Welcome to this afternoon’s session of the Justice Committee, which is looking at the work of the Ministry of Justice with the aid of its senior management team. I will ask them to introduce themselves, but just before that could members of the Committee who are attending give their declarations of interest?

I am Tessa Munt, the Member for Wells and Mendip Hills. I have made my declaration, which can be found on the website.

My name is Linsey Farnsworth. I am the Member of Parliament for Amber Valley. My interests are on the website, but of particular relevance today: I am a non-practising solicitor, formerly of the Crown Prosecution Service, and I am the mission delivery champion for the Safer Streets Mission.

I am Andy Slaughter, the Chair of the Committee. I am a non-practising barrister. I am a patron of two justice-related charities: the Upper Room for ex-offenders and the Hammersmith and Fulham Law Centre. I am a member of the Unite and GMB trade unions. Starting with the permanent secretary, would you introduce yourselves?

I am Antonia Romeo, permanent secretary.

I am James McEwen, chief operating officer.

I am Nick Goodwin, chief executive of His Majesty’s Courts and Tribunals Service.

I am Amy Rees, the CEO of HMPPS.

I am Ross Gribbin, director general of policy for prisons, offenders and analysis.

Thank you very much. We have just been joined by Sarah Russell, who gave her apologies for lateness. I am sorry that I did not remember those. Welcome, Sarah. Do you want to do your declaration of interest?

I am Sarah Russell. My declarations of interest are as on the register. I am a solicitor, although I am not currently practising. I am a member of the Community trade union and of USDAW, and various APPGs—pretty much the usual.

Welcome, all of you. I will leave it to you to decide between yourselves who answers the questions that we put, unless a member of the Committee specifically wants an answer from an individual. We will start with a few questions about your budget and accounts. It is widely reported that Departments are expected to make 5% efficiency cuts as part of the forthcoming spending review. What areas have you identified so far where you are looking for that?

Would it be helpful, Chair, if I said something very briefly about the budget overall?

Yes.

Thank you. MOJ delivers a large range of quite complex and highly specialised services. The majority of our budget is spent on the pay bill for people, costs and capital costs—that is prison build and so on. We are highly exposed to inflation therefore, for reasons we might go into discussing. Over recent years we have had a huge amount of pressure on our budget. We identified a number of areas as part of the Treasury’s efficiency and savings review of 2022, as well as more recently in SR phase 1, where we identified areas where we had to make efficiencies, both through reducing expenditure and sometimes in services and through becoming more efficient. We have gone through the process of what is called the zero-based review, which is the first part of the SR phase 2. This is aimed at ranking or prioritising spend for ongoing discussion with the Treasury and also identifying, as is public, 5% of potential efficiency savings, as you just referred to, Chair. That is still an ongoing discussion with the Treasury. We have identified areas with our Ministers where we think we might make savings. There are a number of things. The vast majority of our spend is either on people or construction or estates. It is ICT; it is on service delivery. We have some areas of what could be termed discretionary spend. Those tend to be in the areas of delivering policy—for example, victims’ funding, community accommodation services and reducing reoffending budgets. Obviously, what we are trying to do is preserve those budgets as much as possible, as well as the budgets for delivery of services, through finding money elsewhere. It is going to be a challenge.

Yes. You didn’t say—you were entitled to say—what the profile of the Department’s spend has been over the last 15 years. It is generally perceived that Justice as a spending Department has received the biggest cuts—a third from the resource budget, which is 85% of your spend, between 2007 and 2017. You are still significantly below the spending there would have been in 2007, which is 24% lower in per person terms. You are almost a case study of what very substantial cuts in public spending are. You are now being asked to make a further 5%, or at least illustrative cuts of that. Can you give us some idea of the impact that has on the Department and how you are coping with it?

As you have already said, particularly in SR15, we had a real-terms cut every year in the budget, although in practice we ended up with spend over that period increasing because at the time the Department was having to go back to the Treasury for more money. In SR21 we had a significant uplift, aligned with what we were expecting to be the demand coming into the system. That was from the recruitment of additional police officers, and from the impact of getting the Crown court backlogs down post covid. We were expecting a big inflow into the prison system. Therefore, we got some more money to deal with that. In fact, largely because of much higher inflation than anticipated, our budget still came under huge pressure. Chair, you are right to say that our budget is under a lot of pressure. We also continue to face significant increases from additional demand. It is not just a question for us of holding still. There is the flow in that we are expecting, because, as we know, the prison population is projected to continue to rise. We also want to find money to do things like continuing to bring down the Crown court backlog. I am essentially agreeing with you. We are under a lot of pressure. We are working closely with the Treasury. The fiscal context says that we are going to have to find efficiency savings and other savings. We will seek to protect services as much as possible.

Obviously, some of your budget is outwith your control, at least in the short term. Perhaps policy changes might alter that. You will want to look at areas where you can save money, as well as areas where you need to spend money. You want to take the reins, as it were. You do not want constantly to be going back, cap in hand, to the Treasury because you have had overspends. Give us one or two concrete examples: where do you expect to take money from, and where do you expect it to go?

The first thing to say, as you have just identified, is that the Government’s policy is to try to get a grip on stabilising the system and then make it more sustainable. To that end we have two independent reviews under way. One is on sentencing, which is specifically looking at how we can reduce demand across the justice system while considering factors that have the capacity to help us do that. The other is the reform of the criminal courts, which is looking at how the criminal courts can operate more efficiently and at potential policy changes to reform the courts, to ensure that cases are dealt with proportionately in the light of the current pressure on the criminal courts. That is the strategic plan. In the immediate term, as I say, we are trying to protect the frontline. The Treasury will rightly expect us to go through our spend line by line to identify areas of efficiency, as we are doing and have done. That is still subject to internal negotiation with the Treasury, so I don’t think I can be too specific about areas. The one thing I would say is that we have made a big investment, over the recent year in particular and slightly longer than that, in our digital and technology capability. We have a lot of legacy tech debt; I am sure we will come on to that as well. We are looking to put that on a solid footing, as well as looking at how AI, digitising and automation can save money over the period of the review. Nobody likes talking about invest to save any more because there is not much money available for investments. Where we can identify areas where some additional investment in tech, digitisation and automation could yield savings, productivity improvements and efficiency down the line—

We will come to that later when we talk about the reform programme. Given what you said about priorities, why is it that the most significant increase in the last year has been in “Policy, Corporate Services and Associated Offices” of your various budgets? That has gone up by £336 million, or 36%, from estimates.

Could I ask what page of the report you are on, or are you on another note?

Yes.

I don’t think that is talking about money. You are talking about some numbers.

Yes, I am talking about what is under the heading “Policy, Corporate Services and Associated Offices”. Comparing the supplementary estimate with last year’s expenditure shows that that had gone up more than any other area.

I will ask James to come to the specifics of the supps. You might be referring to numbers. What we put in that policy was, presumably, some of the provisions.

If you look at the change between the mains and the supps, as you know, the Treasury had agreed with us at the beginning of the year certain changes in budget that would arrive at the supps. This is a zero-sum game. At the mains we have to reduce the budget for our HQ, knowing that by the time of the supps, when the Treasury puts forward the supplementary estimate, there would be additional funding within it. The journey from the mains to the supps is about where we hold, in the departmental budget, the difference between what Treasury had provided at the mains and then what came forward at the supps.

But do we know what is in this particular line?

That would be the costs of the classic HQ functions, but also some of the FM spend and other property spend that sits in my group, for example. It is a variety. There is some ALB spend and grants for victims. There is a lot of frontline in that, as well as civil servants.

On that point, can I ask you to deconstruct your acronyms? I am not fully familiar. I know what FM means.

FM is facilities management. The way that we organise the Department in my group, a lot of the professional services that support Amy and Nick, and other frontline operations, sit in the headquarters because that is how we drive efficiency.

I understand that. I also understand facilities management. There are some other bits—

Yes, I was talking about our headquarters and the supps, being the supplementary estimate. I think those were the acronyms I used, from memory.

It is looking at headings. When you look at HMPPS or HMCTS, or legal aid, you would expect to see, if there are to be increases, that they would take the lion’s share of it, but the lion’s share seems to have gone into what is effectively head office costs.

I think the point James was making is that supplementary estimates are essentially adjustments in-year. It is not the same as an increase year on year. It is just what happens in-year when we have pre-agreed some adjustments with the Treasury during the first part of the year. For example, as I am sure we will also come on to, we have done switches in the past between CDEL and RDEL and things like that, and supps. It is just an adjustment mechanism, if that makes sense.

Do you get supps every year?

Yes; it is part of the fiscal process. The supplementary estimate is a core part of the fiscal process. There are the main estimates and then the supplementary estimates.

For a bystander, when you say it is an in-year adjustment, does it mean that arguably, for instance, a budget is set that you are to try to live within, and that budget may or may not be feasible? Then, when it is not, supps are how that gets dealt with. Does that happen across all Departments?

James is the person actually doing this with the Treasury, so he will want to give a lot more detail than me. Essentially, what happens is that you do an adjustment on your RDEL and your CDEL, and it could go either way. Sometimes there is an emerging—

You will have to spell it out.

Could you tell me what an RDEL and a CDEL are?

Sorry: resource DEL and capital DEL. Essentially, there are various types of public money, but the main distinction is between resource spending and capital spending.

What does DEL mean?

Departmental expenditure limits.

