In July 2014, the Ministry of Justice created 21 Community Rehabilitation Companies (CRCs) to manage low and medium risk offenders on probation in England and Wales. Eight months later, the managing of CRCs was contracted out to eight companies.
By contracting out the Companies, the Government intended to incentivise innovation and open the market. However, in 2017 the Ministry made amendments to the contracts to run CRCs. This was owing to "unforeseen challenges".
The National Audit Office investigated the changes to the contracts. It found that the volume of CRCs’ work was below the expected level, meaning the contracts until 2022 were worth £2.1 billion to the contractors rather than £3.7 billion. With less income, the contractors were less able to deliver the required services and so the Ministry of Justice paid additional sums sustained good service.
The Ministry of Justice now expects to spend approximately £2.5 billion on the contracts. Although well below the 2016 projection of £3.7 billion, it covers a lower volume of work.
The Public Accounts Committee will ask officials from the Ministry of Justice and HM Prison and Probations Service about the management of CRC contracts, why they made the changes they did, and how they can ensure value-for-money in the future.