in the context of probation. It was summarised neatly by The Economist, which stated:

“If the Work programme fails, the cost is higher unemployment; if rehabilitation of offenders fails, the cost is worse: more crime. Which is why those now-disregarded pilots were set up in the first place.”

Put another way, if the Work programme fails, the unemployed fail to get jobs, or the jobs prove not to be sustainable. That outcome is far from desirable, with consequences extending far beyond the confines of any cursory, one-dimensional overview referencing production output or welfare bills. They are, however, in many ways, more palatable than the impact of similar failings with the proposals to overhaul the probation service. Shortcomings in transforming the criminal justice system could be perilous—dangerous criminals could be left unsupervised, walking the streets unmonitored. That is not a risk I would advocate.

We have only recently seen that the roll-out of universal credit, already much delayed, is having to be done even more slowly than originally planned, as a result of serious management and IT difficulties.

Andrew Slaughter (Labour, Hammersmith)

My hon. Friend is absolutely right to point out the risk to the public. Does he agree that we have seen such conduct in ending indeterminate sentences for public protection and the liberalisation of remand and other restrictions in tribunals in relation to remand? The Government talk a lot about the protection of the public, but when there is a choice between that and saving money and meeting financial targets, the latter always seems to take precedence.

Alex Cunningham (Labour, Stockton North)

My hon. Friend has a long list that he could have quoted to the Committee, although he may well do that in a speech at some stage. It is lamentable that the Government tend to mention money before public protection.

Once again, the Secretary of State for Justice has declined to learn from the experience of colleagues in the Department for Work and Pensions, but also from the mistakes of his Department.

Paul Goggins (Labour, Wythenshawe and Sale East)

My hon. Friend is right to reflect on the experience of the Work programme. Has he seen the figures from September this year, which reflect what happened to the 19,800 offenders who were released from prison in 2012? Of them, only 360 had been found a job by June this year.

John Robertson (Labour, Glasgow North West)

Can we bring discussion back to the amendments we are debating? We do not need to broaden the debate to other areas.

Alex Cunningham (Labour, Stockton North)

I accept your ruling, Mr Robertson, but I am being educated by my right hon. Friend. I was not aware of the issue he raised. Part of the probation service working in partnership with other organisations is to help offenders into work. If partners that the service will have to work with are having such an abysmal success rate, that is something for us to worry about.

I referred to the need of the Secretary of State for Justice to learn from his Department’s failures, and that relates to the language services contract, to which others have alluded. The contract started in 2012 and was branded “shambolic” by the Justice Committee. Coincidentally, the Committee also identified that the Ministry did not have a sufficient understanding of the complexity of court interpreting and translation work before it decided to put those services out to tender.

Andrew Slaughter (Labour, Hammersmith)

I am sorry to interrupt my hon. Friend again, but this subject is dear to my heart. When the language contract was originally let—it was a chaos and a farce and it was not performing—we were told by successive Ministers that it was teething troubles. The latest figures from last month show that the number of trials that are failing and the number of interpreters who are not turning up is going up and the performance of the contract is going down again. The performance is about 80%, against a target of 97%.

Alex Cunningham (Labour, Stockton North)

My hon. Friend asks a question, and the next sentence of my speech answers it. The ultimate outcome is translators failing to turn up for trials, causing cancellations. Those that did appear on time frequently mistranslated the evidence. The circumstances around the language services contract led the National Audit Office to recommend that the Ministry of Justice

“implement future contracts so as to minimise transitional problems, for example through piloting”—

funny word that, “piloting”—

“and rolling-out new systems gradually”.

That is sound advice and applicable beyond the bounds of the Ministry, yet the Ministry is running the risk of delivering a parallel scenario of failures with the reform of the probation service, only the consequences pose a more direct threat to public safety.

I emphasise that new clause 1 would require the same Secretary of State to outline his plans for the probation service before both Houses of Parliament, to demonstrate why he believed that they were for the best, and for them to be fully and properly scrutinised before being approved. As Lord Ramsbotham highlighted when making the case in the other place for inserting the new clause, Ministry of Justice officials have painted in tremendous detail the extent and complexity that the programme of change entails.

The need for piloting should be obvious, although in case there was any doubt, the former chief inspector of prisons made it abundantly clear that we cannot become complacent in the management of such an important service. On top of the intricacy of the proposed changes—not to mention their untested nature—Lord Ramsbotham pointed to the need for awareness of the enormous time pressures that will be added into the mix. According to the White Paper timetable, changes would have to be completed in a year’s time. That is no mean feat given the sheer depth of reorganisation. A new operational model has to be implemented and tested. The new national probation service must be established, along with 21 community rehabilitation companies. New senior management teams for the national probation service and the Government companies must be recruited and appointed. Staff must be allocated into roles in the new organisations, while 18,000 staff will have to be transferred to new employers. That will all happen, currently, without the scrutiny of Parliament.

If that process was not confusing enough, probation trusts are to have agreed the national and completely functional split and identified the proportion of staff and assets to be allocated to the public sector or government companies. They are also required to implement the new operating model at the same time as remaining contractually responsible for delivery by public sector and competing functions, all the while serviced by a single corporate support. In real terms, officials will have to allocate about 500 premises in whole or part to the national probation service or government companies. They will have to establish corporate support functions for all 21 new entities at the same time as reallocating some 250,000 offender cases and introducing new contracts and partnerships.

There can be no doubt that that is a colossal task; indeed, I would call it a recipe for disaster. The challenges highlight the fact that the Government are looking to create an artificial split between public and private providers. They are adding unnecessary layers of bureaucracy that are likely to detract from the efficiency and effectiveness of probation services delivered by local probation trusts. As a result, the boundaries of responsibility between the national probation service and the private providers that will take over the government companies become blurred. That brings with it the likelihood of crossover and confusion. It is almost inevitable that information will fall through the cracks and vital warning signs will be missed as a result of that unnecessary divide.

That is before we consider the risks of losing accountability. For instance, those responsible for supervising court orders are accountable to the courts for the manner in which they fulfil their duties. However, if a judge has concerns about the supervision of a contracted-out court order commissioned by the Ministry of Justice but delivered by a private provider, whom do they ask to appear before them? In a similar vein, splitting responsibility for offenders between public and private sector providers based on their assessed risk level completely overlooks the 25% of offenders whose risk level will fluctuate during their period of supervision. Those fluctuations are a major concern, and service providers will need to react swiftly in such circumstances, particularly in instances of risk elevation. According to the Government’s proposals, that would entail a change in responsibility from the private sector to the public sector, but it remains unclear who is responsible for pulling the triggers for that transfer process. Delays simply cannot be tolerated because of the obvious risks involved.

As we have seen with the community payback scheme that Serco is delivering in London, however, the extra fat in the form of additional bureaucracy will make the process cumbersome. If information is similarly mismanaged in probation services, the risks to the public will be unthinkable. The Secretary of State for Justice has said that he can continue to deliver existing services and his proposed new ones within current budgets, but I cannot see how he can pay for all the extra bureaucracy and let his allies in the private sector cream off a substantial profit. It is the service that will suffer. Offenders will go unchecked and even unpunished, and the public will be put at greater risk. The Secretary of State wants to dodge laying his policies before Parliament and press ahead with his great private sector experiment, an experiment that has the potential to create a monster that will wreak havoc with our criminal justice system.

If the prospects of increased risk were not daunting enough already, the Minister told the hon. Member for South Dorset (Richard Drax), in response to his concerns about risk and the movement of offenders between different categories and potentially service providers, that

“when someone is categorised by the national probation service as moving from medium risk to high risk, they will stay with that service. There will be no passing to and fro when that allocation process has taken place.”—[Official Report, 30 October 2013; Vol. 569, c. 1016.]

Is that really what the Minister meant? Would medium risk offenders who were subsequently categorised as high risk remain with their private sector provider? I hope that he will address that point specifically, as his statement has simply added to the confusion about the Government’s intentions and raised the stakes in relation to risk, and how and by whom offenders are managed.

Jeremy Wright (Conservative, Kenilworth and Southam)

I will take the opportunity to do so now. If there is any confusion, I apologise. I thought I had made it clear that if a medium risk offender becomes a higher risk offender and then their risk category changes again from high back to medium, they would not transfer back to the community rehabilitation company. There will not be the multiple transfers backwards and forwards that my hon. Friend the Member for South Dorset was referring to.

Nadine Dorries (Conservative, Mid Bedfordshire)

If hon. Members could remain in the same seats throughout the Committee sitting, that would make things much easier for the Clerks and me.

Nadine Dorries (Conservative, Mid Bedfordshire)

I remind the Committee that with this we are discussing the following:

New clause 1—Requirement to pilot before tendering for probation services—

‘No national tendering for any probation service shall commence before any proposed restructuring of such services has been the subject of a pilot scheme which is subsequently independently monitored and the results of such monitoring laid before both Houses of Parliament.’.

New clause 2—Requirement to pilot before restructuring probation services—

‘Any proposed restructuring of the Probation Service must first be the subject of an independently evaluated pilot scheme and the proposals should be laid before Parliament and be approved by resolution of both Houses.’.

Alex Cunningham (Labour, Stockton North)

I welcome you to the Chair, Ms Dorries. [Hon. Members: “Hear, hear!”] Clearly, you are a very popular Chair, judging by that reaction. I am pleased to serve under your chairmanship.

Before the Committee adjourned, the Minister was trying to clarify a statement he had made to the House of Commons about the movement of offenders between risk categories and the potential for offenders yo-yoing between medium and high-risk categories. He appeared to confirm that medium-risk offenders then categorised as high risk would move to the national probation service and, regardless of their progress, remain with that service, I assume, until the end of their supervision. He nods his head in agreement.

The clarification is extremely interesting. For me, it reveals the Government’s own concerns about the volatility in the system and how that will play out as the category of offender changes. More to the point, it reveals that the Government themselves already have considerable reservations about the abilities of the private sector firms to manage offenders, particularly those who exist on the margins of medium and high-risk categories.

Is there already an acceptance by the Government that they are on dodgy territory when it comes to the management by the private sector of those sex offenders, robbers and others who pose a considerable risk to society? Is the Minister accepting that such providers, having failed to rehabilitate a medium-risk offender to such an extent that they are re-categorised as high risk, cannot be trusted or expected to work with such people in the future after the national probation service has set them on the rehabilitation road and their category changes back?

This issue further strengthens the need for Parliament to examine in detail the proposals for the probation service that the Government are forcing through—controversial and inadequate ideas that have not been piloted or proven, and about which, as today’s debate has revealed, the Government themselves already appear to have reservations.

What happens with the payment for the contracting company? Does it simply pick up the fee—perhaps 90% or 95%—for working with the now high-risk offender, give up on the balance having admitted failure and hand the person over to the national probation service? How is the national probation service funded to pick up the people failed by the private sector providers? What does the Ministry of Justice risk register say about the financial impacts of the private sector’s failure? How many offenders does the Minister estimate will move upwards in category, and what capacity issues will there be for the national probation service?

Jeremy Wright (Conservative, Kenilworth and Southam)

Does the hon. Gentleman believe that under the system as it stands, when someone is re-categorised from medium to high risk, that is a failure of the probation officer currently managing them?

Alex Cunningham (Labour, Stockton North)

No; there are different factors involved in this. I am sure of that and acknowledge the point the Minister is trying to make, but the fact remains that the person will not just be moving within a particular service. They will be moving from one service provider to another, and there are issues associated with that.

It appears to me that the risk list grows every day, and risk is the all-important factor—risk with offenders, risk with public safety and, I suggest, risk with any good reputation the Government have managed to carve out with their proposals in the Bill. Whatever the Minister says, the Secretary of State is taking a risk with our people and will be left high and dry without any real, legitimate parliamentary mandate, which new clause 1 would have him seek. Countless factors can influence risk, and many of them are not constant.

Payment by results allows the Government to minimise uncertainty by contracting out risk to private sector providers, but to price the outsourcing of risk correctly, the Ministry needs to be able to quantify the risk. That is not straightforward when there is so much churning of offenders between risk categories, making it impossible for those commissioning services to get an accurate measure of the problem.

For example, some high-risk offenders can be considered low risk if they are taking the correct medication or if they have mental health problems that are managed effectively. It is important to recognise from the outset that offenders who are rated low or medium risk are not exclusively those who are convicted of what would be widely deemed lesser offences. Indeed, the system of categorisation is somewhat arbitrary and, as others have said today, those classified as low or medium-risk offenders will include those convicted of domestic violence, burglary, robbery, violence against a person, sexual offences and much more.