I am very sorry, but I don’t understand what you are saying. If anybody is watching this, they might not understand either. I don’t know whether people spend their afternoons watching the Justice Committee, but frankly I hope they do.

Completely understood. Resource DEL or expenditure can be seen as running the organisation in capital; it is investment in the assets.

I understand that; I couldn’t understand the acronym. I am completely cool with what you have now explained. Thank you.

To continue, it can go up and down. In some cases, we might be offering money back. For example, if we know we are not going to be able to spend our full limit that year on the capital side, we might offer some capital back. The sorts of things that can come into the supplementary estimates would be unforeseen pressures—if, for example, there was loss of income that was unexpected. In the case of the year in question that we are considering, it was unforeseen that we recouped less income than we were expecting because income did not keep pace with the trajectory post covid. Therefore, that is the sort of thing that we go back to the Treasury for. I can say a bit more if helpful, or that might be enough.

That’s very helpful. I have two questions. First, do you think you can find 5% of efficiency savings, or actually are these just cuts? Secondly, you were quite reluctant to suggest where those cuts might come from, if they were to be so termed. Let’s say you had a 10% increase in your funding. What could you do with that?

That would be a heady moment. To be clear, with no disrespect to the Committee, we are in an interim process where we are still talking to the Lord Chancellor. The Lord Chancellor has not made any decisions, nor has it been decided by the Treasury. It would not be appropriate for me to talk about what we think the 5% might apply to. The efficiency savings, in the case of our budget, will presumably involve some reduction in services as well as pure efficiency. In the years 2023-24 and 2024-25 we took £1.6 billion out of our budget, including £100 million of pure efficiency savings, mainly through four efficiency programmes—some of which we will come on to talk about—of £100 million this year. Over a long period, we have been absorbing inflation, which has been incredibly high. We have been taking large sums out, so I don’t think there is a lot of additional money there to be found. If I were given a 10% increase, the first thing to say is that, given the demands we face coming into the system, some of that would just be put towards standing still. The two things I most want to do are to get the Crown court backlog down, so that would be increasing sitting days, and all the other things to implement the reforms that we expect that the independent criminal court review will come up with. There is also implementing the sentencing review, continuing to build the prisons we need, and investing in staffing and things for those new prisons. You would expect me to say this, but it would slightly depend on whether it was 10% real or cash. A flat real settlement over a multi-year period is not that significantly different from flat cash plus 10%.

You are not the only Department that does this: you mentioned, a few moments ago, using capital money to support revenue budgets. Can you summarise where you are with that? What sums are involved? Which budgets is it going from and to, and why do you feel the need to do that?

It is normal policy if you are looking to have an overspend in some areas. For example, unexpected loss of income means you need more money or more resource DEL because you are absorbing wage increases or something. It is normal for the Treasury to expect Departments to look first to their own budget to reapportion before thinking about giving additional money. Exceptionally—it is unusual—in the year in question we agreed with the Treasury that we could do a switch. We had capital that was not being spent, for a range of reasons, on the prison build programme. There were delays in planning permission, site issues, ecological requirements, and all the things that had led to the delays in that programme. We could not spend all the capital on prison build that we wanted to in that year and we had a shortage of resource, so we did a switch, which I think in total was about £700 million over the two years. We are not relying on it for this year because it was unusual for the Treasury to allow us to do it, although I think they let us do it for two years in a row.

There was also the sum of £85 million capital that you returned to the Treasury due to supplier failure impact on prison expansion and maintenance.

As you know, ISG went into administration. They were doing a large number of works for us. When they went into administration, we could not spend all the money that we would have spent on them if they had not been in administration. The absolutely crucial thing is that, at the time you identify that you might have an underspend, you offer it up to the Treasury. Hence, as I say, you are sometimes offering it up during the supps. The thing that is the least helpful is to pop up at the end of the year and say, “Oh, by the way, we’ve been holding on to this. We thought we would have an emerging underspend.”

Is that just due to the ISG failure?

It is primarily due to that. Amy, do you want to say something about prisons?

The ISG exposure was quite significant for us. There were a couple of projects in HMCTS, but we had both the 20 k and maintenance projects, and they were delivering FSI—fire improvement work. It was a really significant exposure for us in terms of what could not then be delivered and what we are now going to have to go back in and recontract for with the rest of our supplier base to continue the works.

So it is not to do with your existing maintenance contracts—they are with Amey, I think.

No, not really. There are two levels at which we do maintenance. The existing permanent contracts are for small maintenance and small works. Anything significant goes out to contract. All the stuff we are talking about is priority 1 maintenance. Replacing a boiler, replacing a roof, building a new wing and doing fire work projects all go out to specialist contractors.

You talked about the £700 million that has effectively gone out of the prison building programme, which is unfortunate.

Over two years.

That is unfortunate to say the least, given the need for prison places and the fact that it is being used to fill a gap in your only funding. What can you say about the future? What can you say about next year and the year after on that? Presumably, you have revised targets for completion of the prison programme?

Yes. With the prison programme, we are currently building 14,000 new places. They are due to come onstream by 2031. Amy may want to say in a moment that the administration of ISG has been highly damaging to the programme. What we are attempting to do is to keep the show on the road and deliver those 14,000 places. It is absolutely essential that we have them coming onstream. We would never plan, hope for or seek slippage. We always want to spend as much money as we can in a value-for-money way, delivering the prison build programme. It is just that I observe there may yet be areas, because we have to get those places and that maintenance done by someone else now. We have not reallocated it in all areas.

No, that is exactly right. The other thing that all of you will be very familiar with are the planning delays we have had to Gartree and Grendon, and what that has done to—

Yes, we have some questions coming up on the prison programme, so I will save those for then. Thank you.

I wondered what the costs of re-tendering the ISG work were.

I will pick up for HMPPS. Nick and James might then want to pick up, because it was not just HMPPS that had contracts in the MOJ with ISG. First of all, there are the contractor overheads. Just the overhead of our back office staff having to re-let the contracts will be one set of costs. We do not yet fully know how much it will cost for us to get new contractors in and whether they will stick to the same price or be more expensive. It is likely, once we have re-let all the contracts, that it will cost us considerably more, given that there has been inflation in that period and given that, in some sites, they were part way through work. I doubt that a new contractor will pick up that work halfway through. They will want to go back and assure themselves that the work has been done to their specification, since they have to sign it off. It is highly likely that there will be costs involved and we don’t know what all of those are yet.

When do you anticipate having some idea of the costs of the loss?

Probably in the next three to six months. We will have an idea every time we re-let one of the contracts, but there are quite a few to do.

I might ask you to write to the Committee with some information about that as it comes along. Thank you.

You have these contracts across different areas of departmental operation. Did you not have any clue or forewarning about what was going to happen with ISG? Since Carillion, it is the biggest failure of a contractor, isn’t it?

I will pick up on that, and then James will want to say something as well. Of course, it was not just the MOJ that had exposure.

But even more so.

The work with ISG was largely being led out of the Cabinet Office, but obviously we were working with them to look at what the impact would be and prepare, in so far as it was possible to prepare. Of course, when you are in the middle of a contract you are not seeking, during that contract, to go out and do a potential re-tender. You are doing everything you can to ensure that the contract does not fail. We were working closely with the Cabinet Office to do that sort of preparation.

Generally, we keep a close eye on our key contractors and their financial health. We are not public about the suppliers we are worried about because that is likely to precipitate more challenges for them. As a Government, we had been working with ISG for a while, understanding their position. As Antonia said, that afforded us the opportunity to do the contingency planning that we were able to do in the event of their falling into administration, which ultimately is what happened. We were well prepared for what came next, but the procurement process has to unfold, so we cannot comment today on what the cost of the new re-let contracts will be. There are a number of methods that we have for keeping an eye on the financial position of our key suppliers.

Can you remind me when the contract was let?

With ISG?

Yes.

We have been working with ISG for a number of years.

If we focus particularly on the work that they were undertaking for the two prisons that are being rebuilt—I recognise that there are other things, such as maintenance work—when was the last letting of that contract? When were they last scrutinised as financially fit and permitted by the Government to go ahead? What date was that?

On existing programmes, we were carefully managing our cash flows to make sure that we were paying for only work that was due, so that we were not exposed in the event of their administration. I would need to look at when we last let a contract with them. We have a framework agreement. They do some very large projects and some very small projects. The Government work was a significant proportion of their revenue streams. In these situations, you can cause the ultimate collapse of a company if the Government decide to stop issuing contracts with them. There is always a careful balance about at what point you stop, but we were being very cautious.

Bearing in mind it is taxpayers’ money, it should have been stopped before it all—

Indeed, we look very carefully at placing new contracts with any company in financial distress. Companies in financial distress can recover, so what you do not want to be doing, as a Government, is pushing them over at the same time. I am just saying that there is a judgment, outwith the ISG example, to be made about how the Government respond when there are concerns.

I would ask you to inform the Committee in writing, if you would. I would like to know that information about when the Government last decided that they were financially fit to take on work with the MOJ and others. I am particularly interested in the MOJ, and to have some understanding of when it was that the flags went up for the first time. It sounds as though it may be the same sort of time, which is not necessarily totally sound decision making about how taxpayers’ money is spent.

Obviously, we are happy to write on that. In a situation like this, we would move absolutely in lockstep with the Cabinet Office and with Government policy. We would not be making our own judgments about it. We have our own basis on which we decide whether to let a contract, but on things like fitness for the contract to be let and proximity to administration we would work very closely with Cabinet Office because they own it across Government.

