- Michael Stutchbury, Economics editor
- From: The Australian
- May 21, 2011 12:00AM
SERCO has been singed by the loss of control in the immigration detention centres it manages for the Australian government.
This is a pity because the London-based international outsourcing company is leading a revolution in the delivery of public services in which we risk falling behind.
This is not just about governments struggling with budget red ink. It extends to innovative new public-private approaches to crime, welfare-to-work, preventative health, chronic disease management and foster care that cut across political divides.
Immigration Minister Chris Bowen has called an inquiry into the riots at the Christmas Island and Villawood immigration detention centres in March. But a detailed report on Serco’s management of Western Australia’s only privately run jail was released this week by the state’s independent Inspector of Custodial Services, Neil Morgan.
Morgan’s report starkly contrasts with the Serco media image painted by refugee activists and trade unions as a secretive multinational corporation that gouges taxpayers, under-staffs its detention centres and covers up incidents such as detainee riots.
Instead, it concludes Serco’s medium-security Acacia prison outside Perth “is without doubt one of the best performing in Western Australia, if not the best”.
And it yields cost savings to the state of up to 30 per cent. Compared with $270 a day in government jails, each Acacia prisoner costs $182, including an 8 per cent profit margin for Serco. Yet Serco’s “pro-social culture” treats prisoners “with respect and decency”. Its prison officers have “strongly positive views of senior management”. And the jail has an “unblemished record” for basic prison performance indicators, with “no escapes, no loss of control and no other major incidents”. Self-harm is low.
While some areas need improvement, Acacia’s health services are the best of any WA prison. It “excels” in reintegrating released prisoners into the community. Its treatment of indigenous prisoners is a potential model for public prisons.
“For a premium product you get a 30 per cent discount,” Serco’s Asia-Pacific boss David Campbell tells Focus.
And the Morgan report concludes Acacia “is arguably the most closely monitored and highly accountable prison in Australia”.
“Expectations of the state’s public sector prisons are less detailed, less transparent, less clear and less robustly monitored than those of Acacia,” it says.
But the report also finds the WA Department of Correctional Services has been reluctant to transfer proven innovations at Acacia into the public prison system.
It even has stifled Serco’s proposals to introduce “high quality” programs that are radically extending the outsourcing revolution into new areas in Britain , both under the “big society” of new Conservative Prime Minister David Cameron and the previous Labour government.
Under a new British pilot program, Serco will be paid more for managing the Doncaster prison if it can cut the reoffending rate of released inmates. In New Zealand, Serco is about to take over Auckland’s Mt Eden jail under a contract that also links its payment to reductions in reconviction rates for released prisoners.
Government-run prisons traditionally focus little on recidivism. Reoffending is not included in the state-based prison performance indicators monitored by the Productivity Commission under the Council of Australian Governments. “There is almost no mechanism in place to measure what happens to someone when they walk outside,” says Campbell.
Yet the cost of keeping Australia’s 28,500 full-time prisoners is clashing with “lock ’em up” law and order politics.
Taxpayers forked out $3.3 billion to run the state-based prisons and community corrections systems in 2009-10.
In NSW, new Liberal Attorney-General Greg Smith claims “every prisoner who returns to jail wastes taxpayers’ money“, vows to reduce the state’s reoffending rate to below the national average in a decade and rejects the idea that “success on law and order issues can alone be judged by how many people are locked up”.
In Tasmania, Greens leader and Corrections Minister Nick McKim stood down 40 prison guards at Hobart’s Risdon jail in February after repeated wildcat strikes, replacing them with police. McKim told the union the prison was run by prison management, not guards. The union likened McKim to John Howard and Peter Reith on the waterfront.
The political Left and the public sector unions typically resist ending government monopolies. But the “progressive” approach of privately run jails may startle tough-on-crime conservatives.
The head of Serco’s London-based think-tank arm, Gary Sturgess, suggests that private prisons have been the “great success story” of contracting out. That’s partly because government jails have been so bad.
“In the English-speaking world, the public sector has not done a terrifically good job at managing prisons,” says Sturgess, who was cabinet secretary for the NSW Liberal Greiner government two decades ago. “They are not areas of best practice in public service delivery.”
But it’s also because the contained prison environment can be tightly managed by private contractors and closely monitored by governments and inspectors. The risks and costs of prisoners reoffending traditionally are borne by government. The issue is whether private providers can use financial incentives to take on some of this risk and cut through the contested social and criminological theories about what works best to reduce recidivism.
Sturgess urges trial, error and learning and to use incentive payments linked to “output” targets such as lower drug use, stable relationships and lower personal debts. The issue now is whether such incentives can be directly tied to the ultimate desired “outcome” target of keeping ex-prisoners out of jail.
After visiting Acacia in March, this writer is not surprised by the Morgan report on Serco’s “responsible prisoner” and “dynamic security” model.
Even amid murderers, it feels more like a vocational college than a traditional hard-as-nails jail. There’s a football oval, tennis courts and gymnasium. Nearly half the prison guards at the all-male jail are female. Guards and prisoners are required to mingle and call each other by their first name, an approach that Sturgess suggests has been resisted elsewhere by traditional guard unions.
“They are less likely to strike a female who they know personally or a male who relates to them on a one-to-one basis than if there has been a push and shove approach,” Campbell says of prisoners.
“There are concerns that this is liberal, this is soft. But it is consistent with our values. It’s a far better result that people don’t reoffend because jails are very expensive.”
The impression at Acacia is that prisoners are less difficult to manage if they are well treated and have a sense they are being helped for a better post-release life. “Treating prisoners more decently ends up being lower cost,” agrees Sturgess.
The Morgan report hails Serco’s case management model run by one-on-one managers, psychologists, teachers, TAFE instructors, chaplains and non-profit agencies such as the Salvation Army and Relationships Australia.
This aims to ensure prisoners leave jail with drivers licences, birth certificates, Medicare cards, help with paying outstanding fines, accommodation, vocational training and sometimes prearranged jobs.
Inspector of Custodial Services Morgan suggests a multinational corporation such as Serco is naturally suited to meeting the incentive-based performance indicators through innovation.
“The key motivator is not simply the financial reward of the innovation bonus but rather to drive for efficiency and improved outcomes,” Morgan says.
Until the immigration detention centre blow-ups, Serco’s Australian expansion had attracted little attention.
It provides ticketing and information for Perth’s public trains, buses and ferries; has a $500 million harbour and offshore services contract with the navy; manages Australian Defence Force medical and pharmaceutical supplies; maintains Melbourne’s public parks and gardens; provides BlueScope Steel’s fire and security services; and owns and operates the Ghan, Indian Pacific and Overland rail services.
Since the Howard government introduced the Job Network to outsource employment services in the mid-1990s, the outsourcing push has tailed off when it could be delivering gains in transport, welfare-to-work and health.
The lesson from Acacia is that government contracts for such private provision need to be publicly available and closely monitored by independent scrutiny.
Political sensitivity seems to explain why this is not the case for Serco’s detention centre contract, where Labor is being drowned by the surge in boatpeople arrivals. But transparency is seen as one of the key drivers for improved privately delivered performance.
Original article here