Such scope for variation, not to mention inescapable incidences of volatility that result in risk fluctuation, is likely to result in contracts being overpriced or underpriced. That suggests that the very basis on which offenders are to be assigned to the various providers of probation services needs to be re-examined, or at least piloted, taking account of personal circumstances to determine the most suitable route of rehabilitation, rather than grouping offenders by arbitrary categorisation and prescribing a one-size-fits-all solution.

With the steadfastness of private provision in mind, and freedom of information requests revealing that as many as 217,569 of the 250,000 offenders currently supervised by the probation service will be transferred to providers in the private sector, it is not difficult to see that taking such a leap into the unknown without first running a pilot is a huge risk.

It is important to clarify again that the amendment has not been designed to rule out the possibility of incorporating provision of services by the voluntary and private sectors. I take this opportunity to reassert the need to work with the Government and the probation service to design and implement measures to ensure that the cycle of reoffending is broken.

The purpose of new clause 1 is to ensure that prior to being laid before Parliament, the proposed changes are properly piloted for appropriate assessment and scrutiny ahead of approval of any action to roll out changes nationally. That is important, given the significant concern about how the Government’s approach could distort rehabilitation. First and foremost, it is not imprudent to believe that, as with the Work programme, delivery will be dominated by the same firms that dominate such tenders at national level. Those large national providers will find it easiest to risk non-payment, although we have yet to learn the extent of any risk they may take, because the Secretary of State dodges question after question in the House about what proportion of a contract will be subject to the guaranteed fee and what proportion to payment by results. Perhaps the Minister will tell us today.

Are those big organisations equipped to do the work required by the Justice Secretary? I doubt it. Smaller organisations and local charities arguably have a better understanding of local needs and are markedly better connected at that level, having strong local networks. None the less, the smaller organisations are likely to be squeezed out as commissioning for probation services is absorbed centrally by Whitehall, which cannot be aware of the good work of every organisation in every region. Added to that risk is the requirement under a payment-by-results model for providers to put money on the table up front. Sebert Cox, chairman of the Probation Association and the Durham Tees Valley Probation Trust, which covers my constituency, is on the record as saying that such a move is likely to put off smaller charities.

While Ministers and officials express their desire for charities and local organisations to be integral to the delivery of services, very few small voluntary organisations will be able to become involved. They say they do not have the necessary funds, and many are already facing financial pressures as a result of cuts in their budgets and funding streams from elsewhere. That is not to say that a provider, whether local or national, can be confident of obtaining financial reward only if it can achieve reductions in reoffending that are greater than available evidence suggests is achievable. With those national organisations that have won contracts elsewhere having greater resources available to them by virtue of their size and omnipresence in the market for services of all descriptions, I have difficulty foreseeing local voluntary sector organisations being able to be price competitive.

More worrying, given the likely difficulties of cutting reoffending by the amount required to benefit financially, is that the payment-by-results model could encourage providers to cut spending on rehabilitation services. After analysing the Government’s proposed model and considering the potential returns for providers, the Social Market Foundation concluded that it is more viable financially to deliver supervision in the cheapest way possible, allowing reoffending rates to increase by up to 3% in the process and earning money from the fee for service rather than investing in services. Such perverse incentives alone justify piloting the entire payment-by-results model before a national roll-out.

It is difficult to imagine a scenario that does not result in the likes of G4S and Serco stepping into the vacuum. With the proposals for the probation service seeing fewer contracts for areas each covering huge swathes of the country, it is only these large private companies that can realistically absorb the risks involved in contracts of this size. We saw it before with the Work programme, and I dare say we will see it again in probation if the Justice Secretary allows these reforms to go ahead in their current form.

Even the largest charities will struggle to afford to become involved and share their skills and experience, the true value of which cannot be overestimated. As other public services revert to localised commissioning models that were once seen as the supporting structure of the “big society”, it is worth making the point that this reversal of trend sends mixed signals about the Government’s overall direction of travel. There is also a paradox in encouraging probation services to be dominated by large national providers, while the public sector retains responsibility for the highest-risk offenders. The underlying message appears to be that the Justice Secretary does not trust these companies to handle high-risk offenders. So why allow private companies to take responsibility for offenders whom we already know could have been convicted of a multitude of awful crimes, particularly when risk categorisation of one in four offenders is liable to change during the course of supervision?

What about sharing knowledge of what works, as others have already spoken of? Such a payment-by-results model that pits private sector for-profit companies against each other will necessarily discourage sharing such knowledge and could perversely jeopardise improvements in the reoffending rate. Allowing the public sector to incorporate private sector elements, on the other hand, would allow this knowledge to be shared intelligently and the benefits to be shared across probation services nationally, rather than being restricted to isolated geographical pockets.

Given that the Justice Secretary accepts that probation works and that the probation service is doing a good job, the seemingly obvious alternative would be to allow existing trusts to extend their service offerings to those sentenced to less than 12 months. They already possess the necessary experience and expertise. Several probation trusts already work with those convicted and serving a term of less than 12 months. With the lack of evidence to support his plans, coupled with an absence of cost savings through incorporating private sector companies, it is difficult to ignore the distinct impression that the Secretary of State’s determination is derived from an ideological position. Allowing probation services to be contracted out wholesale, without the approval of Parliament, not only risks domination by national private sector providers such as G4S, Serco, Capita and A4e, but also gambles with the probability of cherry-picking, further skewing the entire approach to rehabilitation.

Under a payment-by-results model, providers are incentivised to focus their attention on those offenders deemed easiest to rehabilitate, while parking the most difficult with complex and multiple needs. I need not speak of the inherent risk this poses in failing properly to address the problem of reoffending as a result of prioritising profit over performance. Let us not forget that the current chief inspector of probation, Liz Calderbank, has raised her concern that the proposed move to a national commissioning structure will come at the expense of the local perspective, disrupting the many positive developments that continue to emerge from working in partnership, and disrupting successful partnerships with probation trusts.

The Government are keen to publicise the efficiency savings that their schedule of reforms could produce, with private companies being paid only if they successfully rehabilitate offenders, but this is not the whole story. I have already mentioned the Justice Secretary dodging the questions about what percentage of the contract payment will depend on results. Providers are likely to receive at least 90% of their fee, irrespective of whether they deliver as promised. I hope the Minister will reveal whether that is the case: is it 90%, more than 90% or less than 90%? This is not a payment-by-results model that could drive real improvement, and that is further reason to require full piloting.

That is far from the only concern. Lord Ramsbotham noted that, in a recent letter, details were revealed that indicated that results would be paid for after one year. No doubt that news was warmly welcomed among potential providers in the voluntary sector and the private sector; many of whom would find it difficult to sustain activities for longer without receiving payment. Reoffending rates have always been measured after two years, though, and it appears untimely to stipulate at this juncture that a decision be reached on the success of service provision after only one year. Indeed, if long-term behavioural change is the ultimate goal, an argument can be made for extending that period rather than reducing it, but financial necessity dictates a shift in the opposite direction. Should we really be designing our probation service by putting the rewards for delivery organisations first, rather than the rehabilitation of the offenders, the protection of the public and the needs of victims? To take that further, it is not clear what would happen were an offender to reoffend further down the line, after a payment was made to the provider.

I know that the extent of the Freedom of Information Act will be debated under clause 3, but I reference it now as we all know that private companies delivering public services are exempt from the Act’s requirements, so it is difficult to get detail on much of what they are up to—all the more reason for Parliament to determine the future shape of the probation service.

Casting further doubt on the efficiency of proposed reforms is the need to re-engineer about 2,000 IT packages to allow the operation of the newly created entities. We all know that neither Government nor the Ministry of Justice have positive track records when dealing with IT packages. We need look no further than the reported troubles that slowed the roll-out of universal credit so significantly, the language service contracts I mentioned, or indeed the major problems encountered with the current probation programmes.

It is difficult to find faith in the Department’s ability to co-ordinate so many changes in such a short space of time, particularly when officials from the Ministry of Justice admitted that the complexity of closing down all these systems and moving to a shared systems approach will present a considerable challenge. The task is not made any easier when we remember that the umbrella requirement for the changes is that they must all be delivered without materially impacting on business as usual. I am not convinced that that is possible, and the Ministry of Justice’s risk register confirms a more than 80% likelihood that an unacceptable drop in operational performance during the programme will lead not only to reputational damage for the probation service, but to delivery failures. That, in my eyes, is certainly not a risk worth taking.

In case there is any doubt, that view is shared by many senior professionals in the sector who have many years of first-hand experience in probation and understand the intricacies of service provision in this area. Robin Verso, the Warwickshire probation trust chairman, advised the Secretary of State that the risks involved in the current timetable will see performance damaged and an increase in public protection failures. Gillian Wilmot, chair of the Derbyshire probation trust, spelled out fears that fragmentation of the probation service will lead to more systematic risks and more preventable serious attacks and deaths. Jane Wilson, chair of the Leicestershire and Rutland probation trust, similarly warns that the current timetable will seriously impact on service delivery and increase risks to public safety. Yes, they may have a vested interest, but I do not view their comments with any cynicism. They passionately believe in the probation service and want to see the best for both offenders and our communities.

What I hope has been borne out from what I said is that we are talking about the delivery of a public service that feeds directly into public safety. With that in mind, we have to ask how much risk we are willing to take in overhauling the service. I urge the Government to take a cautious approach. To shift responsibility for about 87% of the total offenders currently being supervised by the probation service to private sector organisations is a shift of monumental proportions and one that we cannot afford to take lightly, but as we have seen, the Secretary of State is determined to push ahead at breakneck speed while avoiding proper parliamentary scrutiny and, more importantly, neglecting to undertake sufficient piloting and to analyse carefully the results, to ensure that the reforms have been designed in a workable manner that will achieve the identified goals. There has been no testing, no costing and no evidence to support these radical changes, nor has there been any backing from the professional probation services, but that has not prevented the Justice Secretary from jumping the gun and issuing an invitation to tender for £450 million-worth of services before the Bill had its Second Reading.

Let me be clear: I am firmly behind action to reduce reoffending. That such action needs to be taken in some shape or form is incontrovertible. This is why I have welcomed the Government’s plans to extend probation services to those offenders sentenced to less than 12 months, who were previously left to their own devices. What I do not support, however, is the plan to do away with the local probation trust that allows services to adapt to specific local needs by commissioning those services that the trust sees fit to tackle the problems that it faces.

I take the opportunity to reiterate once more that clause 1 is not a party political move. On the contrary, it was inserted with Cross-Bench support in the other place, because too many unanswered questions remain about the Bill and the programme of privatisation. Many of these concerns relate directly to the payment by results model, which is untested anywhere in the world in this context. As a result, there is no evidence to support the claims of the Justice Secretary relating to its suitability—claims which effectively amount to pseudo-science, backed by his belief that they are right. Probation is a front-line service dealing with public safety on a daily basis and it deserves better.

I have questioned the rationale of the Government’s proposals and do not fully understand why they are trying to fragment the probation service while marginalising the role of the public sector. The probation service is arguably an example of good public service provision in an extremely difficult area, having managed to get reoffending rates down to 34.2% after a decade of steady year-on-year decline; at the same time, probation trusts have made savings of around 20% over the past five years and have helped to reduce crime rates while maintaining public protection. The Government’s proposals would put an end to these achievements, and the claimed benefits of the changes are backed up by gut feelings alone. The Minister’s own risk assessment confirmed that there is an 80% chance of a drop in operational performance and up to an 80% risk of failure of implementation; at the same time, there is an 80% risk of the cost saving not being met—an awful lot of 80%s there.

I fail to see why the Secretary of State is in such a rush to revolutionise a system that has displayed such promise and to displace it with a payment by results model that has failed so catastrophically elsewhere, while taking extraordinary risks with public safety. Parliament ought to have the right to scrutinise his proposals in detail through a proper process. I therefore support the clause.

Sarah Champion (Labour, Rotherham)

It is a pleasure to service under your chairmanship. This week I will be one year old as an MP. Is it because I am a newbie or because I am naïve or have not become jaded enough that I am genuinely shocked by the lack of scrutiny and by the speed and by the lack of discussion with which these measures are being pushed through? Were it not for the addition of clause 1, we would not be debating this at all. We are talking not about a light matter, but about 70% of the probation service going into private hands, which will have enormous consequences.

Andrew Slaughter (Labour, Hammersmith)

Did I hear my hon. Friend right? “We” are debating? It appears to me that only one side is debating. I am sure that the Minister will condescend to speak to us in due course. Given that we have this opportunity and we are not under particular time pressure—I do not imagine that the Government Back Benchers have been told to keep quiet because we are filibustering—it seems shocking to me, and I know my hon. Friend agrees, that nobody on the Government side seems to care about this issue. Perhaps they are too embarrassed.