Yes. We can do staffing afterwards.

As long as we do it next, due to my commitments.

I will say some things, and, because you are particularly interested in prisons, Amy will want to add to it. First, to sight it overall, we have an incredibly complex portfolio of commercial projects. Many are in prisons, but we have many in courts and, more broadly, in our other agencies and elsewhere in MOJ. They range from contracts held by individual prison governors for particular services to contracts held centrally across the portfolio. About £5 billion of our spend is in contracts. To go back to the Chair’s opening question or two, that says quite a lot about how much money one has to draw money out of, or seek efficiency savings from, because we have £5 billion tied up in contracts. We work with a large range of contractors, from SMEs to very large organisations, in the sort of things we contract on. We have property construction services, which would be people like Kier, Wates and Laing O’Rourke. You did not ask about private prisons, but, as you know, we contract with those. We also have IT digital services—Microsoft, Vodafone, Amazon Web Services, BT. We have the aforementioned facilities management, so Amey, OCS and Equans. We have resourcing contracts to help us with resourcing through Alexander Mann, Brook Street or Hays, and we have prison services: Serco, Bidfood, DHL and Hovis. That is a neat segue for Amy to say something about prisons.

The boss has covered it. There is everything from the actual delivery of things. Healthcare is often contracted, but not commissioned by us; it is commissioned by NHS England and devolved in Wales. Then you have things like education contracts, done in lots or nationally, right down to things like how we buy Snickers, bed sheets, clothes or uniforms for staff. There are some things that are done locally, such as commissioned rehabilitative services, or things that you might buy in, like very specialist advice, which is often quite local—some from very small organisations. There is peer support and that kind of thing.

I am going to ask Amy to say something about prisons and Nick will want to say something about courts, but what do you mean by not being “subject to full public scrutiny”?

You have hit the nail on the head because a lot of this will be subject to commercial confidentiality, but why don’t I ask James to say something about that first and then we can talk about prisons and courts in particular, if that is helpful?

The contracts themselves are published, so you have that degree of scrutiny. To your point on performance, some of that is commercially sensitive. As to what we do internally, each major contract will have a senior business owner who is responsible for working with that supplier, which might be at a national level and at local levels, carefully monitoring the performance of the contract and the supplier and, where it is falling short, making sure that remediation plans are put in place, and that if penalties are applicable under the contract they are being enforced. For the procurement commercial function, in my team, we have a small team of experts who help the people working in the business, making sure that they fully understand the way the contracts work and the mechanisms we have. That is the overall approach. On the list of things that Amy and Nick will talk to, we work closely with many of our third-party suppliers. Many of them have stepped up through what has been a very difficult period in terms of capacity. I am sure we will talk about the escort contract, but the contractor there has delivered hundreds of thousands of journeys for us, a small proportion of which may lead to people not being in the dock at the right time. We understand completely the frustration for other court users—the judiciary and others, including victims. On facilities management, we have the third-party suppliers that Amy has talked about and others. We have an in-house facilities management company, GFSL, which was set up after the collapse of Carillion. All of those suppliers have been working with us to ensure that cells that are taken out of use because of vandalism or damage are returned to use within 24 or 48 hours. There has been a spectacular improvement in those areas. Just for balance, a lot of suppliers are really working with us on some of the challenges we face.

To give you a few examples from the courts, we do not have quite the breadth of contracts that the Prison Service has, but we have quite a few. Our big ones are facilities management, which we have spoken a lot about, and court security. We have very active contract management with those suppliers. As James said, they really have stepped up. Tomorrow, I will be sitting down with our facilities management supplier. I sat down with our security supplier just a couple of weeks ago. We will go through every single KPI and see how they are performing against that and encourage them to do better. They are our big two and we think that, broadly speaking, they are performing pretty well. Our facilities management company did 900,000 jobs in the courts last year to keep them running. We have pretty tight contract management. We provide quite a lot of transparency around that information. The other day I was before the House of Lords Public Services Committee talking about one of our other big contracts, which is language services. We provided that Committee with a lot of information about those KPIs. The key one there is what we call fulfilment rates—for example, whether an interpreter turns up at court. That is 94% and that is fairly public. We are working with them and also trying to provide as much transparency as we can.

We understand that obviously some parts of it will be commercially confidential—for example, maybe the bidding process. If you are awarding competitive contracts, surely it is a matter of public record who has bid the lowest, how it has been marked and what happens there. Equally, if you are going to penalise a company that has won a contract, what you fine them and for what reason, and what percentage of the contract that is, should also be published. It sounds to me as if you are hiding behind commercial confidentiality not to reveal very much at all.

It depends on the terms of the contract—

It shouldn’t, should it?

And when they are let and what is there. I understand the point the Committee is making. Where we cannot put performance information into the public domain, we are very happy to come and brief the Committee on those areas.

For example, we were asking recently about the Sodexo-Forest Bank contract. I did not particularly ask for this information, but, added to the response I got from Lord Timpson, very fairly, was a list of all the penalties that had been paid out. It does not tell me a huge amount because it does not tell me what percentage of the contract that is and how punitive that is in relation to it, but clearly you feel able to give that information in that context, while at other times we are simply met with a stone wall. It looks like other people, such as the chief inspector, are as well.

In that letter I think we talked about the fact that some of that information was not in the public domain as well. Where we are sharing this with you, we are clear about what has been put in the public domain and what has not.

What do you think Charlie Taylor means when he says he cannot get the data? What conversations have you had with him? I am sure you would have picked up that comment last week. What do you imagine he means by not being able to get hold of the information he needs?

I would be quite surprised if he has asked HMPPS for data that could be shared and it has not been shared.

He is His Majesty’s inspector of prisons, isn’t he? He should have access to data.

I agree. That is why I would be surprised if he asked for available data that could have been shared and was not. Perhaps you could give a specific example.

Perhaps I might ask more about the generality. Could you explain to me what would not be available to His Majesty’s inspector? What would not be available to him?

Opt out or opt in, this is data—

He should have access to everything he needs to interrogate the veracity of the information he receives, and to be able to make a judgment, which can be utterly critical to the survival of some people’s careers—or not.

Could you give an example perhaps?

I will go back to his evidence; I might ask the Committee Clerks to help us. I can assure you that he was very clear last week that he could not access the data he required to make assessments on particular places. We were talking particularly about drugs and prisons, drones, weaponry and goodness knows what else.

It might be that we do not have the data, which is different from us having the data and not sharing it with him. That is why it would be perhaps very helpful to have from him some examples.

I felt there might be a bit of intellectual curiosity by one of you when he makes statements like that to the Committee, and you might have interrogated that statement and checked what he was referring to.

Ross will come in. Can I check that I have understood the point? Could you repeat what you just said?

I wondered whether there might have been a bit of intellectual curiosity when he is making a statement like that, because it appears to me to be quite critical of the system. If someone had said that about my department, I would be on the phone to him next morning asking, “What do you need? What do you not have? Why have we not provided this? You can’t have this and you can have that.”

Senior officials in the Department meet Mr Taylor very regularly. I know that Amy does, as does Phil Copple and many other members of the team. I have a stocktake meeting with him regularly because the policy function sponsors HMIP. I often check whether he is receiving the necessary information from the Department. We will need to follow up with Mr Taylor and find out what he is not happy with. We will do that, but I can assure you that if he said he was not receiving information we would take that seriously. What we could do about it would depend on the matters that the permanent secretary referred to a moment ago, but we regularly speak to him and his team, and it is an important part of the Department’s business. Do you want to add anything, Amy?

As Ross said, we meet Charlie regularly. Any information at the local site that he needs to conduct inspection is statutorily available to him, or we give it to him. I think what Charlie was talking about was national contracts, which we have talked about already a little bit—for example, FM or an ISG contract to redo the netting to prevent drones. He would like to know where that is on the relative priority list and how much it will cost to deliver. Some of that is readily available; some of it is not because it is in procurement and those kinds of issues. As Ross said, we will absolutely follow it up and check that he has everything he needs, but we speak very regularly.

Chair, my sense is that for us to do our job properly we need to understand the situation. From what I heard last week, it was not clear.

This is something you may want to take up with the chief inspector yourselves. In response to a question from Pam Cox on whether he had access to data on the commissioning process, he said, “No. What we get told is, as Dame Carol said, that it is a commercial thing. Certainly, we see the results of commissioning where it has not worked out, i.e. we report on health services that are not as effective as they could be.”

We are obviously not the commissioners; that would be health. Therefore, even that commissioning process is done by health and regulated by health, because they are responsible for health services in prisons, as opposed to us, which may very well explain why he feels one step removed from that part of the process.

Obviously, there is an issue one way or another about commercial sensitivity in these contracts. Do the contracts themselves stipulate what is and is not commercially sensitive information, and who writes the contracts?

The contracts are obviously subject to agreement, and in some cases they would.

There will be specific terms in specific contracts. They are subject to the public procurement regulations. Contracts are published routinely, so that is a matter of public record.

Are there any contracts where you feel that the commercial sensitivity clauses have prevented you from making the inquiries you would have wished to?

There is no constraint on us being able to interrogate those contracts. There are some areas where it may be against taxpayers’ interests to put information into the public domain, if it would change the bidding behaviours of other providers in future. There might be some areas where for security grounds we say we would not routinely put that information into the public domain, but for us as a team there is no boundary to our ability to scrutinise the performance of suppliers and what is going on under the hood of the service, as it were, or the goods being provided to us.

