Private funding could be used to develop a further four prisons in the Government’s project to provide 10,000 new places for inmates, a justice minister has said.
Rory Stewart told MPs a range of funding arrangements is being explored, including private finance, but no decision has been taken.
His remarks came after he previously confirmed the funding plan for two of the six prisons to be developed under the project, costed at £1.3 billion last year.
Shadow justice secretary Richard Burgon asked what the extra costs would be to the Ministry of Justice by using private finance initiative (PFI) to build new prisons and questioned if the maintenance work would be outsourced.
Asking an urgent question in the Commons, the Labour MP also said: “Will the minister allow any of the companies under a serious fraud investigation for overcharging the Ministry of Justice – that’s Serco and G4S – to bid to run the new prisons?”
Mr Stewart replied: “The first prison – Wellingborough – the construction will be funded by public capital.
“The second prison, which is Glen Parva, will be funded through private finance initiative.
“We’re exploring a range of other funding arrangements, including private finance, for the remaining four prisons but we’re yet to achieve a resolution on that.
“On the question of who we would like to bid, of course we will be looking for legal liable bidders.
“But I’d like to emphasise the key here is about getting quality and diversity into the estate.
“We don’t want, we believe, to be overly ideological about this – we believe in a mixed estate.”
Mr Stewart said there are currently some “excellent” public sector prisons, while also praising Serco’s work at HMP Thameside in London and G4S at HMP Altcourse, near Liverpool.
Tory former justice secretary Ken Clarke said the question of whether a prison is financed and operated privately or publicly was an “ideological irrelevance”, as he urged Mr Stewart to “get rid of the older, slum, overcrowded prisons” so new prisons can provide the “quality of security and rehabilitation that the public deserve”.
Mr Stewart said: “We have to be absolutely clear that people who ought to be in prison must be in prison and properly housed in prison and we must work to turn their lives around.”
MPs also raised concerns about the potential risks posed by some outsourcing companies.
Labour former minister Diana Johnson asked for reassurance that “if Capita come forward bidding for any of these contracts and score a risk of 10 out of 10, that they won’t be awarded the contract?”.
Mr Stewart said her general point was “difficult to disagree with”, adding: “From the Ministry of Justice, when assessing bids, we will very much be taking into account the financial viability of the company bidding.”