Sarah Champion (Labour, Rotherham)

I have to agree with my hon. Friend. Unfortunately, we are having the debate and outside this place they are having the debate. The sadness comes from the fact that within this room we are not debating the measures, and if clause 1 is not allowed to stand, Parliament is not going to be able to debate this. I find that extremely challenging to the processes that we hold dear.

For that reason, I am speaking primarily in support of clause 1, but also in support of new clauses 1 and 2. It is vital that any changes to our probation service come before Parliament. Probation is a key component of our justice system; that it might be privatised without full debate and scrutiny is scandalous. A robust pilot is the very minimum needed to challenge and calm the concerns raised in this Committee and within the sector as a whole.

Before coming to the House, I worked in the voluntary sector. If we made any changes, we would present a marked-up range of recommendations, but that has not been done. One recommendation from me would have been to see whether existing trusts had the capacity to proceed with the scheme. That has not even been presented, which I find strange.

All 35 of our probation trusts are staffed by dedicated, hard-working probation officers. I have spent time with the impact team in Rotherham and was inspired by the team’s commitment to supporting offenders and their personal pride in preventing reoffending. That is typical of what we find across the country, and I fear that it will be destroyed if payment by results is introduced, as offenders will then become targets rather than individuals to be cared for.

After the probation service won an award for excellence in 2011, the hon. Member for Reigate (Mr Blunt), then the Minister with responsibility for prisons and probation, stated:

“This prestigious award recognises the professionalism of probation staff and the excellence of their work. This very public recognition of not just what they do but, perhaps more importantly, how well they do it, will be a source of pride for probation staff.”

I therefore find it extremely challenging that those staff will not even be allowed to tender for this opportunity.

According to a National Offender Management Service report published in July this year, quality of service, as measured by the probation trust rating system, was rated either good or exceptional in every single probation trust. Moreover, reoffending rates are falling: the latest statistics published by the Ministry of Justice show that the probation service has reduced reoffending to 5% below its target figure, continuing the downward trend in reoffending rates witnessed in recent years, such that rates of reoffending by all adult offenders in the community subject to probation supervision are at their lowest since 2007-08. In South Yorkshire, the figures are even better, at 13.4% below the target figure.

Reoffending rates are important, but they are not the only criterion for success. The probation service can boast that victim feedback has been positive in 98% of cases, that targets for completion on domestic violence interventions and court report time limits have been exceeded, and that completion targets were also met or exceeded in the vast majority of probation programmes. Moreover, the service has managed to achieve all that while making the considerable budgetary savings expected of it.

Lorely Burt (Liberal Democrat, Solihull)

I am listening carefully to the hon. Lady’s speech. I hope that I have not become jaded either and am still capable of spirited discussion and debate. She says that the trusts are not allowed to tender, and several Opposition Members have echoed that theme. It is not true to say that individuals within trusts cannot tender; they can tender as mutuals, for example. I am sure that everyone would wish that such individuals’ tried and trusted skills and abilities, which have already been put to the test, be used within such organisations, but organisations funded by the taxpayer are not allowed to go out to private contract due to the element of risk to taxpayers’ money.

Nadine Dorries (Conservative, Mid Bedfordshire)

Order. You are making a speech, not an intervention.

Lorely Burt (Liberal Democrat, Solihull)

I am so sorry, Ms Dorries. That is my point, anyway.

Sarah Champion (Labour, Rotherham)

I am glad that the hon. Lady is not jaded, and I hear everything she says. The fundamental problem is that those staff are clearly the best placed with the best skills to do this, but we would be asking them to run the service, as they do now, while developing a model of practice for six months’ time. It is just not realistic to ask them to put in that much time and resource. They are in full-time jobs, whereas private companies have lawyers and advisers to put packages together. It is not a level playing field. I would love to see that happen—perhaps one of the pilots could be a test of whether they can deliver the service for offenders with sentences of less than 12 months—but in reality, I do not think they have the capacity to put forward a worked-up, competitive tender while doing their real jobs.

Paul Goggins (Labour, Wythenshawe and Sale East)

My hon. Friend does the Committee a real service, because she is the first Committee member to mention victims of crime. She said that her probation trust exceeded 98% victim satisfaction, which is one of the newer responsibilities of the probation service. Will she develop her point about why it is important for the Committee to consider the impact of the changes on victims of crime?

Sarah Champion (Labour, Rotherham)

I thank my right hon. Friend for that intervention. We are talking about preventing reoffending, which means preventing crimes against other people. I agree that victims ought to be at the centre of our discussions. Parliament needs to have a full discussion about this issue because we represent our constituents. At the moment, I feel that victims do not have a voice. The proposals are being rolled out without proper consultation and consideration of how they will affect offenders and victims.

It is astonishing that the Secretary of State for Justice plans to scrap the trust within a few short months and replace it with an entirely different system, most of which will be run by the private sector. In an echo of his disastrous Work programme, he intends to impose an untried and untested payment-by-results model on the probation service. I say “untested” advisedly, because his predecessor had every intention to test this model through a series of pilot programmes. However, one of the first decisions that the Secretary of State for Justice made when he was appointed was to expand payment by results across the whole of England and Wales without bothering to implement the remaining pilots or waiting for the results from the pilots that had been started. I cannot help but wonder whether that was because they may not have yielded the outcomes he wanted. That is why I am also in favour of new clauses 1 and 2. The only sensible way forward is to take a little time to have a properly worked-out pilot. I urge the Minister to take that on board and consider it seriously.

It is clear that the reforms are flawed, rushed and ill-conceived. I want to talk about five issues I have with them. First, the proposals mean that medium and low-risk offenders will be delegated to private contractors, while high-risk offenders will remain in public hands under the auspices of a new national probation service. One of the recurring challenges that the probation service currently faces is the need to respond instantly if the level of risk an offender presents increases. Clearly, if a medium-risk offender becomes a high-risk offender due to a change of circumstances, the public needs greater protection. Yet the Department is unwilling to say how many of the 260,000 offenders looked after by the probation service each year fall into each of those categories. Under the Secretary of State’s reforms, a change in the risk level would instantly require a transfer of responsibility from any of the 21 separate private contractors to the public sector to protect public safety. That is worrying, not only because it is bound to be a bureaucratic and cumbersome process, but because it is not clear whether agencies across the country will have access to consistent tools for calculating risk levels.

Moreover, there is a disincentive for private contractors to upgrade the risk level of offenders when their circumstances change. Payment-by-results money follows the offender, and contractors may avoid re-profiling medium-risk offenders as high risk if they would lose money. What steps will the Minister take to ensure that that does not happen? The flipside of that is that private contractors may wish to get rid of medium-risk offenders who are creating a lot of trouble for them by shoving them into a high-risk category, so their bottom line is not affected.

Secondly, in dividing the workload in this way, the proposals will allow cherry-picking by the private sector and will lead to a downgrading of the quality of support that medium and low-risk offenders get. As the National Audit Office has put it, the proposals

“could encourage providers to concentrate their efforts on the offenders least likely to reoffend and prevent them from working with the most prolific offenders”.

Part of the success of the probation service in reducing reoffending has been its use of more targeted interventions. A good example is how interventions for women are handled. These work well because they are small, local and holistic; they look at each woman as an individual with her own problems and needs, rather than as just another offender. Under the proposals, this type of niche service is likely to be lost altogether as the links between large prime contractors and smaller local providers, as we have seen with the Work programme, either break down over time or often do not emerge at all. Crucially though, these services are simply more expensive and as the proposals mean that it will become the probation provider rather then the court that decides the activities the offender should take part in, they will, from commercial necessity, prioritise the cheapest. This is why the Howard League is concerned that female offenders will suffer detrimental consequences for their safety, levels of offending and general health and well-being. There are many such local partnership working arrangements in place already, so will the Minister assure us now that participation in these partnerships will continue when the private sector is running the 21 community rehabilitation companies?

Thirdly, the programme is complex and fraught with logistical problems. To deliver the split described previously is one thing, but to deliver it by the end of March next year is simply foolhardy. We are talking about the reallocation of 20,000 staff into new roles in an organisation that have yet to be tendered for, the establishment of a new probation service within the civil service and the creation of support functions for all 22 new entities. Re-engineering the IT systems—some 2,000 IT packages, I understand—is, in itself, a formidable task.

Ian Paisley Jnr (DUP, North Antrim)

Does the hon. Lady agree that proper vetting of anyone in the private sector is essential in this reorganisation? This is particularly relevant in Northern Ireland given the backgrounds of some people who want to work in this private sector. They may best be termed “poacher turned gamekeeper”.

Sarah Champion (Labour, Rotherham)

I completely agree. It is of great concern. Later in the Bill we come to more specifics about people who are qualified to do the role or otherwise. I shall also come on to the bigger companies who are likely to tender for this, because there are questions around those as well.

Andrew Slaughter (Labour, Hammersmith)

The hon. Gentleman has made a very good point about how recruitment is going to be undertaken. Will it be undertaken by the probation service directly, will it be by general advertisement, will it be from existing staff? I am particularly concerned—I do not know whether my hon. Friend shares my concern—

Nadine Dorries (Conservative, Mid Bedfordshire)

Order. Keep to an intervention, please.

Andrew Slaughter (Labour, Hammersmith)

I am particularly concerned that a lot of staff employed by the probation service are agency staff and do not therefore necessarily have the skills and training, even at the moment.

Sarah Champion (Labour, Rotherham)

My hon. Friend raises a very good point. The problem is that we simply do not know the answer to that. I know that if we are looking at making staff redundancies there will be a three-month redundancy period and we are already getting terribly close to the time when we need to be issuing those notices. There are any number of issues around staff, as well as the other points that I am raising. Does the Minister agree that any drop in operational performance while all this is being rushed through will lead to delivery failures? Perhaps he will be able to alleviate my concerns by publishing his own strategic risk register, which I understand highlights this and numerous other areas in more detail.

My fourth point is about finances. The proposals necessitate wholesale reorganising of the probation and prison services and a lengthy and complex national tendering and contracting process, all of which will require significant investment. There is a concerning lack of information about the cost of the proposals. Despite the publication of several impact assessments the Ministry of Justice has yet to set out clearly the costs of the reforms and how they will be funded. The current budget for probation is approximately £800 million per year, suggesting a 10-year budget of £8 billion. The House of Commons Library has broadly estimated the 10-year value of outsourced probation costs as between £5 billion and £20 billion, which does not include the budget for the remaining public sector probation service. This suggests that a significant increase in costs is predicted, contrary to Ministry of Justice claims that the reforms are a cost-saving initiative. The Ministry of Justice also estimates that an additional 30,000 people each year will receive short prison sentences as a result of the reforms. Again, how is all this going to be paid for?

My fifth point deals with the issue of what sort of company might be tendering to run the new community rehabilitation programmes.

Sarah Champion (Labour, Rotherham)

Let me turn to what sort of body might tender to be a new community rehabilitation company. It was announced in July that internal findings in the Department had revealed “significant anomalies” in the billing practices of Serco and G4S that amounted to tens of millions of pounds of taxpayers’ money. That revelation led to a referral to the Serious Fraud Office, as well as a further more detailed audit of those companies’ activities. The result of the investigations is not expected for several months, but rather than rule out those firms from the bidding process, the pre-qualification questionnaire deadline has been delayed to give them a chance to tender. We therefore have a most outrageous contradiction. On the one hand, the Secretary of State will not delay his reforms when the people who run the service say that they would jeopardise public safety yet, on the other hand, the Department is perfectly happy to delay the tendering timetable to allow private companies that are under investigation by the Serious Fraud Office to get a look-in.

More worryingly, when the community rehabilitation companies are in the hands of those contractors, they will be able to use the excuse of commercial sensitivity to avoid scrutiny of their methods. Staff in the new national probation service could be covered by the Official Secrets Act and might not be able to speak out. Will the Minister therefore outline exactly what provisions he is making to ensure that high-quality rehabilitation services will persist, and that the new work forces will, in all cases, retain the same or better levels of professional competence and training as are now required?

I understand that the Justice Secretary has reminded senior staff in probation trusts that they have a duty to carry out the will of the Secretary of State and not to discuss issues around privatisation. Nevertheless, the chairs of the probation trusts of Derbyshire, Leicestershire and Warwickshire have written to warn of the dire consequences of rushing through the reform. I urge the Minister to listen to the people who best know and understand this service. These experts say that

“performance is bound to be damaged and that public protection failures will inevitably increase”.

They say that the fragmentation that the Minister proposes will lead to

“more systemic risks and more preventable serious attacks and deaths”.

They also say that the current timetable is

“unrealistic and unreasonable…with serious implications for service delivery and therefore increased risk to the public.”