The constraint is on the public, not on the parties to the contract, and we would be one of the parties to the contract.

In terms of the constraints on the public, in so far as we are the public for these purposes, how would you suggest that we can assess that, and what is the mechanism for assessment? There is a danger that there could be a perception—I only say “perception” because, to be clear, I am absolutely not making this allegation myself—that the civil service worked with contractors to produce contracts that made it difficult for us as representatives effectively to scrutinise what goes on. What would you say to that? Are there mechanisms in place to scrutinise this that are not us that currently we are not seeing?

I have not heard that allegation before. As the Chair has already said, this is my third time in front of the Committee this calendar year. We could not be more enthusiastic to be scrutinised by Parliament. On what is available, we are bound by the terms of the contract, but what I see in the Ministry of Justice are people in teams, all represented here, working incredibly hard to focus on the delivery of that contract. In some cases, notably in Amy’s area, if the contract fails, we have to step in. We do not want them to fail; it is not adversarial. A good contract is one where we are getting the best possible value for money for the taxpayer; where we have complete transparency so that we are able to scrutinise what that performance looks like; where the performance bears relation to the actual outcomes, because at the end of the day we are trying to deliver for the people in the street, for the citizen; and where we are able to scrutinise that and, where needed, hold them to account. There is a large number of penalty clauses in different aspects of the contract that we would have to administer, but often we work with the contractor. A good example might be electronic monitoring. We work with the contractor when they are off the delivery schedule to help get them back on to the delivery schedule. In cases where we do not think that can happen, as has been evidenced—for example, stepping into prisons—the public sector will have to step in, but our first job is to try to get an effective contract that delivers for the citizen and provides value for money. We are the people—we never forget this—who scrutinise that contract to deliver. As to the people who do it, I would like to thank them because they do a fantastic job.

From my perspective, I do not know what my motivation would be to do that since we are trying to run a very complex, difficult and risky organisation in which I need all of the players to deliver. Setting up a contract in which we were somehow in cahoots with a provider who was not providing would make my job extremely difficult.

I am not suggesting that you are personally corrupt. I want to be extremely clear that I absolutely am not suggesting that whatsoever, but a question needs to be asked about how that functions.

As a general point, there is much that we can talk about. I think we are focusing on what you cannot talk about. There is much that we can talk about and transparency around that. Where that is difficult commercially, it is routine for Departments to brief a Committee like yours and the Public Accounts Committee out of session in confidence about what is going on.

That is the answer to the question.

Yes. We and other Government Departments have done that and we are happy to do that, within reason.

Let me take an example to show where our concern comes from. As you know very well, it is not just about public money; it is about public safety as well. If we look at, say, the tagging contracts, they have had a very chequered history, particularly in relation to Serco and previous malpractice in relation to that. Serco have the contract back, at least the monitoring contract. I think G4S had the hardware contract principally; there are other minor ones. How can we be assured, given that history, that those contracts are being run well? You may say it is unfair, but what gets into the news is when people are not fitted with their tags when they should be. We also know there is a substantial increase in tagging for different purposes, whether it is alcohol tagging, early release or the licence period, and it looks like there is going to be substantially more of that in the future. Without being able to see the way the contracts are running, how are we able to know that the same mistakes made in the past are not being made now and that people are not walking around without tags who should have them?

Amy, do you want to pick up on the operational performance side?

James will pick up what lessons we learned from that episode and how we now try to cover that in contracts and the way we manage those contracts. From an operational perspective, I have been meeting very senior leaders from those organisations once a week to try to make sure they are doing operationally absolutely everything they need to. I monitor those key bits of data very regularly to ensure there is not a backlog. On both this and the previous question, regardless of whether we are doing this in-house or by contractor, what we have done is change the operating environment and the demand quite considerably in these areas, regardless of who is delivering the various contracts. It means that, whether we are delivering it directly or with somebody else, we have to work through those issues; we have to make them viable operationally, in the same way that if I was delivering tagging in-house, the asks that have been made of them over the past year—you mentioned some of them—would be a considerable step change, no matter who was managing the demand. We have to work together to ensure that happens. James will pick up all the contracting lessons we have learned, but operationally I am absolutely on those numbers. We work with people to try to give them a good line of sight about when the volumes might change. We all know, for example, that the sentencing review may change the volume requirements again. We have tried to manage changes in the contract so that we can be flexible when those changes come, but also ensure that operationally they can deliver, which means very practical things like getting on to their new systems. We and the whole of the CJS all need to work together, because, as you know, the single biggest user of tags is court bail, as opposed to anyone directly in my responsibility. The other thing is that we have a really active stakeholder environment where we meet with the police very regularly; we meet with the PCCs. I and a colleague are meeting with that group next week to talk about how we would manage that and any future volume changes.

What we want to be reassured about is that these are well-written contracts and that they are monitored. To take another example, on prison transport we are told there is 98% compliance, but if you talk to any court user, they will say it is one of the major reasons for delays at court. How do we square that circle? Is that because the contract is not written tightly enough? Is it that the figures being reported are inaccurate, or the court users are wrong?

There are a couple of things. James will want to talk a bit more about how the contracts are written, but in both EM and PECS what I can tell you is that there has been a lot of learning for a lot of years. These are not generation 1 contracts; they are multiple-generation contracts, and we have learned a lot about contracting. I can absolutely assure you that operationally both those contracts are managed very closely. The truth is that for PECS—to be really honest—in terms of the operating environment, the contractors might very well do what is in their contract, but because of capacity, for example, we might have had them doing extra redirections the night before, which means their vehicles are not in the compound where they should be. To be fair to them, that is not their error; it is because they were doing an extra move for us to manage capacity. I have full sympathy for the court user when they might have arrived late, but it might be because the journey that we asked that PECS contractor to make was twice as long as it should have been because of the implications of capacity. That is how you square those two figures; it is the operational environment they are trying to work in.

The data will be about when Serco failed because of something they did, whereas Amy is describing other incidents where it will not show up in the 98% figure, but would still have resulted in an outcome in court that was different.

We publish figures on the reason a trial might have been ineffective or cancelled. That figure looks slightly at odds with what the PECS contract fulfilment figure tells you. It tells you something closer to what I am sure you have heard from the legal profession. I have the figures somewhere, but in 1% or 2% of cases the trial cannot occur because of late delivery. That is a much higher figure than you will get through PECS contract fulfilment. They are different things. We try to be as transparent as possible when we have system issues being affected by judges, court staff and CPS but also suppliers. That information is available. On our point about transparency, there is probably more we can do to make some of those delivery figures easier to understand, or more readily understood. My team is talking to Amy’s on PECS about trying to make that a bit better so you have more faith in it.

Amy, you have said it is in your interests to work with the contractors to make sure that things are better. My concern is that because the contracts are clearly not working, as we hear time and again, and we have given you some examples from the frontline, as it were, it must take up a lot of your time and effort trying to work with them. What is the answer for the future so that you are not spending a lot of time trying to hold their hands in some respects, to get the contracts to work properly? Is it about having more public transparency, maybe leveraging, to make sure that the contractors themselves set their mind to the fact that they cannot fail, because people will know about it in a much clearer and more transparent way? Is there another solution? I have been on the frontline, and I have been there when trials have gone off because the defendants are not brought to court. I have been there when somebody is being prosecuted for breach of their probation conditions, and it turns out that their tag has not been working properly or has not been installed and things like that. That is not going to help, in my world, with the court backlogs and the additional challenges. How can we improve things going forward for you and your colleagues?

Yes. Thank you. It is a really good question, and it is true that it takes up a significant amount of our time to manage these contracts. The ultimate answer is that we have to make the operating environment more stable for anyone to operate in. If we go back to EM, if I was the provider of those services, I would have some of the challenges that they have. I do not think it is necessarily a commercial contractual boundary; it is that some of the operating environment needs to be more stable. A lot of what you are talking about, in terms of people coming to court and being delivered late, is driven by being occupied at over 99% for the last 18 months and the redirects and all those things. The first starting point for me genuinely is not the commercial considerations, because that would suggest that the people I work with are motivated in that way. For a start, a lot of the people I work with in those contracts might have been civil servants or worked in my world before, particularly in private prisons. They genuinely and generally are motivated to do a good job in what they are in charge of. The operating environment is the first thing we need to get stable for anyone to operate these things well. When it is unstable, it definitely has knock-ons. Equally, if a court starts late and sits late, that means they arrive late with me. That has a knock-on effect on reception. All these things are very systemic.

What would it take to stabilise the operating environment?

We need to operate at a lower level than 99% occupancy on the prison side. In probation, we might be about to start on it with what we need to do to reduce workloads. I am sure Nick and others will have views about other agencies and how they need to stabilise.

Just before anyone comes in, the criminal justice system is a system that has been operating at full capacity under incredible strain—as Amy says, 99% full—in an institution where you are getting people in and out of all those estates every day and the Crown court backlogs are going up. It would take a period of stability and then a sustainable system that is not full to the max.

What is a sustainable, viable level, and how much money does it take to get it there?

First of all, there isn’t any money, or perhaps not a significant enough amount. Money is not the only answer. The Government’s position is that we have to get to a more sustainable size of system, and that is what the criminal courts review and the sentencing review will deliver—or they will identify options that Ministers will make decisions on the policy about.

