Private firms to tender for jails again

Private companies will again compete with the Corrections Department to run new prisons, including a 900-to-1200-bed jail due to open by 2012.

Corrections Minister Judith Collins has told officials to draw up law changes that would allow private companies to tender for jail management contracts, with legislation expected later this year.

The move, promised in National's law and order policy, is set to reignite debate on the private sector's role in public services. It comes as Mrs Collins signals that heads could roll in Corrections after a spate of escapes this year.

The previous National government allowed private companies to tender for jail contracts, and let the management of the new Auckland Central Remand Prison, opened in 2000, to an Australian firm.

Labour canned the contract in 2005 when it passed a law that removed the ability of private companies to run jails.

National argues that private companies commonly used to run prisons overseas provide better management and programmes and do the job more cheaply than government agencies.

It cost $42,000 per inmate to run the Auckland remand centre when it was headed by Australian Correctional Management, compared to an average of $52,000 in a Corrections Department facility. The Auckland jail contract included a $50,000 fine for each escape.

Labour argues that prisons are a core public service and should not be run for profit. A spokesman said the party would oppose any move to open prison management to competition.

"Labour believes that it is the role of the public sector to deprive people of their liberty and not the role of the private sector. Prisons are a core public service along with defence and police."

But Mrs Collins said Corrections was expected to have a new law allowing competition drafted within months and she would visit private jails in Australia to see how the system worked there.

"At this stage, my views are that we would build the prisons, that they would be owned by the state and that the management contract is what we would be wanting to tender."

Mrs Collins wanted the new law through in time to allow private companies to tender for the management of the next prison due for construction. It will house up to 1200 inmates and is scheduled to open by the end of 2012.

"We would obviously want to have the contract in place prior to that, because we want to have the input from the management team."

Mrs Collins rejected suggestions private companies might be put off tendering to manage the prison because a future Labour government could overturn the contract.

She said Maori Party co-leader Pita Sharples, who is Associate Corrections Minister, supported allowing private contracts.

But a spokesman for Dr Sharples said the Maori Party had no formal policy on the private management of prisons.