The Government’s proposals are fundamentally flawed yet are being pushed through at a frightening pace. The probation service does not need to be privatised. If the process goes ahead, I fear that tailored local services will suffer, especially those for female offenders and those involving domestic violence cases. The public will face a greater security threat as a result. Even to consider selling the service to companies that are still being investigated by the Serious Fraud Office is simply beyond the pale, so I urge the Committee to support clause 1.

Paul Goggins (Labour, Wythenshawe and Sale East)

It is a pleasure to serve once again on a Committee with you in the Chair, Ms Dorries.

I would like to clear something up at the outset. In an intervention this morning, I described the Government’s approach to the reform of the probation service as “disingenuous”. I did so because I think that there has been a lack of candour, and a lack of information and clarity about the detail, but I did not mean to infer that the Minister serving on this Committee is any way disingenuous. He is a very effective, open and engaging Minister, and I am sure that he wants the best for the probation service.

Such has been the contribution of my colleagues, there is probably little left to add to the arguments, but I will have a go. I will start with a couple of comments about the amendment and new clauses before moving on to the wider issues, given that Mr Robertson ruled this morning that we should say what we have to say now because there will not be a stand part debate.

Amendment 51 is helpful. There was clearly a technical flaw in the amendment passed by the other place, although I am glad that it was passed, because that has given us the opportunity to scrutinise the Government’s overall proposals, which we might not otherwise have had. However, amendment 51 would improve the provision by focusing on the two aspects of the reform about which Members are most concerned: the “responsibilities of” and “contracts with” probation trusts. I compliment my hon. Friend the Member for Darlington on tabling the amendment. It serves the Committee well to focus on her proposed wording, and I shall certainly support the amendment.

My right hon. Friend the Member for Dwyfor Meirionnydd has done the Committee a great service by tabling new clauses 1 and 2. Given the substantial nature of the proposed changes, the idea of implementing them without having proper pilots is, frankly, ludicrous and very risky to public safety. Parliament should not be expected to pass legislation on reforms with such ill-defined details and costings. The Justice Secretary should be bringing to Parliament a properly worked-out scheme so that we can know exactly who will be delivering what and when, and for how much. Parliament should then be asked to approve the detailed proposals. I said that on Second Reading, and I still do not understand what the Justice Secretary is afraid of.

The Justice Secretary is utterly convinced that his approach is right and that it will work, so why does he not complete the details and then bring his proposals back to us? If they makes sense and he can show us evidence that his proposal will work, and if the detail is properly worked out, he ought to be confident that both Houses will support him. I am sceptical, but if he can show through pilots that the scheme can work, we could then consider his properly worked proposals.

Jenny Chapman (Labour, Darlington)

Does not my right hon. Friend find it strange that the Secretary of State, on his appointment, chose to cancel the pilots that had already begun? If they had continued, he could have had the best part of a year’s work to draw on in making his case.

Paul Goggins (Labour, Wythenshawe and Sale East)

I genuinely do not understand why the Justice Secretary cancelled those pilots. As my hon. Friend said, he would have had additional evidence on which to base his proposals. He has made much of the good yet limited pilots at Doncaster and Peterborough prisons, but he would have had much more evidence to use and argue with if he had let the pilots continue. If the Government want to proceed down their intended road, they should be piloting their scheme comprehensively in one part of the country to find out whether it works. If it worked, I would have to own up and say that while I had been sceptical, I now understood that this scheme would work and that I would support it. It is unfair of the Government simply to expect a blank cheque, however.

A great concern to me is that whenever an hon. Member has asked how much it will cost to supervise the 50,000 additional offenders after they have been released from their short prison sentence, the answer is that Ministers cannot tell us. They say they will pay for it from the savings generated through the contracts to supervise the 150,000 low to medium-risk offenders. That might or might not be true, but how can we know? How can Parliament be expected simply to take the Justice Secretary’s word that those savings will accrue in the way that he expects? It is unfair to expect Parliament to do that.

Clause 1 has now been added to the Bill, so the Justice Secretary ought to bring back the pilot, and then, if it works, implement a full national scheme, but Parliament should have the final say. In the end, we are talking about the safety of our constituents in the communities we represent. It is as simple as that.

The probation service has evolved over time, and we have heard references throughout today’s contributions to the different services it provides. If we go way back into the 19th century, the Church of England Temperance Society and other voluntary organisations appointed missionaries to the courts in London, and people were allowed out of prison on the condition that they reported to and were supervised by those missionaries. I am sure that the Minister would say that his reforms take the probation service back to such values. I do not underestimate the importance of the voluntary sector and its role in supporting offenders, because it has a crucial role to play. However, much has changed. My hon. Friend the Member for Rotherham rightly reminded us a few minutes ago about one of the important changes: the service to victims that the probation service now provides. We have perhaps heard too little about the impact of the proposals on victims. If an offender has served a prison sentence for a serious offence, the probation service informs the family of the victim of when the offender will come out, helps to prepare them for that and ensures that their views are known. That important role is a relatively new for the probation service.

I have been involved in the development of this aspect of policy for a while. In previous debates I said that, in 2003, the then Home Secretary, my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett), and I received a report from Lord Carter of Coles on the future of the prison and probation services. The report was controversial, but as Ministers we supported it.

The report called for three key things that have since been developed in a number of ways. The first was what was called “end-to-end management” of offenders, which was a call to ensure that the prison and probation services were more closely linked together—and, indeed, linked with wider elements of the criminal justice system, as there were far too many cracks and holes down which offenders fell. I compliment the Government on introducing a proposal that offers supervision to short-sentence prisoners, which is one of the biggest gaps. Short-sentence prisoners are one of the most difficult and chaotic groups of offenders with which to work, and the Government are right to do that. I just wish they were slightly more forthcoming about the cost of the measure and where the money will come from.

The second recommendation was a clear separation between the commissioners and providers of services, which we rightly see in other elements of public service. Lord Carter’s third recommendation, which we supported, was increased contestability in the provision of prison and probation services. At the time, that was not a popular policy with some of my colleagues, as I was reminded recently. My right hon. Friend the Member for Dwyfor Meirionnydd and I had some robust discussions about that in the past.

There has been much criticism of the private sector during our deliberations, but I am not opposed to either the private sector or the voluntary sector having a role in the delivery of probation and prison services. Indeed, through increased contestability, those sectors might play a bigger and more important part. I would argue—I think the Minister would agree—that, as a result of contestability, there have been financial savings and improvements in the running of prison services, so it has not all been doom and gloom. There have been benefits from contestability, and I am certainly not afraid of private sector involvement, although there are serious questions at the moment about two particular companies that are among the largest private providers of correctional services.

Those three elements—end-to-end offender management, separating the roles of commissioners and providers, and more contestability—eventually fed into the Offender Management Act 2007. I have quoted a speech by my noble Friend Baroness Scotland of Asthal who, as a Minister, was very closely associated with the reforms, as was my right hon. Friend the Member for Delyn (Mr Hanson), who led on the legislation effectively. It is clear to anyone who reads that Act that probation trusts were to be at the heart of the commissioning, as well as the provision, of probation services, which is right because probation trusts know their own area best.

Frankly, it is perfectly acceptable to have a range of providers of probation services, but that provision has to be properly co-ordinated. There are far too many outstanding questions about the Government’s reforms. Rushing reforms of such complexity, especially without the convincing evidence for which all Members have been calling, is playing fast and loose with public safety, which none of us wants.

The scale of the proposed change is enormous, as a number of hon. and right hon. Members have mentioned. My right hon. Friend the Member for Dwyfor Meirionnydd has already discussed the change in detail. Establishing a new national probation service which, of course, will have regional offices, will require a whole new structure, and new contracts will have to be awarded to cover 70% of the offenders who are currently supervised by the existing probation service.

Andrew Slaughter (Labour, Hammersmith)

Does my right hon. Friend agree that the 30% figure sends out exactly the wrong signals? The body covering those 30% looks like a rump service, and the nationalised service will no longer have a local, flexible element. The process seems set up to fail.

Paul Goggins (Labour, Wythenshawe and Sale East)

I said on Second Reading, as I have elsewhere, that the Justice Secretary appears to be the only Minister I can recall who wants both to nationalise and privatise a public service at the same time. This will be a national organisation. It will have local offices and, obviously, people stationed in different locations, but it will be run from Whitehall. I do not think in this day and age that that is acceptable. After all, the Government pride themselves on their localism agenda, but this goes exactly in the opposite direction.

Jenny Chapman (Labour, Darlington)

My right hon. Friend has a great deal of ministerial experience. Does he suspect that the way in which this is developing—with a national service and local CRCs—is not what the Justice Secretary had in mind? He has been forced into having a national service to retain the highest risk offenders because of political necessity.

Paul Goggins (Labour, Wythenshawe and Sale East)

I am sure that my hon. Friend is on to something, because there is incredible risk here. The 30% will include very dangerous people, such as serious sex offenders and violent people. Some will be convicted terrorists under close supervision in the community, so the officers will be carrying out a highly specialised job. Drawing the specialism into the centre in such a way, even though the Justice Secretary may be trying to minimise risk and exposure, is a high-risk strategy.

Andrew Slaughter (Labour, Hammersmith)

May I correct my right hon. Friend on one point? He says that the Government pride themselves on localism, but they are not localist. They pretend that they believe in localism, but what is happening with this policy is exactly the same as the situation with schools and with planning under the Department for Communities and Local Government: everything is being sucked into the centre and there is no local control. Again, the Government’s policy is top heavy and will not work.

Paul Goggins (Labour, Wythenshawe and Sale East)

I knew that my hon. Friend would find a better way of putting it than me. I said, perhaps slightly tongue in cheek, that this is a Government who pride themselves on localism, but they are going in entirely the opposite direction to pull all these things into the centre.

We must also consider the transfer of staff. Nearly 20,000 staff will have to be transferred, whether to the national probation service or to one of the new providers that will be contracted to deal with low and medium-risk offenders. Those staff will face uncertainty about their futures. People will have to be appointed to manage them when they are newly positioned in these organisations. About 220,000 offenders will have to be reallocated to either the low-risk or medium-risk categories, plus a further 50,000 who are expected to come into the process during the first year as part of the new supervision of short-sentence prisoners. I am told that about 500 premises belonging to the probation service will have to be allocated, but doing that in a matter of months is in itself a huge responsibility and a significant logistical task.

What will happen to the existing contracts of the probation service and the trusts? They will have to be renegotiated or ditched. People will have to make termination pay-offs and so on. As a number of my hon. Friends reminded us, the ICT systems that underpin the probation service and are absolutely essential to public safety will all have to be incorporated into the new set-up. We are not talking about doing that over a five-year time period, but in a matter of months, and I, for one, am deeply worried about that.

I remind the Committee that the reason why we are debating these issues is because of clause 1, which says that before any of the changes can come about, Ministers must come back and seek the approval of both Houses. We would want to test any proposition about which we have concerns. If the Minister wants to ditch clause 1, although I hope that even now he is considering his position on it, he needs to consider all these points. Without clause 1, hon. Members will not be able to ask such questions.

What are the costs of what is being proposed? We know that it cannot cost any more than at present, because the Department’s position is that it has to screw down costs and what it pays for services. I have been trying to work out the cumulative cost, but perhaps the Minister can help with that. As I understand it, the new contracts could cost anything up to £500 million. We have an ICT system that costs about £200 million to run, and we must also consider the additional 50,000 offenders who will be supervised for the first time. Even if the cost of supervising those offenders can be absorbed into current budgets, there is still the £13 million of additional costs that the Minister made clear will be needed to deal with the breach of orders, the court follow-up and so on.

We have not yet touched on the cost of the 70 resettlement prisons that the Minister is designing. I am interested in what he is doing—I think he is on to something—but costs associated with the preparation of prisoners for release will be linked into the probation proposal because providers will be involved on both sides of people leaving the prison gates. If Parliament is to be expected to support the Minister’s proposals, we need a much clearer picture of how much they will cost and where all the separate costs will fall.

Reference has been made to the concerns of police and crime commissioners. I am keen that the Government listen to their voices, because it was, after all, this Government who created PCCs. The commissioners have a valuable insight because they are at the head of the fight against crime and local strategies to deliver safe communities for our constituents. They conveyed their concerns in correspondence with the Justice Secretary in which they highlighted four particular areas. First, they say that taking out the probation trusts will remove at a stroke the organisation that is best able to understand the local problems in any particular area. Probation trusts are already involved in a whole series of partnerships with the police, voluntary organisations, the courts and others engaged in the criminal justice system. In other words, they are part of the local partnership to make our communities safer, yet they are just being removed. Police and crime commissioners are rightly concerned about that fact, so they are drawing attention to it.