To amplify some of that, the reality is that the capacity of the justice system is relatively fixed. They have been trying incredibly hard to increase that in prisons and probation. Demand is exceeding supply in just about every jurisdiction we have in the courts at the moment—across tribunals and certainly in crime as well. The lead-in time for building courtrooms and getting judges is years, if not decades, and you need a healthy legal profession to be able to grow that. We have a very fixed supply base, and it cannot flex quickly. When you run it at such heat for such a long period of time, it creaks.

I will try to give you a straight answer from my perspective. I don’t think we should run the system any hotter than 95% occupancy.

Thank you very much. You have probably gathered that I am interested in the people side of things, having worked in the courts for many of the 21 years that I was in the CPS. If we can turn to staffing, that is something I am interested in. Let’s stick at the moment with the cost side of things. I know we have concentrated on cost, and efficiency savings have been mentioned already this afternoon. The annual report for ’23-24 identified 893 exit packages, which cost £46.6 million and is interesting because we are not inundated in this country with staffing in the Ministry of Justice. Can you outline the exit packages briefly, the types of exit packages, and when you would choose to use them in the service?

I will say something about the types first. The lion’s share of all those exits is in HMPPS, so Amy will want to add. Essentially, there are two or three types of exit. There are medical efficiency exits, where for various reasons somebody can no longer continue in their job for medical reasons. That is a particular type of exit. In fact, in this case, 576 of the 893 were medical efficiency exits. Then there are exits that would either be voluntary exit or could include compulsory redundancy-type exits, which is where somebody’s job for various reasons no longer exists in the way that they were doing it, and there is no other appropriate role to be found. In the year in question, there were 272 of those sorts of exit in HMPPS and one in HMCTS. Amy, do you want to say something about HMPPS?

Yes, of course. On the first of those two types, you can appreciate given the operational nature of our work that it is fairly routine that some people are just not able to continue in employment with us because of medical inefficiency. We have requirements for certain levels of fitness to undertake control and restraint—C&R. The more interesting thing, because it was unique in the last year, is the VEDS package we had for One HMPPS. One HMPPS was designed to do two things: to make sure that in seven regions we had an area executive director, which means that we have someone who oversees both prisons and probation to try to drive the join-up between the system, in particular the fault line of going into custody or going out of custody; and to make a reduction. We set ourselves a target of £37 million to save from headquarters so that we could invest in the frontline. We achieved that through a combination of 20% reduction in headquarters and some reduction of change programmes, and those voluntary exits facilitated that. We think that we will save £18.6 million a year. It will pay back and wash its face by the end of this calendar year—just over a year—and then the reduction in headcount is permanent in headquarters.

As you would expect, when you are seeking to make efficiency savings and you are doing it through a restructure, the restructure might be delivering lots of other things, including better outcomes and better ways of working. Alongside it, if you need people to exit, it is normal to have a voluntary exit scheme.

Were the efficiency savings just because of that restructure, or were there efficiency savings elsewhere as well?

Slightly confusingly, what is described in the report as efficiency exits are actually the medical efficiency exits. The number to which the £24 million relates is the 576 medical efficiency exits. The other exits, the voluntary exits, were the 272—the smaller number. As I say, there were two from HMCTS. I don’t know if we had a handful elsewhere.

Thank you. That is really helpful. Are you expecting to have to make any more efficiency savings for the next year, for ’24-25 and beyond, at the moment that are not medical and are simply efficiency savings?

I am definitely expecting, in line with what the Treasury is asking every Government Department to do, to have to make some efficiency savings. Of course, we are talking about exits that come from staff departures, but that is to be determined. When you are seeking to make efficiency savings, there are many ways of doing that, and obviously you can get more efficient by being able to do more with the same, or you can seek to reduce the number of staff. Actually, we have a particular issue.

It is probably worth touching on the Courts Service. We are reducing our spend. A lot of our spend is on people. We are reducing the number of staff we have in HMCTS, and we have been doing that for a couple of years, and we will be doing it for two or three years hence. They do not show up in these particular figures. They do not attract a voluntary redundancy scheme or they are not retired in this way. We are making those staff efficiencies by investing in our digital services. They just come out mainly through natural attrition as staff retire and as they leave and so forth. There is quite a big chunk of workforce leaving, but it does not show up in the pay-off figures.

In HMCTS, you have the highest turnover of staff: 14.5% in ’23-24 against the civil service rate of 7.5%. Does that concern you? Do you think that is a problem?

At that point in time, that was true. In part, it was to be expected. As I have just set out, because we had investment to digitalise the system, we then had to recoup that investment by cutting our costs. Therefore, for quite a long period of time, we held quite a lot of staff on fixed-term contracts in anticipation that we would not need them in the future. That high percentage figure includes staff whose contracts came to an end and other staff who, basically, we were scheduled to have to lose at some point in time. I do not like losing staff. We have really good, loyal staff. That figure has come down a lot since. It is now at about 10%, which is a good thing. We lose quite a lot of staff, as I say, because we have to cut our headcounts. It is more or less in balance. There are some specialists we are particularly keen to make sure we have a good supply of. It is natural to lose a certain number of staff. Quite a lot of our staff leave because they are retiring. We have an ageing demographic, and a lot of our staff are 55 to 60, so unfortunately, they are coming to the end of their career. Two thirds leave for other reasons, either promotion or resigning to work outside the public sector, so we get that turnover.

There are quite a lot of internal transfers within the civil service, aren’t there, particularly in HMCTS? Do you know why people are moving Departments? What is driving that?

We know why people leave. There is quite a lot of focus when we talk about the courts on our legal advisers, who are critical to keeping the magistrates courts running, leaving to the CPS. That is often something thrown at us. Actually, the figures there are not as dramatic as you would think. On that, we have been really successful. We have recruited more than we should have. We have a lot of bright, young legal advisers now coming into the magistrates courts, and they are making a big difference. We get a lot of people leaving, particularly for the other big operational Departments such as the Department for Work and Pensions and HMRC. They generally leave for promotion or pay increases; 55% of my staff are paid £23,000 or £24,000 a year, and there are better-paid alternatives out there. They are incredibly loyal, largely, but of course some will want money elsewhere.

Is there an issue in HMCTS of career progression opportunities for staff?

It is quite a complicated question. No: we have good developmental schemes. We definitely want to get people through the grades. Sometimes, we find it difficult to get people to take a different job. They may perceive it as more stressful. Certainly, we see that in some areas. Generally speaking, we invest a lot in trying to develop people through the grades. We have some really great schemes, but it is not for everyone to move through the grades. The offer is there. We have a really good offer, and we particularly try to make sure that that is better for, particularly, young lawyers coming in. In some areas, it is a bit more difficult to advance. If you are a lawyer, there is a ceiling within HMCTS. We do not have many very senior lawyers, but there is potentially a judicial career, and we are trying to highlight those benefits, with some success.

Could I add to that? First of all, moving within MOJ is a good thing. Obviously, you want people to stay for some period in their job, but we like it when people who have policy experience go into operations or who have operational experience go into policy. That is one of the things that we can offer as a Department, because we are a Department that runs the whole spectrum. We think it makes us better at what we do if we have people who have worked in lots of different bits of the system. One of the issues for the CJS, as you know, is that it is so complicated, as indeed is the whole justice system, and it needs to join up more. Moving within MOJ is a good thing. People leaving the civil service is a shame, but people leave MOJ for another Department if they are going to get more skills. A number of us have worked in other Departments. One of the things that the civil service can also offer is knowledge of different areas. It is not necessarily a bad thing if people leave the Department for somewhere else in the civil service, especially if, as they often do, they come back because MOJ is such a brilliant Department.

I don’t doubt it. I agree that for the people, the staff involved, it is an incredible opportunity that they can move between Departments. What I am concerned about is what we have been seeing in the courts. Nick just mentioned the word “stressful”. I am concerned about people leaving because of the impact that the current criminal justice system has on the staff. It is probably a question for you, Nick, and I think I know the answer. Are the current pressures that the courts are under, with the court backlogs that we see at the moment, also a driver in staff moving to other Departments or leaving altogether? If so, is that something you are concerned about?

It is quite a complicated question. First, we ask staff every year how they feel, and that includes a headline engagement score. Broadly speaking, for our headline engagement score, we got a bit of a boost in covid. People felt very valuable in their work. It is about as high as it has been, and it has stayed steady despite the pressures. That does not tell us that we are in crisis. We have something called a PERMA stress index, which indicates how stressed people feel and how positive they feel. Again, that is not in a sense of decline. It is true that people feel pressure. They feel pressure in two ways. When you go to a court and they are sitting at full tilt, sometimes a great sense of achievement comes with that, and genuinely staff tell me that. Sometimes, it is just too much as well. It is quite nuanced and quite balanced. How we measure it indicates that, broadly speaking, staff are feeling valued. They are under pressure, but they feel valued, and they should, because they are.

They are doing an absolutely exceptional job as well.

But under pressure.

But under pressure, which is why it is particularly exceptional.

In the courts context, it is quite complicated in terms of how it works. Effectively, it removes quite a lot of the administration work that is typically done in the backroom of a court. That work is being removed. Quite a lot of that work goes to our service centres. We have five national service centres now that pick up the phones. The phone calls used to go to the magistrates courts or the Crown courts. They deal with the admin and get all the documents ready and so forth. That is a good thing; it reduces pressure on the person in the court. What they feel, though, and what judges feel a bit, is that there are fewer people around the place, and it is quite difficult to explain that there are 3,500 people sitting in a call centre helping you. Broadly speaking, it reduces admin pressures, but they cannot see who is now busy with that. It is a quite a complicated thing to explain.

