Committee of Public Accounts

Press Notice No. 41 of Session 2002-03, dated 18 September 2003


Mr Edward Leigh MP, Chairman of the Committee of Public Accounts, today said that the Prison Service's progress on modernising its procurement of goods and services was "pretty dissatisfactory" and that the Service needed to properly incentivise prison managers to make improvements.

Mr Leigh was speaking as the Committee published its 41st Report of this Session, which examined the progress made in modernising procurement of goods and services required for the day to day running of prisons. In 2001-02, the Prison Service's 128 directly managed prisons in England and Wales spent £461 million on supplies essential to their daily running, including prisoners' food and clothing, and services ranging from maintenance and waste removal to the delivery of education and drug programmes. Prison Service headquarters spent a further £491 million on central projects and services, such as construction and information technology.

The Committee found that the procurement of goods and services within the Prison Service is fragmented and costly to administer. Some 2600 staff, equivalent to 1,170 full-time posts, are involved in procurement at an overall cost of over £23 million. This number equates to 10 full time staff engaged on procurement activity within each prison. Stock holdings at March 2002 were some £47.6 million.

By reducing stock levels to three month's supplies, the Prison Service would free up resources of around £12 million, but scope exists to reduce stock levels even further. The Prison Service should rationalise purchasing activity, for example by making greater use of central stores, and by combining procurement activity and stores where prisons are clustered within reasonable distances of each other.

The Prison Service's ability to achieve significant efficiency gains is hindered by the absence of adequate information technology systems. Such systems would provide headquarters' staff and Prison Governors with better management information on, for example, stock levels, stock turnover rates and prices across the Prison estate. The Prison Service estimates that some £9 million could be saved but does not expect to have suitable systems in place before 2005.

The Prison Service should draw on the procurement practices of public and private sector operations facing similar challenges, for example hospitals, hotels and private prisons to improve its own practices. Some private prison operators, for example, hold main stores off-site, giving greater flexibility on delivery times and reducing security risks, and make greater use of centralised ordering.

Mr Leigh said today:

"The Prison Service is working to modernise its procurement of goods and services on which it spends almost a billion pounds a year. I find it pretty dissatisfactory that progress has been patchy, with procurement still fragmented and costly to deliver. The Service must find a way to properly incentivise prison managers to make these improvements, and release resources for core activities."

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