Jenny Chapman (Labour, Darlington)

I know that the PCC in my area is so concerned that he is preparing to make a bid with the local council and employees of the local trust to provide these services which, if successful, may be a game changer in the way that we perceive the programme. That is, however, a very big if. The fact that they are prepared to put their own resources—we could argue that they would be better used elsewhere—into this project shows the real level of concern that exists.

Paul Goggins (Labour, Wythenshawe and Sale East)

My hon. Friend points out the clear concern in her constituency. I know of real concern in Greater Manchester, whose police and crime commissioner, Tony Lloyd—many of us know him well—is also worried about these developments.

Elfyn Llwyd (Plaid Cymru, Dwyfor Meirionnydd)

A fortnight or so ago, I shared a platform with a Conservative police and crime commissioner. He could not understand the need for this reform—he was wary of it and worried about it—so there is not really a political divide. He was an experienced justice of the peace, as well as a police and crime commissioner.

Paul Goggins (Labour, Wythenshawe and Sale East)

I am grateful to my right hon. Friend for that intervention. Has the Minister convened a meeting of police and crime commissioners—not just those who represent Labour, but Conservative PCCs and those of no particular political party—to get to grips with their real concerns and to listen to any suggestions? If the Minister could be persuaded to hold a pilot, perhaps my hon. Friend the Member for Darlington and her local police and crime commissioner could help the development of a model. We ought to know what the people who lead on our crime prevention strategies really think.

Jeremy Wright (Conservative, Kenilworth and Southam)

I will talk about pilots at greater length later, but to respond to the right hon. Gentleman’s specific point, we have a reference group of PCCs—from all parties and none—who assist us by setting out the detail of what they think about the plans. We will continue to listen to what they say.

Paul Goggins (Labour, Wythenshawe and Sale East)

It is reassuring that there is at least a dialogue there. In that case, I am sure that some of my concerns were articulated to the Minister in those discussions.

A second area of concern is the well covered issue of the division between low, medium and high risk. It is a false division which flies in the face of the professional judgements that probation officers are making and has all kinds of practical difficulties. I note the positive answer the Minister gave about offenders increasing their risk by going to the national probation service and then not coming back. That offers a measure of reassurance, but it is artificial fix to a problem that goes much deeper. The Minister will need to focus on that.

That leads to the third concern, which is: who has overall responsibility for offenders in the community? Dividing this area up into private providers on the one hand and the national probation service on the other will create confusion. Somebody who looks it up might be able to find out which is the responsible body, but on a day-to-day basis, when police officers are policing our communities, they need to know readily what the accountable body is. Because of the separation, that will not always be clear. The fourth point—it is the one we have all repeated ad nauseam—concerns the speed with which these reforms are being taken through and the problems this will create in terms of instability and uncertainty.

I come now to what I think is on everybody’s mind at the moment, namely G4S and Serco, the two large providers of private correctional services, which are really in turmoil at the moment. That must be causing great anxiety for the Minister, because these are two major providers. They would be expected to be major bidders for the probation contracts, yet they are in crisis at the moment, and all kinds of questions are arising from that. Let us go through what has happened—if I get any of this wrong, I am sure the Minister will be quick to correct me. As I understand it, the Justice Secretary called in PricewaterhouseCoopers to do an audit because concerns had been raised with him—he had seen things that caused him concern. It did the audit, and as a result of what it found, the Justice Secretary quite rightly came to the House on 11 July to say that he was deeply concerned. He said that he was making arrangements for the Government’s own audit to be carried out—I think by the Cabinet Office—and, at the same time, was alerting the Serious Fraud Office to the possibility that there had been criminal wrongdoing. I complimented the Justice Secretary at the time—I was there for the statement. He behaved in completely the right way and completely responsibly.

At the start of November, we learned that the Serious Fraud Office was opening this matter up as a criminal investigation, so clearly the concern was deepening. Last week—I think on Tuesday—G4S admitted it had been overcharging. It had done its own internal audit and, I think, offered to repay £24 million to the Ministry of Justice. Quite understandably, the Ministry of Justice said, “No, not at this stage, thank you. We’ll see what our own audit brings up. It might be a bigger figure, and we’ll have to see what comes out of that”. On Friday, the Justice Secretary announced that even though Serco had been the lead bidder for the contract for the three south Yorkshire prisons, it would not be awarded the contract, which would instead remain in the public sector instead.

Again, it is hard to know at this stage precisely why that decision was taken—we have not had a ministerial statement, unless I missed it, and we have certainly not had an oral statement in the House, although I am sure the Minister will clear the matter up—but all the comments seemed to indicate that this was all tied up with delays linked to the ongoing investigations into G4S and Serco. Perhaps the Minister can clarify that.

Andrew Slaughter (Labour, Hammersmith)

My right hon. Friend is being generous to the Government in relation to their approach, so let me give an alternative view. Are the Secretary of State’s protestations not rather undermined by what the Cabinet Office Minister is saying, which is that he expects Serco and G4S to emerge “renewed and stronger”? In other words, either the Government are so dependent on those companies that they cannot let them go or they are taking a rather blasé attitude to them.

Paul Goggins (Labour, Wythenshawe and Sale East)

Those comments about “renewed and stronger” are interesting when one reflects on the fact that in the past days and weeks, Serco Group’s chief executive Chris Hyman has left his post, Serco UK and Europe’s chief executive Jeremy Stafford has resigned and G4S UK’s chief executive Richard Morris, who was responsible for personally overseeing the electronic monitoring contracts, has also gone. People right at the top of those organisations have gone, a Serious Fraud Office investigation is ongoing and is likely to take some time, one of the companies has admitted it was overcharging and offered to repay, and the outstanding audit run by the Cabinet Office is still ongoing.

Andrew Slaughter (Labour, Hammersmith)

Does my right hon. Friend agree—the Minister might want to comment as well—that this is just cosmetic? In getting rid of Mr Stafford, Serco said it was

“working hard to refresh its relationship with central Government in the UK.”

In other words, “Let’s sacrifice a few people, pay them off handsomely, and then do business as usual.”

Paul Goggins (Labour, Wythenshawe and Sale East)

My hon. Friend is making a powerful point, and making it well.

The reason why I have raised this issue is that I want the Minister to address the following question when he responds, as I am sure he will: at what point would a decision be made to exclude G4S and Serco from the bidding process for the award of probation contracts under the reforms he proposes? I was pleased to hear him say towards the end of his speech on Second Reading that

“if Serco and G4S do not come out satisfactorily from the audit processes, which this Government instituted, they will not receive any contracts.”—[Official Report, 11 November 2013; Vol. 570, c. 744.]

That was a clear indication that there would be a cut-off point beyond which those companies would not be allowed to bid, but the Minister must explain what exactly he means by

“the audit processes which this Government instituted”.

Does that mean the internal Government audit being carried out by the Cabinet Office? I understand that it could report soon, which is why I asked the question that I asked in the debate on the programme motion. If there are any developments, the Committee needs to know as soon as possible.

Or was the Minister referring to the fact that the Justice Secretary initially referred the matter to the Serious Fraud Office? Did he mean that investigative audit process? If so, that could take years, and it is of absolutely no help to us whatever in considering the probation contracts that he will let in the next year or so. We need clarity. I hope that the Minister will be able to tell us that the process to which he referred is the Government’s own process and that when the Cabinet Office process concludes and reports, it will be clearer whether G4S and Serco will be allowed to bid.

Why am I singling out those two companies? They are two of the largest service providers and, in all the circumstances, given what the Government propose to do, the idea that G4S and Serco would not be involved in bidding for and running many of those services is unthinkable. They provide a lot of the capacity in the private sector. Therefore, I argue that if they are not allowed to be part of the process, it will take away a leg from the policy proposed by the Government, who would then be forced to go down the road of a pilot project, because frankly the capacity would not be there to run the system on a national scale.

It is all very well for the Justice Secretary to say that he will battle on and that this will mean that more people will be able to bid and become providers, but there is a serious question about the capacity to provide services. I am sure that the Minister will want to say more about that when he responds.

Sarah Champion (Labour, Rotherham)

On that point, would it be possible for the existing probation trusts to run the under 12 months pilot, to see whether that is an acceptable way forward? I agree with my right hon. Friend. I cannot see who else in the market could provide those services if those two companies were removed.

Paul Goggins (Labour, Wythenshawe and Sale East)

Absolutely. If there were to be one pilot, I would hope that an existing, high-performing probation trust would be given the opportunity to become a pilot area. There may be more than one pilot, which would extend the options. I cannot understand why any Government would want to remove probation trusts from the scene having established them, improved their performance and put them at the heart of local partnerships, where they have helped to drive down offending and reoffending. That seems incredible.

Alex Cunningham (Labour, Stockton North)

My hon. Friend talks of partnerships and the role of probation. I chaired the Children’s Trust when it was founded in Stockton-on-Tees. The probation service was a tremendous partner in that—good attenders and they even put their hand in their pocket to meet some of the costs. I wonder what role the Government foresee for a private provider. Will they join the Children’s Trust board in the same way, or are we going to lose the togetherness we have in our local society?

Paul Goggins (Labour, Wythenshawe and Sale East)

My hon. Friend makes a good practical point about local partnerships and where new private or voluntary providers would fit in. It is not clear how they would fit in. We heard earlier about problems of information sharing and building up trust and confidence. Why do that when there is already an organisation in place that has those established relationships? My hon. Friend makes a powerful point.

I have spoken long enough and intend to sit down soon, but first, let me just add to the concerns and questions I have raised by emphasising two or three points. Much has been made of the role of voluntary organisations. I support their role in our prisons and in the delivery of probation services. They already do a fine job. The danger is that many of them feel that they will be squeezed out and excluded by the ongoing bidding process. I co-chair the all-party group on penal affairs with Lord Ramsbotham, who was the prime mover of clause 1. Such is the level of concern brought to our attention, we are having a meeting next week to listen to voluntary organisations and their concerns. There is a real concern that far from expanding their role, what the Government propose could constrict it for some of them.

I debated uptariffing with the Minister on Second Reading. He reassured me that he is having extensive discussions with magistrates and the Sentencing Council. I was reassured by that, but there is a real danger that magistrates might be tempted to add on the extra bit of custody to the community sentence. If the Minister has anything to add, it would be helpful.

I will not dwell on the payment by results model, of which others have spoken. It looks to me increasingly like straight privatisation rather than a payment by results model that we would recognise, with very small amounts reckoned to be paid out to providers on completion of their targets. That is a real worry. We would be pleased to hear anything the Minister can tell us about the model for payment by results and what it is likely to look like.

I will conclude by saying what the Opposition want. The right hon. Member for Dwyfor Meirionnydd and my hon. Friend the Member for Darlington made the point plain this morning, and I emphasised it in an intervention, that while we have major reservations about what the Government propose, they are the Government and it is their right to bring forward proposals and test the will of the House. As much as we have reservations about their proposals, if they were prepared to pilot and properly evaluate them and bring forward the evidence, we would be forced to look again and test our assumptions and judgments. I simply ask the Minister, even at this late stage, to consider that approach. It would minimise the risk to the public and build important consensus around the delivery of probation and prison services.

Jeremy Wright (Conservative, Kenilworth and Southam)

It is a pleasure to see you in the chair, Ms Dorries. I am grateful to all Members who have spoken in this well-balanced debate, and I entirely understand the genuine concerns expressed. Having said that, I am afraid I am not persuaded that the amendment should be supported or that clause 1 should stay part of the Bill, and I would like to explain why.

I want to do two things in the course of my remarks about why clause 1 should not remain in the Bill and why I cannot accept the amendments. I will first explain in some detail the reforms to probation and rehabilitation that we intend to make, because I think there are some misunderstandings, not necessarily from members of the Committee, but more broadly, about what we are trying to do. I also want to remind the Committee of the legislative basis for our reforms, because there is a little amnesia on the Opposition Benches about what has already been passed and what it gives this Government the opportunity to do. It is therefore necessary to look at the Offender Management Act 2007, which is entirely relevant to the amendments before us—both amendment 51 and the new clauses.

I will start by quoting again—I make no apologies for doing so, because it is the crucial part of the Act—from section 3(2) of the Offender Management Act. It says:

“The Secretary of State may make contractual or other arrangements with any other person for the making of the probation provision”.

I have heard many Opposition members of the Committee make the point that this Government have misunderstood what that Act was all about. They claim that it was all about the delivery of services through probation trusts. I have to repeat that the fact remains that the power that they legislated for is clear and unambiguous: contractual or other arrangements may be made with any other person; not solely with probation trusts, not solely with trusts commissioning other providers, but with any other person.