The thing to add, which Nick knows better than anyone, is that sometimes the end state alleviates the pressure, but the process of delivering the change and the reform while also continuing to do the day job actually can increase the pressure in the short term. We are a Department with a huge number of change programmes ongoing while we are delivering absolutely crucial public services. In those periods, you can see stress increase because people are having to learn something new alongside continuing to deliver. It is the famous case of having to “Build the jet plane while flying the jet plane.”

It might be worth me amplifying that. That is certainly true. We have been asking staff to work incredibly hard coming out of covid. At the same time, we have put a lot of change on them. They have had a bit of a double whammy. We are coming to the end of that now, and that is quite a good thing. We are beginning to see that we can come out of it, but they have had to deal with that. Also, when you fundamentally change systems, staff are dealing with the old computer system, the residual stress of paper, and a new system. What we need to be doing in the next few years, and have started to do, is simplify: “This is the way we are going to be running things now.” They have had a lot to juggle with.

It has far from failed. It has delivered a lot. This was the biggest transformation project in the justice system ever attempted globally. That was how ambitious it was when we set out. We are coming to the end of it now, but it has delivered a huge amount. We could not have got through the pandemic without having digitalised the courts.

Shall we deal with that issue, as you have raised it, Pam? We will go back to prisons in a minute, if we may. You wrote to me on 13 February, Mr Goodwin, with a summary of what you thought the court reform programme had achieved and what it had not, and where things had been taken out of scope. Clearly, there are issues. Pam can correct me if I am wrong, but I suspect that what she meant by failure is that we have spent the money—£1.3 billion—and certain areas have gone according to plan, some have gone ahead in a modified way, with some you having new digital systems running alongside old systems, and some are out of scope entirely. Overall, though, it seems disappointing—I put it no more strongly than that—that we have a situation where what was ambitious was extended over a number of years and has now gone on for nine years. I know we have written back and we have asked when a full evaluation is going to be published, so you might want to deal with that point as well. None of the targets, in terms of reduction of staff and savings going forward, has been reached. Yes, obviously, you would expect that for the amount of money spent some things would be achieved, but overall the programme has not been a success, has it?

To address the general point, it was incredibly ambitious, but it has delivered a lot. It was in crime, civil, family and tribunals, and substantially many of those jurisdictions have been completely changed, or will be completely changed very shortly. Yes, we would like to go further. When you are a doing a project of that size with a pandemic in the middle of it, there are going to be some changes along the way. There were quite a lot of decisions that we had to make along the way. Essentially, as well as us—I can talk a little bit more about the benefits we are accruing from that—we have also managed to really improve services for the public. Look at the satisfaction rates. No one likes getting divorced. No one likes getting a speeding ticket. But if you ask people who have gone through a digitalised service, “How was getting a speeding ticket through the justice procedure?”, 83% of them say it was good. We ask them, “How was online divorce?”, and over 90% say that was good. Our savings are made up of reducing administrative time, largely, in the courts or allowing judges to be more efficient. I will quickly run through some of that. For every saving that we make, generally speaking that is something that comes to the court more slickly now. Every court case has at least one, but possibly two, three or multiple parties all of whom also get that benefit. When you think about the transactions with the DWP, with the Home Office and with local authorities in public law cases, there is a much wider dividend there than I spelt out in my letter when I was talking about where we are on the benefits. Where we are in terms of achieving the savings at the moment—this will continue to improve—is that a year or so hence, when we get to completing the reforms, we will be saving £135 million from our budget every year going forward in the courts, and that is a big chunk. That is less than we set out to do, but I will explain where the reductions come from. There are three buckets where we lost some savings. The first is what we call judicial benefits. That is a bit of a misnomer. It actually means there were certain reforms that we thought meant that we could make the judicial day more effective, and we have many of those, but there were some that have not come through. Not all of those relate to whether we were successful with digitalisation at all. In fact, largely, they do not. The business case assumed that the panel composition in certain tribunals—for example, the mental health tribunal—would change. It assumed that judges in immigration, rather than spending one day hearing a case and one day writing it up, would spend two days hearing cases and one day writing up. It assumed that judges would become 10% more efficient generally, without anything particular underneath that. They have proved really difficult to realise, partly because they do not relate to what we do on reform and partly because the complexity and weight of cases in the system meant that things that were achievable were not there. That is a good third of where things have reduced. We have not achieved all the staff savings. There are about 1,000 staff we retained that we thought when we were setting assumptions back in 2016 and then in 2020 we might be able to get rid of. What we have provided here is an assessment of where we are in the real world, not the assumptions that were made back in 2016. We found it really difficult to get rid of the 1,000 staff that we thought we would. That is for two reasons. One reason is that looking at the magistrates court and the Crown court and the amount of work that they have to deal with and saying, “I’m going to take 300 people out of the magistrates court and 300 ushers or clerks out of the Crown court,” was a real risk to service continuity as we were trying to deal with the backlogs. In those circumstances, you have to say the health of the courts is more important than delivering on a particular line and business case. They are the sorts of decisions we had to take. There were some reductions in scope. We lost about 15% of our benefits through scope reductions. If you take that as a proxy for how much we delivered, we probably delivered about 85% of what we set out to, which is pretty good, but there were some areas we had to take out of scope. They were really difficult decisions. Every time we took that decision, effectively, we were prioritising what was going to give us the biggest bang for our buck; we decided not to digitalise some of the smaller tribunals and we decided to de-prioritise some stages of civil, so there were some lost benefits there. There were some other areas where things did not turn out quite as we would have liked. When we first developed the common platform, which is a system in the magistrates and Crown court, the original aspiration was that the Crown Prosecution Service would be fully integrated into that system. That is not how it works now. We have a really good interface with the Crown Prosecution Service, but that original notion fell away over three and a half or four years ago, so that is no longer there. Then, of course, there are a few bits along the way. If you add up what I would like to be a better savings figure, the actual scope piece is a very small part of it, and the rest were very sensible and level-headed business decisions.

Off the back of what you were saying about the 1,000 staff you have retained—rightly so, in my opinion—and stepping away from the courts and looking at the wider MOJ, staffing in Ministry headquarters has increased by 66%, with an increase of slightly under 3,000 full-time equivalent staff in ’23-24, while we know there are challenges on the frontline. Antonia, this would perhaps be best answered by you. Could you explain what the benefits of having those additional staff in the Ministry headquarters would be both for the frontline staff working in the MOJ overall and for the public through the MOJ?

In the number that you mentioned for the growth over the last four or so years, 700 of that number came following probation unification. When we in-sourced what had been outsourced as part of probation, that included a number of, essentially, HQ tasks—accountants and all the people who would have been doing the work running the thing who were not on the frontline. They came to HQ, not to HMPPS. About 1,300 of that number is the digital and tech capability that we have built up. We have a justice AI centre now. To go back to where we are going to find these efficiencies, and all that work on digitisation and automating, we have done some further consolidation of functions. The functional leadership model says to try to do it once. So rather than have every agency or ALB have their own function doing HR or commercial, we centralise them, and that has been a journey. Over time, about 2,000 of that number were moved into James’s corporate centre from, I think, HMPPS in that case. Essentially, it has been a combination of the consolidation of the functions, a specific in-sourcing programme, and then deliberately building up, which has been part of our workforce strategy, our digital and tech capability.

I see. The digital, as we know, has caused problems in terms of the finances.

Although they are slightly different things. A lot of what Nick just described, which is the reform programme—and I agree with what he was saying—because HMCTS is essentially a joint venture between the Lord Chancellor and the Lady Chief Justice, sits within HMCTS. What I am talking about is an investment into Justice Digital, which would include that and would work closely with the team in HMCTS, but actually is going to go much broader and look at how we can deploy technological innovation in, for example, probation or tagging, which we briefly discussed earlier. There is a huge amount of work that we think we need to do on the justice and tech side.

Where I see we are now—tell me if I am being unfair here—is that the reform programme and common platform were ways of taking mainly paper-based systems and digitising them. About half of the judicial workload in the county court will now be progressed digitally rather than being issued on the old legacy systems, requiring paper handling as cases progress. Yes, there has been a substantial amount of work done, but there is a substantial amount left to do. You are talking about other areas with technology. You have not got as far as you intended with the reform programme. What are you going to do now? If there is no money about, are you going to continue in a hybrid fashion? You have de-scoped quite a few parts of the programme, such as enforcement, which is important. You have a digital system until you get to enforcement, and then you are back on the paper-based system again. What is the plan now?

