Our plans for competing custodial services are set out in the “Competition Strategy for Offender Services”, published in July 2011. That involves the competing of eight prisons, seven of which are currently in the public sector. We are considering bids from seven providers, including the public sector Prison Service, which has partnered with Mitie and with the Shaw Trust and Working Links in the third sector. That means that even if the public sector-led bid wins all the contracts, the use of private company management will have been extended as a result of this round of competition. We will announce the services selected for phase 3 of the prisons competition in November this year.
I congratulate Ministers on introducing private sector disciplines into the Prison Service faster than any of their predecessors. Payment by results will mean that contractors will be rewarded if they cut reoffending rates when prisoners leave jail, and penalised if they do not do so. When does the Minister expect the first benefits of that policy to be seen?
My hon. Friend has finely summed up the positive benefits of our policy. The first benefits are already being seen in the payment-by-results programmes in the Peterborough and Doncaster prisons. We should remember that the Doncaster prison proposal came forward from Serco, which is rebidding to manage a prison that it already runs. It is proposing to put part of its contract price at risk against its performance in driving down the reoffending rate.
We have said that we do not intend to compete in the high-security estate. There is a limit on how fast the private sector could absorb new prisons and on the capacity of the Ministry of Justice to compete prisons. There is no stated policy, but there are practical restrictions on the speed with which we can increase private sector provision.