Sarah Champion (Labour, Rotherham)

I really do not want to repeat this yet again—I think it is the fourth time that we have had this exchange—but the Minister should not explain this as a statement of fact, because it is open to dispute. We completely disagree with the position that the Minister takes on that specific piece of information. As he knows, there will be judicial review and he should not present this as something that is beyond dispute.

Jeremy Wright (Conservative, Kenilworth and Southam)

What is absolutely beyond dispute is what is in the Offender Management Act. What I have just read out is exactly what section 3(2) of the Act says. If she disputes that, I am happy to compare her copy of the Offender Management Act with mine. That is clearly what it says.

Andrew Slaughter (Labour, Hammersmith)

The Minister is diminishing his argument. He is being very pettifogging about this. The same arguments have been made for lots of pieces of legislation. The same argument could have been made about a lot of what was in the Legal Aid, Sentencing and Punishment of Offenders Act 2012, when it was going through, but that was properly scrutinised over nearly a year. This is such fundamental change, more fundamental than what is in the Bill, that the Government should have brought this before the House. Whether it can get away with it, is a different issue, as the Minister is arguing, but it should have brought this before the House.

Jeremy Wright (Conservative, Kenilworth and Southam)

The hon. Gentleman is wrong. This is a discussion about whether there is a need for this Bill to be changed to allow for further parliamentary scrutiny or for piloting. The point I am trying to make is that the authority to do what we are doing is very clearly set out in the Offender Management Act. I will come on in a little more detail to explain why it is that I do not believe that this is an accident or that the drafters of the Offender Management Act did not quite understand what they were doing. I think it is very clear that what the Offender Management Act gives licence to do is very much along the lines of what we are doing. As I will explain, it actually gives us licence to do more than what we are doing. I do not think that that is an accident.

Sarah Champion (Labour, Rotherham)

I must take exception to what the Minister has said. It has been made very clear that that is not what that Act is intended to be used for. The provision to which the Minister repeatedly refers was intended to deal with a situation where a trust was failing—the Act-created trust. It was not intended to be used to abolish trusts. It is very clear.

Jeremy Wright (Conservative, Kenilworth and Southam)

The quote that I have just given is from section 3(2). That section is headed “Power to make arrangements for the provision of probation services”. The comments that I made to the hon. Lady this morning were in relation to a different section, section 5, which is headed “Power to establish probation trusts”; it is a different point. I am talking about the power of the Secretary of State to make arrangements with those who are not probations trusts—indeed, those who are not in the public sector—to provide probation services. That power was clearly and unambiguously given to the Secretary of State in the Offender Management Act. Today’s Labour party may regret having done that, but in 2007 the Labour Government did that without ambiguity.

Elfyn Llwyd (Plaid Cymru, Dwyfor Meirionnydd)

The points that the Minister is making are likely to fall within the doctrine of Pepper v. Hart, and people in other places will pore over what he has said. Earlier, he coupled his non-acceptance of amendment 51 with my new clauses. Where in the Offender Management Act does it say that potentially dangerous changes to the law should never be piloted?

Jeremy Wright (Conservative, Kenilworth and Southam)

The point is rather the opposite. Where does it say in the Offender Management Act that those things should be piloted?

Let me deal with the right hon. Gentleman’s point about Pepper v. Hart. He is a good lawyer, so he may know this better than I, but my understanding of Pepper v. Hart—in other words, reference to Hansardon the passage of an Act—is that it is of assistance to the courts when an Act is not clear. It is my contention that this Act could not be clearer. It is there in black and white that the previous Government decided that it is appropriate for the Secretary of State to have the power to contract for probation services “with any other person”. It does not say “any other person in the public sector”.

Since the right hon. Gentleman has raised the issue of Hansard and Pepper v. Hart, let me give some context. The noble Lord Reid, the then Secretary of State, on Second Reading in the Commons said:

“The Secretary of State, not the probation boards”—

as they were then called—

“will be responsible for ensuring service provision by entering into contracts with the public, private or voluntary sectors.”—[Official Report, 11 December 2006; Vol. 454, c. 593.]

The right hon. Gentleman referred to what Baroness Scotland said in the other place. She also spoke about the issue of whether there should be central or local commissioning, which is something that he and others have spoken about. On Report in the other place, she said:

“It places the statutory duty with the Secretary of State, who then commissions the majority of services through a lead provider—a lead local provider.”—[Official Report, House of Lords, 27 June 2007; Vol. 693, c. 639.]

Again, the Bill makes it clear that it is for the Secretary of State to do the commissioning if he so chooses, not for probation trusts.

The other interesting point, when one looks at the passage of the Offender Management Act in Hansard, is that it is clear that the previous Government did not take the view that lead providers would be only from the public sector for perpetuity. In fact, they said that the guarantee that lead providers would be from the public sector would last for a short period only. On Third Reading, the then Secretary of State said:

“I can therefore give an assurance today…that the core offender management tasks of the probation service—for example, offender report writing, offender supervision and breach proceedings—will remain in the public sector for the next three years.”—[Official Report, 28 February 2007; Vol. 1023, c. 457.]

He did not say “forever”, but

“for the next three years.”

It is of note that he included three things in his description. We do not intend our reforms to move the responsibility for offender report writing and breach proceedings from the public sector to the private sector. However, the then Secretary of State made it clear that there was no guarantee that offender supervision would not move to the private sector after those three years were up. My final point is that nothing in the 2007 Act requires Parliament to approve the Secretary of State’s proposal to commission services involving the supervision of offenders from any other person.

Andrew Slaughter (Labour, Hammersmith)

Where does the Minister find, either in the Act or in Hansard, that what was envisaged was the wholesale privatisation, without the public sector having permission to bid, of 70% of the service?

Jeremy Wright (Conservative, Kenilworth and Southam)

The hon. Gentleman makes an interesting point. What we propose to do is to contract out the supervision of medium and low-risk offenders. What it would seem that the then Secretary of State had in mind in 2007 was the contracting out potentially of all offender management for all offenders. It is therefore interesting that, given the opportunity to do so, the previous Labour Government did not restrict the possible outsourcing of offender management to contracted-out providers. They did not say, as we are, that there is merit in higher-risk offenders being retained by the public sector. They said that they could give reassurances for three years—no doubt, for the reasons to which the right hon. Member for Dwyfor Meirionnydd adverted of internal party management. The Secretary of State promised that offender management would not be privatised before the 2010 election, but he made no guarantees thereafter. The Committee will have noted that we are now more than three years on from 2007. It is therefore worth reminding ourselves of what actually happened in the Offender Management Act 2007.

Andrew Slaughter (Labour, Hammersmith)

I am grateful to the Minister for confirming that there is no authority in the 2007 Act or Hansard for what he is saying. I suggest, although I know no more than he what was in the mind of Lord Reid at the time, that what, at best, was countenanced would be a mixed economy and not the extreme ideological lengths that this Government go to of not allowing any public sector bids.

Jeremy Wright (Conservative, Kenilworth and Southam)

We again need to return to the point. At this stage, we are discussing whether it is necessary to allow for a further opportunity for Parliament to halt the reforms. Again, it is clear from looking at not only the text of the Offender Management Act 2007, but also the accompanying Hansard that what was envisioned was clear and that there was no doubt in the minds of those who were discussing the 2007 Act that the contracting out of offender management could be under discussion. I repeat that no restriction was placed on possible contracting out in the 2007 Act, but we intend to restrict it.

Jenny Chapman (Labour, Darlington)

It clear that there is a fundamental dispute over this point. The Minister knows that there is to be an application for judicial review, so, just to make the Committee aware, what effect might that have on the progress of the Minister’s plans?

Jeremy Wright (Conservative, Kenilworth and Southam)

As the hon. Lady would expect, I cannot possibly speculate on a judicial review application that I have not seen and that may or may not happen. I struggle to see, however, exactly what that judicial review intends to cover. I have read to the Committee exactly what the Offender Management Act 2007 states and the quotes from Hansard demonstrate pretty clearly what was in the mind of the then Secretary of State. If there is to be a judicial review, it will no doubt be heard in the appropriate way.

We are dealing with clause 1, the amendment and new clauses, so let me say something about clause 1. It is recognised, not least by the hon. Lady, that clause 1 is simply too broad. It says that Parliament should have a say in almost any change to a probation arrangement, which is clearly not sensible. To be fair to the hon. Lady, she accepts that and amendment 51 is designed to remedy that issue. However, the amendment does not deal with my point about the Offender Management Act 2007. It does not deal with the fact that, in 2007, Parliament did not legislate for any such further check by Parliament, which is highly relevant to what we need to consider.

Unfortunately, that is not all that is wrong with amendment 51, which would still make it difficult for even existing trusts to operate. It would mean, for example, that small changes to current contracts, which do happen now, would require parliamentary approval. With 35 trusts and 35 contracts, the amendment would result in more bureaucracy and more delays in ensuring that offenders are managed in the community, as we all want to see. Let me illustrate that point with some recent changes made to current contracts. Several changes have been made to allow staff to be seconded from and to probation trusts. Would those secondments need the approval of Parliament? A small change to the arrangements for an attendance centre in one trust area meant a change to a contract, the value of which was £95. Does the hon. Lady want Parliament to approve such matters?

Jenny Chapman (Labour, Darlington)

As the Minister knows, clause 1 was included out of sheer frustration at the Government not allowing any opportunity to debate wholesale reform of the service in either House. We really should not need clause 1. He has been very creative in finding ways in which it is deficient, and it would have been better had we not had to have clause 1 at all, but since we are forced to have it, we would like to keep it there.

Jeremy Wright (Conservative, Kenilworth and Southam)

I am saying what I think is wrong with amendment 51. I do not know how much frustration the hon. Lady felt when she wrote that, but we should make sure that when we draft amendments they do the job that we intend and do not have adverse consequences. I am pointing out that there are problems with this amendment, which is why the Government cannot accept it. For example, the effect of amendment 51 is also unclear. What do “the responsibilities of probation trusts” cover? Does it mean only the purposes of the trusts, or does it go wider and cover details such as the current statutory responsibilities—for example, the duty- to inform offenders where and to whom they must report? Is it the intention of the Opposition that this level of detail should be subject to parliamentary scrutiny?

Jenny Chapman (Labour, Darlington)

It is, obviously.

Jeremy Wright (Conservative, Kenilworth and Southam)

If it is, and the hon. Lady says that it is, it is impractical, I fear, because it would curtail the ability of the trust to take on new responsibilities in the light of any legislative changes to the sentencing and supervision of offenders. So I cannot accept that amendment 51 is a sensible addition to the clause.

I talked about parliamentary approval in more general terms in connection with the Offender Management Act 2007. It is not, of course, the case that when the 2007 Act was being considered parliamentary approval was forgotten about. Indeed parliamentary approval is required for a change to section 4 of that Act, which was added to the Bill at a late stage and which ring-fences the provision of advice to courts to the public sector. Section 15 of the 2007 Act provides a power to repeal section 4 by order, but only with the approval of both Houses, so, in that set of circumstances, those drafting the 2007 Act thought it appropriate to have a mechanism for further parliamentary approval. It follows by implication, of course, that in all other respects they did not think that that was appropriate, so the existence of that power demonstrates, I suggest, that those who were taking the 2007 Act through this House and the other place decided that it was not appropriate to do what the hon. Lady and her colleagues are now asking us to do.

It is also perhaps worth mentioning that the fact that they had constructed a parliamentary process to allow section 4, which ring-fences the provision of advice to courts to the public sector, to be repealed suggests that they were not eliminating that as a possible future change. Again, we are not proposing anything other than that the public sector should retain responsibility for advice to court.

Paul Goggins (Labour, Wythenshawe and Sale East)

I am listening carefully to the Minister. He knows why Lord Ramsbotham and others put clause 1 into the Bill. It was because the Justice Secretary is planning the biggest shake-up in probation in its 107-year history without any proper reference to Parliament. Will he address the issue of how he intends to involve Parliament in the detailed scrutiny of his proposals?

Jeremy Wright (Conservative, Kenilworth and Southam)

I will come back to that, but the point I am making at the moment is about what the previous Government decided would be appropriate should significant changes to the probation service take place. The 2007 Act sets out what should and what should not need to happen if further changes are envisaged to the way probation is managed. Therefore, it would be quite wrong for this Committee to reach any conclusions on these amendments—or, indeed, on clause 1 as a whole—without recognising what happened in 2007.

Let me try to summarise where we got to with the 2007 Act. It seems to me that the position of the Labour party at that point was, first, that only advice to courts would be ring-fenced to the public sector; secondly, that that ring fence could be removed if necessary; thirdly that supervision of any offender could be competed outside the public sector; and, fourthly, that the public sector monopoly for lead providers would only be guaranteed for three years. That is what we must deduce from the passage of the 2007 Act and I suggest that the Committee contrast that with this Government’s position that not only advice to courts but also supervision of high-risk offenders will remain in the public sector.