I will come back to the county court. We will be rolling out private family law, and we have public family law in, so family will be digitalised very shortly. We have done the job in the Crown court that we set out to do and we have digitalised all the main tribunals. There are some smaller tribunals that have not been digitalised. In the county court, there is a bit more work to do. Some of the reasons things came out of scope were the big policy changes happening, and that is certainly the case in respect of housing and possession. As that legislation comes into being, we will digitalise our housing and possession cases, and they will then become digital cases. Enforcement was also taken out of scope for two reasons. The first is that it is right at the end of the process. We wanted to make sure that as much of the process was fully digitalised end to end before we went into the process of doing enforcement, because it would have just floated off somewhere. We had to prioritise getting as much of the end to end to that point done. There were, at the time that we were doing this, other policy changes in the civil courts that meant it made sense, because we had too much uncertainty to digitalise enforcement at that point in time. There are other parts of the civil reform journey that we did not get to. The big one that people always mention will be bulk claims. We had to make some hard scope decisions at the end of the reform programme. That was because, frankly, we were running out of time and money, and we wanted to prioritise the things that gave us the best bang for our buck. Bulk claims simply mean high-volume claims. They can currently, and will continue to be, issued digitally. The thing with a bulk claim is that only a very small percentage of those claims are ever contested and ever come before a judge, and therefore ever have to go on to paper. But because they are so high in volume, it happens, and that is why, when it comes to the judge’s work, by the time bulk claims come through there is still too much paper in the system. We very much would like to get the job done there. I have a burndown of how we can get rid of paper in the county court, and we are talking about the county court civil jurisdiction over the next period. We are making the case for that. We begin to eat into it very quickly, so by the time we are through housing and possession, and by the time we have done everything we have scheduled, 91% of all cases will be issued without any paper and we will get to about 61% of cases being truly paper-free by the time they reach the judge. The rest is not that difficult and remote to do, and we definitely want to do it, and we will be making the case for that. It is a no-brainer, but we have to be pragmatic. We have to get as much out of the court and get the bang for our buck, and they are the difficult calls we have to make.

We went to Central London before Christmas. We are intending to go the National Business Centre in Northampton in a couple of weeks. There is a lot of paper. If we go back in 10 years’ time, will it still be the same?

Those two areas are the two with the most paper. I don’t know whether it is a coincidence that you went to the two places with the most paper or whether you were directed there.

Conspiracy.

The Central London county court is the really difficult end of the civil reform journey because it deals with the most complicated cases, which are most likely to be bumped up into the High Court. That is the really hard end of complexity. What we are discussing and what we are trying to do in preparation for making the case for further investment is how we do that. That is the really hard end of it. Northampton is a different thing. Northampton relates to the fact that there are still some paper cases in the system, and we need Northampton to deal with that. That is changing pretty radically. To be honest, in this journey, there are always bumps along the road. We did not get it completely right in Northampton over the last couple of years. Their performance is now really good. Any of the concerns you may have heard about their performance slowing down in the county court are dissipating incredibly quickly, and the ambition is still very much to eventually do away with the need for paper to be handled there.

I have one last question. What is preventing you from going ahead with the parts of the programme that have not been achieved? Is it simply lack of money, or have you revised your view that the cost benefit is not there? I am assuming you are going to do a proper evaluation—it is such a large programme—and publish that soon. It feels to be hanging in the air to some extent now. Where do we go from here?

We will certainly be doing that. You wrote me a letter. I will be responding to your letter setting out as clearly as possible exactly where we have got to. All the way through this programme, we have been conducting lessons learnt and we have been reviewing things. We have had three NAO reports into it. We have had a number of independent reports. Every single programme has been learning lessons. We have a great big library of learning that we take seriously and share with others, and it has been quite profound learning, to be honest. All that, rest assured, is there. The Ministry of Justice will be conducting a big MOJ review at the end, focused very much on things like whether we have improved access to justice and so forth. The other thing that we have been publishing are some really interesting reports. We have now digitalised and we have a lot more data on what is going on, and we have data on the basics like demographics and protected characteristics. As we go along, we see whether a person with this characteristic has more difficulty interacting with that sort of service, and that allows us then to improve those sorts of services. They are available for you to see as well. We bring it all together to share. As we go along, we are publishing more and more information about that as it comes together. We are trying to be as transparent as possible.

I will say something overall about what we are trying to do in terms of our data. I referred earlier to the fact that we have built up this capability. We have three things that we are trying to do with our transformation programme. First, we are firming up the core foundations and improve the legacy systems that are in place. Secondly, we are redesigning existing services and, where possible and where we have the money to do so, digitising. Thirdly, we are looking to ensure that we design new services with tech at their core—thinking user first from a tech perspective in the way that people will want to interact with the Government in a technological way rather than in a paper-based way. We have a plan for doing that, and some of our aforementioned ongoing work on the SR and discussions with the Treasury will be about seeking to think about how we can invest in some of that. On prisons, there are prisons and probation. Probation involves deep expertise, but there are some manual elements that can be automated. Amy may want to say something about that.

I have a quick point before Amy comes in. There are two things worth noting in respect of prisons and how they operate with the courts at the moment through the reforms. The first is that through the common platform we are able to send results. At the moment, results in court are sent on the day to Amy’s team for them to do what they need to in prison and probation. That is a much better, slicker, safer and more secure process than the passing of paper. The other thing we have done through our reform programme and with Amy’s team is that last year, there were 64,000 video contacts between prison, probation and courts. The world has changed quite a lot because we have been focusing on digitalisation.

On the narrow particular point about the link with courts, Nick has covered it, and you are absolutely right. It is a huge benefit for us to get the outcomes so quickly and to be able to know that exactly. As you know, people often think that a prisoner goes to court and gets one sentence for one offence. It is very rarely like that; there are multiple offences interacting. The digital system has made a huge difference. More broadly—I don’t know if you want to get into it—there are digital services that we are trying to improve in prisons and probation. Do you want to get into that now?

We are hoping to finish at 4.30. We have a couple of areas still to cover. We have said a bit about prison building. Do you want to say anything more about that, Tessa?

I want to ask a little bit about prison building and the increase in places that is going to be needed, from 95,000 to 105,000—that is over the next four years, isn’t it? That is what was anticipated. The 14,000 additional places that were going to be in the three G prisons—Grendon, Garth and Gartree—are going to happen after that date. How are you going to meet that increase of 14,000 places?

The 14,000 is made up of a number of things. There are four new prison builds: the one we are about to open, Millsike, and then the three that you referred to, for which two have planning permission and one is still in the appeal process, having been 14 months in the planning process. There are a number of areas like building additional house blocks. There are rapid deployment cells. There are other ways of bringing supply online beyond those new prison builds. We are hoping to open some additional house blocks in the next few weeks. Do you want more detail?

You will be there, will you? You will get your 14,000.

Yes. The 14,000 is made up, as the permanent secretary says, of both building on completely new greenfield sites and a lot of expansion on existing sites. We do that through a variety of ways: more secure house blocks, rapid deployment cells and expansion of the open estate. The 14,000 is a mix of those things.

I wonder if your question is also getting at the underlying growth in demand and how we are going to meet that. There are two things going on. Roughly speaking, every year there are about 3,000 equivalent prison places-worth of demand coming into the system. What we have now done, which I hope is helpful both for the Committee and for others, is to be transparent on the profile of supply, which is the 14,000 places. We also published our projections of demand over the course of roughly the same period. You can look at the two, and at what the gap is. In effect, the Lord Chancellor has set out that the sentencing review and the supply need to combine to meet those overall demands. The plan is always a combination of both. It is both the supply and the demand measures that you want to take.

Thank you. Can I move now to the number of cells, effectively, that are out of action and how that has been dealt with? I know in particular we have Dartmoor, which has been shut, and is going to be shut for another two years. Do you have a date for when it is due to be back on? It has three years from last August, which takes us to August ’27. Is that correct?

Shall I pick up a couple of bits? On the first part of your question, on average last year we had about 1,700 places out of use at any one time.

But we have already heard that they are being turned around in 24 to 48 hours.

That is some of those. There are two different things. Some of the places that are offline are just because a prisoner might have gone in there and damaged the cell. They are turned around very quickly. The 1,700 are places off for major work. That would quite often be FSI places—fire improvement works—or big things, what we call priority 1, which is replacing a whole boiler, doing all the showers, redoing the flooring. That 1,700 is major maintenance work.

That average of 1,700 is fairly consistent across the estate across time, is it?

Exactly. That is an average of what we used. I actually had a red line, which I think we have talked about with the Committee before, about continuing the 1,500 fire—FSI—works, and that is because we have committed that any of the 23,000 cells that are not remediated and that do not have the necessary in-built smoke detection will be taken offline at the end of 2027. We have to keep a good profile of work, otherwise we are going to lose too many cells at the end of 2027.

We have already talked about ISG and how they have come out of the process earlier. I presume that the Cabinet Office is now tendering new services.

Yes, exactly.

That will allow you to carry on with this programme rolling through into the future.

Exactly right. We never used just ISG; we used a number of contractors. We are optimistic that the slack created by ISG, the gaps, will be picked up by others, but it is fair and honest to say there are probably going to be more cells that are not remediated by the end of 2027 because of the ISG issues than we had hoped for. We will do our very best to get that work picked up. The other problem is that now, in order to have that work picked up by someone else, we would have to have even more than 1,700 places offline, which, given capacity, is a very difficult thing for us to manage at the moment. Did you want to me to pick up on Dartmoor?

Please.

Just on Dartmoor, we don’t know. The straightforward answer is that we do not have a date for when we will put it back into use. That is because we need to get to the bottom of where we are with the HSE on the regulations that govern other persons, which is the way prisoners are classified in the prison, which is a bit different from “residents”—we ended up talking about that a bit in PAC. Then I will be able to decide what remediation works I can do and how effective that is. Until I have gone out to contract for that, because I know what regulations will happen, I cannot know what the end date will be.

That presents a problem, doesn’t it? I had HMP Shepton Mallet until 2013, and that was 400 years old—jolly cold, but very effective, in my view, with very few escapes, mainly because the walls are 40 feet high. Having been to Dartmoor as well, there are challenges with that particular building, aren’t there? I presume there is an enormous cost if you just leave it empty into the future.

