US report critical of private prisons

The Government says it hopes to have the new prison at Wiri, in South Auckland, running by the end of 2014. Photo / APN

The Government's intention for a new private prison in South Auckland follows new research showing that the benefits of privatising prisons are dubious.

Corrections Minister Judith Collins had said the new prison at Wiri would be a Public Private Partnership (PPP), but yesterday she said the tender process would start this year, with the prison running by the end of 2014.

It is the first PPP proposal under this Government, but will not be a test case for PPPs in the future.

Infrastructure Minister Bill English said it would only go ahead if it delivered better services for less than the public best-practice model, details of which he declined to release.

But new research shows that comparing prison costs is a fraught exercise because of the diversity of the prison population and the differences across prison facilities.

The April report - from the Florida Centre for Fiscal and Economic Policy called 'Are Florida's Private Prisons Keeping Their Promises?' - challenged claims that private prisons were 7 per cent cheaper to run and found no evidence that they were better at reducing recidivism rates.

"Florida's experience with privatised prisons raises serious questions about whether the taxpayers are getting their money's worth," the report says.

The Government predicts savings of 10 to 20 per cent over a contract period of 25 to 35 years, although it says that is yet to be tested. It costs $91,000 a year to house a prisoner.

Unions say savings in a private prison equate to lower staff-to-prisoner ratios and lower wages, but Ms Collins said it would depend on the contract details.

"Any contract will be subject to a lot of negotiation but we expect to drive a very hard bargain. We have to make this make sense in terms of taxpayer dollars."

The move is opposed by unions, Labour and the Greens, and supported by business groups.

The Auckland Central Remand Prison was under private management from 2000 to 2005, when it cost $7000 more a year to house a prisoner compared to public prisons.

One Corrections Association NZ member, who did not want to be named, has said his pay jumped from $32,000 to $45,000 when the prison moved back to public hands.

Green Party Corrections spokesman David Clendon warned that corruption had plagued private prisons overseas.

"In the United States last year, judges in Pennsylvania have been charged with taking millions of dollars in bribes to send teenagers to privately-run youth detention centres."

The new prison will have 1000 beds and house prisoners of varying security risk levels. Failure to meet contract obligations would bring financial penalties.

The Corrections chief executive will still be responsible for the prisoners, and Corrections monitors at the prison will report to the department.

The Government is also looking to place the new Mt Eden prison under private management.

WHAT NOW

Wiri Prison timeline:
Now: Public consultation on resource consents.
Later this year: Expressions of interest.
Middle 2011: Requests for proposal.
2012: Construction.
2014: Operating 1000 beds for male prisoners of all security level risks, with 270 more beds needed by 2019.