Andrew Slaughter (Labour, Hammersmith)

Even if the Minister is right about that, and I do not think he is, he is entirely missing the point. The Government’s new policy is a radical change and they ought to have the courage and the discipline to defend it in the House. It is a course of conduct; it is happening now with the transformation of legal aid and judicial review reforms. The Secretary of State does not have the will or the courage to come to the House and defend his own policies.

Jeremy Wright (Conservative, Kenilworth and Southam)

I shall do exactly that and explain why we think our proposal is the right thing to do. It will of course be the third time I have done it: I have done it in an Opposition day debate and on Second Reading, and I shall do it again today. There is no reluctance on my part to defend what we are doing, and I am very happy to do it again.

It is the hon. Gentleman who is missing the point. The discussion of these amendments and this part of the Bill is about whether it is necessary and appropriate for Parliament to have a further say in significant changes to the probation service. I absolutely accept the point that the changes are significant. The point I am making is that back in 2007, significant changes to the probation service were at least envisaged—whether that Government intended to implement them is a moot point, but significant changes were envisaged—and given the opportunity to do so, the Labour Members legislating at that time decided not to impose restrictions. It is therefore odd for them to come here today and tell us that we should impose the things that they were unwilling to impose.

Jenny Chapman rose—

Jeremy Wright (Conservative, Kenilworth and Southam)

One last time, before I move on.

Jenny Chapman (Labour, Darlington)

I am very grateful to the Minister. Does he not find it odd that in every debate we have had—Opposition day, Second Reading, and a whole day’s debate today—every contribution has been on clause 1? Obviously we disagree on the 2007 Act, but does he not accept that there is a huge desire within Parliament to get under the skin of the proposals and debate them properly? That is why it is appropriate to include the clause.

Jeremy Wright (Conservative, Kenilworth and Southam)

As I have tried to explain, I do not think the clause should remain in the Bill. I will explain why I think our proposed general reforms are the right ones. The reason why we have not come to the House to seek legislative consent for the vast majority of what we wish to do— I am hopeful and optimistic that we might one day get on to the things that we do need legislative consent for—is that the Offender Management Act that the Labour Government passed gives us full authority to do them. There is no getting away from that, however hard the hon. Lady tries.

I will move on to talk about what the reforms are intended to do. As the hon. Lady said, the vast majority of the debate that has taken place, not only today but on other occasions, too, has focused on the generality of the reforms. It is right that I try to set out what we are doing and why. Let met start with the context of the reforms. Reoffending rates are where we begin. Again, there is general acceptance in Committee and indeed in the House that reoffending rates are too high. They have barely changed in the past decade, and I think that all hon. Members will agree that that is not what our constituents would wish to see unchanged.

The failure to lower reoffending rates to a significant extent comes in spite of a 70% increase in spending on probation services between 1998-99 and 2010-11. We all know that the cost of reoffending to victims and communities is particularly high—the hon. Member for Stockton North made this point. In addition to the physical and emotional trauma that it causes, there is the financial cost. As members of the Committee may know, the National Audit Office estimates that the total cost to the economy of crime committed by recent ex-prisoners is between £9.5 billion and £13 billion every year.

Like all Government Departments, as I think Members recognise, the Ministry of Justice is required to make significant savings by 2015. For the sake of brevity, I will not go into the reasons why the Government are so strapped for cash and whose fault that might be, but we are required to make savings none the less. Funding for the supervision of offenders is of the order of £800 million a year—a sizable proportion of the Ministry’s budget. We are faced with the challenge of trying to do better for less, so we have two choices. We can impose further cuts on the structures that we have, risking increases in reoffending and leaving short-sentence offenders—the most prolific of all offenders; the ones that we all agree need extra attention—without support after release. That is choice number one. Choice number two is that we can reform the system so that it provides more effective rehabilitation at better value to the taxpayer, in a way that is sustainable for the future and reinvests some of the savings in support of those under 12-month prisoners. Again, we all agree that this is a worthwhile objective. I make it clear that I do not doubt for a moment the sincerity of all those who said that this is our common aim.

I will also make this point, which I have said before and am happy to repeat. It is important that in my position I say this during the course of these debates. Nothing in these reforms seeks to diminish the excellent work done by people in probation trusts. I absolutely agree with the hon. Member for Rotherham, from going up and down the country meeting people working within probation, that many do an outstanding job. There is no contradiction between believing that this is the case and believing that significant reform is needed to bring reoffending rates down.

Sarah Champion (Labour, Rotherham)

I thank the Minister for that and for sharing my enthusiasm for probation trusts. However, if 70% of his workload was taken away, he would take it as a personal criticism. I cannot see how the probation trusts can see otherwise.

Jeremy Wright (Conservative, Kenilworth and Southam)

I would hope and expect that those who do such good work will be able to thrive and do even better under the new system. We seek to give those individuals even more latitude and professional discretion to do their good work. I do not see this as any contrast or conflict. However, we cannot create any sustainable system for the future with the delivery model that we have of 35 public sector probation trusts. It is interesting that the hon. Lady in many ways now accepts that and says that if she were in power she would not necessarily proceed with all 35 trusts and would make changes. That must be sensible.

What we want to do instead is bring in the best of the public, voluntary and private sectors to work with offenders and, as the right hon. Member for Wythenshawe and Sale East mentioned, to restructure the prison system at the same time to allow better continuity of support after release. These are not piecemeal changes, simply to allow the Ministry to live within its means for a few more years. They are an attempt to put probation services on a footing that is sustainable in the future and which has a chance of delivering further reductions in reoffending.

At the heart of our proposals is the aim to open up supervision of low and medium-risk offenders to a diverse range of new rehabilitation providers. As I said, the aim is to bring in the best of all sectors to support innovative approaches to addressing the causes of reoffending. To harness the innovation of a wide range of providers and thereby drive improvement in services was exactly the stated intention of the Offender Management Act 2007, which the Opposition now seem to wish to row back from. Twenty-one new community rehabilitation companies will be established across England and Wales, bringing in new ways of working. It is open to organisations from the private, voluntary and community sectors, as well as those currently working in probation trusts, to bid for those first tier contracts, That is very much the point that my hon. Friend the Member for Solihull made earlier. There is an opportunity for those who—as the hon. Lady and I agree—do good work within the probation trust, so they can continue to do it as part of a mutual or other special purpose vehicle.

Alex Cunningham (Labour, Stockton North)

I take a quite simple approach to these things and wonder what professional value these private sector companies will bring to the probation service, other than their tremendous ability to drive down costs and terms and conditions and to make a good profit?

Jeremy Wright (Conservative, Kenilworth and Southam)

The hon. Gentleman needs to see past his irrational hatred of the private sector. It is not the case that simply because someone who does a very good job now as a public sector probation worker and goes to work for a different type of employer will suddenly lose all their values and ethics and will be driven by their employer to behave differently. What the hon. Gentleman must bear in mind is that the system we are designing will allow anybody from the private sector to make a profit only if they succeed in bringing down reoffending. There is a clear motivation, but it is absolutely the motivation that we would want any probation provider to have, which is to bring down reoffending.

I said that mutuals are a way in which current probation trust staff can engage in this process. It is worth pointing out that a number of staff within probation trusts have formed mutuals and expressed an interest in bidding in the competition. The Cabinet Office has made available funding from its £10 million mutuals support programme, as well as access to coaching and capacity building from experienced commercial mentors and leaders in the field.

We want to ensure that smaller organisations from the voluntary and community sectors and social enterprises can also play a key role in delivering rehabilitation. They may do that as subcontractors forming part of fair and sustainable supply chains. A number of hon. Members mentioned their concerns about this on Second Reading and it has come up again here today. That is absolutely our concern too.

The Committee may like to know that in July the Ministry of Justice awarded £150,000 to the Association of Chief Executives of Voluntary Organisations to deliver a series of skills and information workshops aimed at supporting the voluntary sector and mutuals to compete for contracts and deliver services to cut reoffending. We have also run a registration process for the smaller providers, in order to maximise opportunities for them to be involved. During the tender evaluation phase we will require potential tier 1 providers to demonstrate their plans for delivering a fair and transparent selection and appointment process of smaller organisations.

We are looking to achieve best value for the taxpayer, but I stress that the competition for CRCs is not about going for the lowest possible price. Successful bidders will be those who can demonstrate that they will deliver high-quality, cost-effective services that bring new ideas to reduce reoffending.

Today many hon. Members have spoken about risk, and much has been made of the so-called leaked risk register. Simply observe this: this Government is far from unique in not disclosing risk registers. I suspect that future Governments—of whatever political colour—will take exactly the same view. As at the very least the right hon. Member for Wythenshawe and Sale East well knows, this is so that there is a space for discussion about policy development which is not compromised by information coming out in dribs and drabs, and potentially being misunderstood and taken out of context.

In this context, there is a real risk that it is not helpful to start listing percentages that are not about whether an effort has been made to mitigate a risk, but are simply about unmitigated risks. Of course, on all sorts of different enterprises, if no action at all were taken to mitigate a risk it would be at a very high level. That is in no way what we are proposing, as I have tried to explain.

Jenny Chapman (Labour, Darlington)

What the Minister is saying is helpful, and we accept to a point the reasons why the Government are not enthusiastic about publishing. However, the Minister knows that this register has been leaked, and he knows that there is a great deal of anxiety about what it contains and that certain percentages have been disclosed. The 80% drop in operational performance is the one at the front of my mind. Given that that information is now out there, will the Minister explain what it means? As he rightly points out, it has led to a great deal of confusion. Will he now take the opportunity to explain what an 80% drop in performance looks like?

Jeremy Wright (Conservative, Kenilworth and Southam)

I am certainly not going to do that, because I do not expect to be looking at that here. It is very important that we understand that risks that are left unmitigated can be at very high levels, but that is absolutely not what the Government are proposing here. Regarding the reforms that we are pursuing, I am setting out—I hope in some detail—that we have considered these risks and that we have done something to mitigate those risks, so that they can be properly managed.

Let me come to the most obvious of them, the management of offender risk. This is a legitimate concern of those on the Committee and indeed those beyond. I absolutely understand and accept—and I hope have done so from the beginning—that risk is a dynamic concept. People do not remain within an initial risk category in every case, but it is worth making it clear that we are creating a new national probation service to directly manage all of those offenders who pose a high risk of serious harm, together with any other sexual or violent offenders subject to multiagency public protection arrangements —MAPPA.

Points have been made around whether or not it is sensible to have a national probation service. I would simply make an observation, which may be familiar to the right hon. Member for Wythenshawe and Sale East: there has been concern within the probation service for a very long time that it does not have parity with the Prison Service, which is a national organisation. There is considerable merit in having a national identity for the probation service, in order to raise the level of esteem in which those who work in that system are held. That is a worthwhile objective and the national probation service helps to give us that. It is also a good thing to have a concentration of specialism and expertise in the management of the most difficult and dangerous offenders, and that is what we will have.

Elfyn Llwyd (Plaid Cymru, Dwyfor Meirionnydd)

While the Minister is talking about risk, will he tell us how he would suggest one mitigates an aggressive timetable?

Jeremy Wright (Conservative, Kenilworth and Southam)

One would have to accept that the risk of that timetable was unacceptably high. For reasons that I want to come on to, I do not accept that the risks of the timetable that we are pursuing are too high. It is a timetable that can be properly managed. It is certainly challenging—I have never denied that—but I do not believe that it is dangerous, and it can be achieved. I will come back to that in a little more detail, but I want to finish the point on risk and, particularly, changes in risk as that is a crucial part of our reforms.

It is important to recognise that at the start of an offender’s sentence, the national probation service—in other words, public sector probation officers—will make an initial assessment of the risk of causing serious harm posed by an offender. All offenders assessed as posing a high risk of serious harm at that point will be the responsibly of the NPS for the rest of their sentence.

For those who are assessed as low or medium-risk offenders by a public sector probation officer at the point of sentence, CRCs will be required to manage any risk of serious harm that the offender may present. They will be required to have appropriately trained staff and robust procedures for the management of cases where the risk of serious harm escalates to high during the course of the offender’s supervision. They will be contractually required to refer cases back to the NPS if they consider that the risk of serious harm may be escalating to high. The NPS will determine if the risk has escalated to high and, if so, will take over the management of the case. The decision-making capacity, therefore, remains with the national probation service.

Just to add, the NPS can also, at the point of allocation, identify specific circumstances which, should they materialise, could indicate a raised risk of serious harm. In those instances, the CRC will be required to refer the case back to the NPS for a review of the risk assessment when the risk factors identified have materialised.