First of all, I remember Shepton Mallet very fondly. I even worked there for a little bit on detached duty. On Dartmoor, it is very clear to say that my position remains that we very much hope to get it back into use. First, it was a good prison, as you said, although it does have challenges—its location and various things in the buildings, not just radon. Secondly, there is no way that anything else we could build from scratch could be done more quickly or in a more cost-effective way for the taxpayer. We very much hope to be able to get back into Dartmoor.

Some of those things are levers that you can control and some of them are not. In terms of the legislative element, what is the timescale for that?

Sorry, could you tell us a bit more? Which legislation did you have in mind, just so we can focus on the right thing?

Sorry—possibly it was not legislation; it sounded like there was a point about prisoners being treated as other persons for the purposes of legislation.

A lack of provisions?

Yes. Is there a lack of legal clarity? What is going on there? Could you unpack that in a way that is intelligible for a member of the general public? How many places are we talking about in this prison?

It’s 640.

Okay, so it is a significant element of capacity.

We will do our best. I am sure you appreciate that, given that this is a matter of safety and that radon causes lung cancer, it is vitally important that we understand not just the regs but also the health risks.

Do you regret signing the new lease for Dartmoor, because it looks like it had very serious problems?

Do you want us to answer the question on the regs first?

Shall we say a little bit about what we can do about the regs?

I will try to be brief. Broadly speaking, the way the regs are drafted refers to a category of other persons and they refer to an exposure that those other persons can get. It is ambiguous whether that exposure limit relates to the total or the level above the background level of radiation, and these are things that we have been seeking to clarify with the HSE and with our colleagues who work on health protection. It is important both to be compliant with the law and, as I am sure you would appreciate, for the safety of the people involved.

Yes, both the staff and the people.

There are several other issues, but I will not bore the Committee with them unless you want us to focus more on this.

No, I do not regret signing that lease. It is certainly true that the issues with radon have become more severe than we were aware of at the time of signing the lease. That is because at the time we signed the lease we first detected radon at concerning levels in 2020, but it was not in residential areas. It was in areas where we thought we could remediate it. It is certainly true that the position has changed. I am not sure how much the Committee knows, but the way you test for radon is quite complicated. You have to leave something there for three months, then you have to go away and have that analysed—none of it is quick. It is not like carbon monoxide or whatever, where you just go and test the level that day. It is quite a long-winded process. Nevertheless, I come back to the fact, as we have just said, that it was a prison that performed well. It has 640 places. We all know the difficulties we have had with planning permissions and other things. If I was to try to start again from zero, it would be a very costly and very difficult thing to do. We very much hope with these combinations of things that we will be able to get back into Dartmoor.

You have no plans to build any new prisons. Are there any current prisons apart from Dartmoor that are fully closed or have wings that are fully closed?

No, we have no fully closed prisons. We did re-roll Cookham Wood. Colleagues might remember that that was YCS, a youth establishment. We got 70 extra places, and we are building that up now over time. There is a closed wing at Dartmoor. It is separate from the radon issue because it has been closed for a number of years. We will consider, if there is a value-for-money case, reopening that wing when we do the remediation works, because it is clear, whatever happens now, that there will be significant remediation works. That might give us an opportunity to do what we need to do to bring on another wing, and that would be on top of the 640. That has been out of use for a long time.

Is Wandsworth now full?

No, but we have taken places out of Wandsworth. They will be part of the 1,700 that we talked about earlier. We are doing three sets of work at Wandsworth. I know there is a lot of interest in the Committee in Wandsworth. We are doing fire safety and shower remediation. That started in ’24. It is a four-year programme and it finishes in ’28. We are doing PIDs—that is, perimeter security detection—and CCTV.

I am sorry to keep interrupting, but I am very conscious of time.

I understand.

I am conscious that we always end up in these sessions not dealing with probation; we are probably going to have a probation session at some stage. I will ask my colleagues so that I do not keep hogging the mic. Does anybody wish to ask any questions on probation this afternoon?

Certainly. Colleagues may know that I was the equivalent of the area executive director for Wales. I had both prisons and probation in my command when that did not exist elsewhere. I think in both Wales and Greater Manchester the much closer devolution ties we have to things like co-commissioning really benefit people on the ground and real delivery. I will give you an example from Wales: a thing called Dyfodol, which is an end-to-end drug service. Everyone from the CPS right through to the police station, right through to the court, and right through to me in prisons or probation has the same access to what drug someone has been on and what they have been taking. The benefits of that for the system are huge. There are also huge benefits for the offender in the obvious continuity of care and not repeating themselves all the time, every time they go through it. That is because the relationship we have is different. In Greater Manchester, we have taken a different approach to what we do with community accommodation. It is the same in Wales. I am not sure if the Committee is aware, but it has been one of the game changers for us in terms of providing 84 nights of accommodation at the end. I have been very clear in this Committee and I will be again: I am not in favour of changing the model of probation, for lots of reasons I can go into. I am very in favour of having the closest commissioning that we can with bodies. Greater Manchester and Wales are brilliant examples. They are not fully devolved; we have a very close relationship. The only thing I would say though is that you need the geography to be able to dock into. Both Wales and Greater Manchester are a very defined thing. London, you can argue with MOPAC, also has the same thing. We do very interesting things with MOPAC, but in the south-west it is much more difficult to find a very clear geography that you can dock into. I am very much in favour of that way of working. We need a platform that we can dock into that would allow us to do those things to work with people on a commissioning level. I am very much in favour of it.

In terms of the CRS?

Yes, definitely. We have learnt a lot. That was an example of a first-generation contract. We have learnt a lot in the first generation. One of the things we are also going to do is not to commission every service separately—finance, benefit and debt, separate from accommodation. This time, we are going to put all that into lots so that regions can decide how much of one thing versus another thing they want, rather than having them stuck in lots.

Would you agree that, when it comes to rehabilitation, having an effective probation service is absolutely crucial?

Hands down, yes.

Does it concern you that the probation delivery units last year were assessed as either being inadequate or requiring improvement? What is being done to put that right? What are the causes of having an assessment whereby the probation service is assessed as requiring improvement or being inadequate?

First of all, yes, it concerns us, and we are working really hard to try to fix it. There are a few things. I will start with the causes and then I might come to what we are trying to do to fix it. Some of the causes are things that have happened over the last 10 years. You all know that there has been a lot of structural reform in probation. That has definitely had an impact. At the time when we were trying to get unified, we had to do that against the backdrop of covid, and all those things provided huge challenges. The other thing is demand: demand has increased very significantly for probation. What are we trying to do? First, it is to train and recruit people, because the workload is too high at the moment. We are very clear about that. Secondly, we need to focus on what it is we want probation to do, because it is clear at the moment they will not be able to manage the projected increase in demand. We have been very successful on recruitment, but even with that we will not be able to manage the increase in demand and improve quality, so we have to decide where we want them to focus. We have done that in a couple of ways already. We have done Probation Reset, which is taking the equivalent operationally of circa 40,000 cases out of the caseloads, and that has made a very real difference. You will know that, when the Lord Chancellor made her speech, we talked about where we need to focus for lower-risk offenders, and that might be on reducing reoffending, as opposed to very intensive supervision done by fully qualified probation officers. We are trying to do all of those things. The final thing, which we have touched on but where I know we are not going into depth today, is what we need to do in digital services, which in probation is really about a productivity measure for staff who have to spend too much time at the moment cutting between systems, cutting and pasting and drawing together information. As you know, probation, probably more than anyone, is reliant on a huge number of partners—the police, social services and others—and staff have to go and look for information in too many places. There are two digital programmes designed to mean that a probation officer can spend less time doing stuff they need to do on a computer and more time face to face with offenders. Those are the things that we are trying to do.

As you say, if the workloads are too high, that is going to reduce effectiveness, so you need to get more people working in the service. I understand you have had some difficulty in retaining staff. How successful are you in retention and recruitment now?

I genuinely think we have been very successful in recruitment. We have had a record number of PQiPs—that is our acronym for recruiting qualified probation officers as they come into the service. One of the problems is that during TR there was no recruitment, so we have been playing catch-up ever since then. We have had record numbers. At the moment, we have a gap of 1,854 qualified probation officers. We have 1,154 in training. You will know that the Lord Chancellor announced that we were going to recruit for another 1,300, which to your question about retention will probably be a net increase of about 700. It is true that not all of those will stay. I don’t want to say to you there are no lessons that we can learn about recruitment or retention. Of course there are, but we have been very successful. I would expect in a world like ours, which is difficult and stressful work—we talked about that in a different context earlier—that it is not a job for everyone. Yes, of course, we can do more to try to make sure they understand the demands of the job before they come. An example of that is that we now have a non-graduate entry that a lot of our PSOs will want to apply for. They have a very good understanding of the work and what it entails, as well as what we need to do to support people to be in a very difficult, stressful environment. Our probation staff are absolutely outstanding. They are the definition of public servants. They have done a brilliant job with all the context I just talked about over the last 10 years. Our retention is improving, but there is more to do.

Thank you.

Thank you very much. Unless there are any final points, I am going to bring proceedings to a close. That is quite a good note to end on. Inevitably, a lot of the questions have been negative and pointing out things that we are concerned about, but can we add to what you have said about the quality of staff and the dedication of staff in the probation service, the Prison Service, the Courts Service and elsewhere? Thank you very much and thank you for attending another Committee. I hope you have had enough for—

I look forward to the next one.

There we are. You probably have one or two other things to get on with between your Committee hearings. Thank you very much indeed for today. Thank you to the members of the Committee.