I want so say something about through-the-gate support, which the right hon. Member for Wythenshawe and Sale East mentioned. He is right that that is an important part of our reforms. We are introducing new support for offenders through the gate from custody into the community. In custody, a new resettlement service will be provided for all offenders before they are released, tailored to their individual needs, which will likely include support in finding accommodation, family support, mentoring and financial advice.

Services in custody will be underpinned by changes to the way that the prison estate is organised. We will join together rehabilitation in custody and in the community through a new class of resettlement prisons so that, in most cases, the same professional who works with offenders in custody can continue that rehabilitation work in the community. The right hon. Gentleman asked, in particular, about the cost of that additional work. That will be included in the CRC contracts, so we expect CRCs to do that work.

I turn to the payment-by-results mechanisms and comments that hon. Members made about that. That includes the payment-by-results components that will encourage providers to focus on achieving reoffending reductions. The mechanism was developed on the basis that providers will be rewarded with success payments when they achieve an offender’s complete desistence from crime for a 12-month period. In answer to the hon. Member for Stockton North, who was concerned about whether that is the right period, the evidence shows us that most people who will reoffend do so within 12 months; that is why we use that as a measurement period. The payments will also take into account total number of reoffences committed by the cohort of offenders that providers are responsible for rehabilitating.

Alex Cunningham (Labour, Stockton North)

The Minister said that most offenders who are likely to reoffend will do so within 12 months, but does he know what proportion that would be? If offenders reoffend beyond the 12-month period, are not the providers being let off the hook?

Jeremy Wright (Conservative, Kenilworth and Southam)

I do not know that off hand; I will try to come back to the hon. Gentleman later with a precise figure, but certainly the majority of those who will reoffend do so within 12 months. Therefore, that has been for some time a recognised period over which reoffending is measured. I was talking about the perverse incentives, which hon. Members were perfectly legitimately concerned about in the context of a PBR mechanism. As I was explaining, we will develop a mix of—if the jargon can be forgiven—binary and frequency measures. Those will ensure that providers do not neglect the most difficult offenders and those who have already offended.

The hon. Member for Rotherham again raised the question about perverse incentives, either to move or wrongly retain those who should be moving from medium to high risk. There are two points to make. The first is to again repeat that the national probation service will make a decision here; it will not be for the CRC to decide whether someone has moved from medium to high risk. The NPS, of course, does not have any kind of financial incentive to make a decision one way or the other. The other point to make is that in relation to those CRCs that may take the view that it is better to move someone on and not worry about them anymore in case they do something terrible, will have to bear in mind that that individual will stay within its cohort for PBR purposes. In other words, should that individual reoffend, that will still cause the CRC to lose its success payment for that individual. There is no motivation for CRCs to move people who are awkward.

Jenny Chapman (Labour, Darlington)

The Minister is being generous in giving way. This is a point that worries me a great deal. From the way the Minister is explaining it, it appears to be getting really rather complicated. It is a concern that an NPS probation officer would be making a decision based on information that will—hopefully—be received from the CRC about an offender whom they may or may not have met. The issue is about how robust that process will be, because we are far from assured that that is going to be as reliable as we want it to be.

Jeremy Wright (Conservative, Kenilworth and Southam)

First, I do not anticipate that the NPS assessment will be made solely on paper; I imagine that an NPS operative would want to see that individual face to face in order to make that judgment, but that would be for them to decide. Secondly, in relation to information transfer and communication, the hon. Lady is absolutely right—she and I have agreed on many previous occasions—that any system relies on good communication, and this system should rely on it too. That is, communication between those who work for CRCs and those who work for the NPS, just as now it relies on communication between individuals who work with the system as it is.

Jenny Chapman (Labour, Darlington)

What the Minister is saying is helpful, but he is playing down the importance of speed in these decisions. Sometimes something will happen and a decision will need to be made about risk almost instantly. If I understand what he says correctly, that is going to be more difficult in the future than it is at the moment.

Jeremy Wright (Conservative, Kenilworth and Southam)

It is quite important in this context to bear in mind that what we believe would be the most sensible way of operating in many cases, would be for co-location to happen; in other words, CRCs and representatives of the NPS located in the same place. That is certainly what will happen in April when the initial transfer takes place—and I promise the right hon. Member for Wythenshawe and Sale East who is being very patient that I will come to this. We believe that it would be a sensible thing for CRCs and the NPS to consider in the longer term.

The Secretary of State’s vision of all of this has come in for some pretty heavy criticism in the course of the day, but it has to be said that in relation to what he has always said about this, that was the way in which he envisaged this system working. One of the reasons for that is precisely the point that the hon. Lady makes.

Sarah Champion (Labour, Rotherham)

I am listening intently to what the Minister is saying, and it sounds as though we already have that within the probation trust.

Jeremy Wright (Conservative, Kenilworth and Southam)

I am sorry, have what within the probation trust?

Sarah Champion (Labour, Rotherham)

We have the co-location. We have the team all in one place so that they can share information immediately with each other. It sounds as though the Minister is reinventing what we have already got.

Jeremy Wright (Conservative, Kenilworth and Southam)

As I hope I have indicated, there are certainly aspects of what goes on now that we would not wish to lose. However, the reason for the reforms that we are bringing in, is to enable us to release the savings that we need to pay for an additional 50,000 offenders. That is the fundamental point at work here. If we could do that by leaving probation trusts exactly as they are, of course we would have considered doing so. However, we do not believe that that is possible or feasible.

Let me move on because I am conscious that there are other points that I need to get to too. The payment-by-results pilots that have already taken place or are in progress have been talked about, particularly those at HMP Peterborough and Doncaster. The point has been made that these are prison-based pilots. In a way that is true, but certainly when one looks at the Peterborough pilot, its basis is that offenders who are in this sub-12-month category will be supported in the closing stages of their sentence and then for 12 months thereafter in the community. That is a fairly close approximation to what we are proposing to do. However, there is no doubt that our experience with those pilots—and with others—has increased our confidence about designing robust contracts that drive the required behaviours and help generate improved value for money.

Both CRCs and the NPS will be held to account by the existing National Offender Management Service, which will ensure that the overall system performs in line with the objectives and priorities set out by Ministers and the Ministry of Justice. Robust account management and performance measures set by NOMs will be combined with appropriate audit arrangements and inspections by HMI Probation to regulate the system. Again, I think it was the hon. Member for Stockton North who made the point that there are tough inspections already in place for probation and we expect them to apply equally to all providers of probation services from whichever sector they come.

I have been asked what happens in the event of failures. In the event of the failure of a complete provider, one of two things could happen. Either the Secretary of State could step in, or another provider could take over delivery. We will produce draft contracts early next year which will give a better indication of how that might be done.

I am not going to get away with speaking for this long on this subject without mentioning G4S and Serco. However, I am going to disappoint hon. and right hon. Members opposite because, as I said at the outset, there is a very limited amount that I can say. In relation to the specific point about what I have said before, it has been clear that, in relation to electronic-monitoring contracts, the original decision that Ministers in this Government took was that it was appropriate to begin an audit process. That is the audit process to which the right hon. Gentleman referred involving PwC. That process has been overtaken to some degree by the involvement of the Serious Fraud Office. I am sure that hon. and right hon. Members, if they are frank, will accept that there is a very limited amount that it would be sensible or appropriate for me as a Minister to say, given that there is an ongoing investigation. So, I am afraid that I will have to disappoint them that in relation to those companies there are very obvious restrictions on what it would be sensible to say. Much as I would love to help hon. Members opposite, they will understand those restrictions, I am sure.

Several hon. Members rose—

Jeremy Wright (Conservative, Kenilworth and Southam)

I will give way to the right hon. Member for Dwyfor Meirionnydd.

Elfyn Llwyd (Plaid Cymru, Dwyfor Meirionnydd)

It is interesting, because we know that the monitoring contracts are to be increased rapidly. In the Government’s own impact assessment, electronic monitoring was stated as having a neutral effect on reoffending. I put this to the Secretary of State and evidently he had not even read that paragraph, so he was going for something that was not proven to make any difference whatsoever. Once more, he was throwing money at these people.

Jeremy Wright (Conservative, Kenilworth and Southam)

Well, I do not entirely agree that these changes would make no difference. The right hon. Gentleman will recognise that what we are talking about in relation to new tagging contracts is also new technology. We are talking about GPS-based tags, rather than the previous radio frequency tags. He will recognise straight away that there is hugely greater potential to do more things with a GPS-based tag than with a radio frequency-based tag. That is why we think that there is huge potential for that technology. However, that is a separate question to what has previously happened in relation to other contracts, on which I am afraid I am going to say no more, but I will give the hon. Member for Darlington one more chance.

Jenny Chapman (Labour, Darlington)

I am grateful to the Minister for giving way. We respect his caution on this issue and have a huge amount of time on this side for this particular Minister. However, as an issue of principle, if an organisation is under criminal investigation, would not the Minister say that that would be an inappropriate organisation to contract with on this particular form of work?

Jeremy Wright (Conservative, Kenilworth and Southam)

I am hugely grateful for the hon. Lady’s kind words, though they are doing me no end of harm in terms of career prospects. On the point she made, I can tell her this: there is absolutely no doubt that Government Members and Ministers are keen to maintain the integrity of all contracts entered into by the Government. However, for the reasons I have set out, I cannot go any further than that on those two companies. I am afraid that I must maintain that view, however hard she tries. I apologise to her.

Paul Goggins (Labour, Wythenshawe and Sale East)

The Minister is being clear and helpful to the Committee, and I hope I can press him to be a little clearer on this matter without making any judgment about G4S and Serco and their conduct. On Second Reading, he said that

“if Serco and G4S do not come out satisfactorily from the audit processes, which this Government instituted, they will not receive any contracts.”—[Official Report, 11 November 2013; Vol. 570, c. 744.]

The simple question is: at what point will he judge whether they have come out satisfactorily from the audit processes?

Jeremy Wright (Conservative, Kenilworth and Southam)

I understand the right hon. Gentleman’s question and interest in this matter and he is perfectly right to probe me on it. He will recognise the difficulty I have, which is that if the audit processes we have set up were the only thing going on, what I said then would stand now. The difficulty is that there is not a clear demarcation, as I understand it, between the PwC audit and the SFO's processes. Because those two are now to some degree conflated, I have to be rather more reticent than I would otherwise have been.

Paul Goggins (Labour, Wythenshawe and Sale East)

The Minister is generous in giving way again. He made those comments on 11 November, which was after we all knew that the Serious Fraud Office had started a criminal investigation. He knew that then and that investigation is clearly ongoing. He was so clear on Second Reading that I ask him to say a little more.

Jeremy Wright (Conservative, Kenilworth and Southam)

Again, I can make this much clear: if we were talking only about the audit processes that PwC had begun, then what I said on not giving contracts to anyone who does not come satisfactorily through that process would stand. The complicating factor is that, for reasons I think the right hon. Gentleman supports—and fairly supported at the time—we have had to engage the SFO in this matter. As a result, there are complications, and those have to be worked through, which makes it difficult for me to be as precise as I would ideally like to be.

On what we are doing to ensure that those delivering services have skilled and trained staff to work with offenders—that is a legitimate concern of those who have spoken—a partnership of the Probation Chiefs Association, the Probation Association, the National Association of Probation Officers and Unison is working with the Ministry of Justice to establish an independent probation institute. I mention that again because it is important that we refocus on how to raise the esteem of those engaged in probation and rehabilitation. Such a body has been asked for over a long period, and it is part of our reforms. It had sadly been overlooked before.

The institute will support the development of the probation profession through a voluntary register of practitioners that captures the qualifications, skills and experience of the work force. It will support continuing professional development and promote events that contribute to skills, growth and knowledge in that area. For the new CRCs, there will be a contractual requirement to have and maintain a work force with appropriate levels of training and competence. Bidders for the CRCs will need to demonstrate in bids how they will deliver that, both in the shorter and longer term.

The issue of local partnerships has been raised both in this House and in the other place. CRCs will clearly need to work effectively with the NPS and with other partner organisations. Contracts will require CRCs to participate in statutory partnerships, such as community safety partnerships. Bidders will also need to evidence how they will engage with other local non-statutory partnerships, such as existing integrated offender management arrangements, very much like the one the hon. Member for Rotherham described in her constituency, and those delivered by the police, probation and other organisations. In answer to the right hon. Member for Wythenshawe and Sale East, the local PCC will be a key partner. We will want to ensure that a local PCC’s police and crime plan is made available to all those interested in pursuing a contract, so that they understand and can work with the objectives of that PCC.

The rest of the debate is in Hansard.