Speaker by Various Artists

The fines that Sam Lotu-Iiga has talked about aren’t fines, they’re just not paying them their performance bonuses. Bonuses which make up 10% of the contract. The other 90% is, contractually, untouchable.

It's really hard to believe a contract would have been written to protect the other 90% for Serco if Serco's been outright lying in the reports it was required to provide, though Serco lobbyists probably had a large hand in writing that contract.

Nevertheless given its repeated experiences overseas it's hard to imaging that Serco every anticipated the bonuses as being anything except, well, bonuses if it were able to swindle the government for long enough to keep them.

Does anyone happen to know if there were any other significant bids for running prisons at the time when the government was looking to start privatising their management and operations?

"Yes, they’re expecting $30,000,000 a year in profit from South Auckland Wiri prison"

I think that's revenue not profit.

The disappointing thing about the performance of Serco is that it is all too similar to the work of the Department of Corrections. They were supposed to be better.

The disappointing thing about the performance of Serco is that it is all too similar to the work of the Department of Corrections. They were supposed to be better.

Better than what? The overhyping of Serco was all about the private sector doing it better.

Like the private sector provides better disability care.

And pending, better child protection services.

And better social housing provision.

Claiming Serco Is "all too similar" to Corrections is an attempt to put lipstick on the privatisation pig. For all its shortcomings, right now Corrections is proving demonstrably better at running a remand facility.

The disappointing thing about the performance of Serco is that it is all too similar to the work of the Department of Corrections. They were supposed to be better.

Wasn't the model of contracts and incentives supposed to, via common sense and magical laws of the universe, ensure that they were better?

I get that you're just being cute, but the point for the model isn't that Serco sucked, it's that the model didn't work as advertised. It would be good to see some serious grappling, from the model's fans, with the 'whys' of that beyond 'Oh just Serco actually'.

Hit the wrong reply button there, soz. Should have been at 'Tinakori'.

The disappointing thing about the performance of Serco is that it is all too similar to the work of the Department of Corrections. They were supposed to be better.

I discussed this with a friend who worked (for a third party organisation) in Mt Eden Corrections Facility and he was of the view that Corrections, while clearly not perfect, did have a better handle on the place than Serco.

He said that Serco's staff did not have the respect of prisoners, which meant small problems escalated far more often. Experienced Corrections staff were more likely to identify and deal with problem situations at a human level, while Serco relied on its systems. These systems – such as the centralised, permission-based door access system – frequently got in the way of establishing order and protecting the vulnerable. "At The Rock (the old Mt Eden jail) every guard has a key," he said.

It also seems pretty clear that Serco is incentivised to under-report problems.

As someone I read recently put it, Serco are incentivised to reduce costs. If we really wanted private enterprise to do things well, incentivise them around the recidivism rate and see what happens...

incentivise them around the recidivism rate

and, for that matter, the "prisoners leaving jail intact" rate.

"Yes, they’re expecting $30,000,000 a year in profit from South Auckland Wiri prison" ... I think that's revenue not profit.

I thought revenue was gross turnover, profit was what they kept after expenses. So 10% profit seems reasonable (in the sense that "high profits from bilking the taxpayer is reasonable" sense that Serco and their ilk use the term).

I agree with Mark - the incentives set up are all wrong, and should focus on the outcomes we want. Apparently what we've asked for is "cheap and shoddy", when we should be aiming for, say, respecting the human rights of inmates and staff while reducing the recidivism rate. The whole point of profit-oriented companies doing this is that if we don't ask for it, we don't get it. Hence the need to say "prisoners must be fed" and the obvious problems with not saying "prisoners must not be made to fight each other for the amusement of staff".

It chops,! It dices! It reams!
But wait, there's more!

Didn't I also hear Serco's top man say he was here to look at buying state houses and even a new train set...

I really don't think the problem is Serco, despite their awfulness. The problem is a for-profit prison system.

I'd also worry about 'incentives' based on things like the recidivism rate -- they wouldn't improve recidivism the hard, expensive and uncertain way, with counselling and education etc... they'd use the easier method of ensuring the most difficult/likely recidivist prisoners stay locked up, or find ways to shuffle them into other facilities. Or perhaps by making prisons dramatically more horrible, but I don't think that's what most of us actually want.

It has all the same problems as privatised teaching; it's such a complex institution that there are no standards that won't create perverse incentives. So we rely on good faith, instead... and I have more faith in a public servant, accountable to the public, than in a company working to financial incentives.

However long ago it was that the private operator deal was announced, I said (and now cannot find) on Facebook that the only way a private operator can make money by doing the state's job on the basis of costing less is by doing it cheaper. Which means fewer staff, less training and rehabilitation of prisoners, and all the other stereotypical exercises in cost-cutting that we see in Dilbert and elsewhere. Lo, it has come to pass, so freakily close to what I predicted that more than one of my friends recalled my prophesy as though it was something that could never have been foreseen by a mere mortal.

A good friend's OH is a prison officer a MECF, and the comments she passed on about the working conditions are scary. Officers routinely working double shifts, spending 12-14 hours a day on the floor six days a week, so tired that they are seriously impaired cognitively. That's what happens when staff are your biggest OpCost and you have to find a way to make money out of the same budget as the state operator that is doing the same job. There's no fat in the food budget - which is already too lean, really - and that doesn't leave too many other places to trim.

Now surely it is merely coincidence that this guy....

http://www.stuff.co.nz/national/politics/4376127/Ray-Smith-new-corrections-boss

was formerly in charge of the dysfunctional organisation that, according to this guy...

http://www.radionz.co.nz/news/national/282623/'staggering-link'-between-cyf-care-and-crime

Hmmm...

Yes you did.... it amazed me that SERCO's CEO
was so candid about that. How this government can possibly be thinking of doing more business with these guys completely astounds me. And yet that's what he claims to be here to talk about. Great Scoop on The Nation.

Great Scoop on The Nation.

Heck, a simple Parliamentary subscription to Private Eye could have saved this country millions!
;- )

I sometimes wonder if the Serco thing is more than just misplaced ideological faith. Is someone in a high-up position of authority pocketing big from all this? In other words, something nearly approaching Mark Ciavarella of kids-for-cash infamy.

Actually I had heard of Serco long before this - back in the 1980s a friend of a friend worked for them. My wife and I just assumed they were a local cleaning contractor in Palmerston North!

The impossible has happened… Serco has been sacked.

Private prison operator Serco’s contract to run the troubled Mt Eden Corrections Facility will not be renewed.

The company’s contract is up for review, and Corrections chief executive Ray Smith has recommended that it should not be extended beyond next year.

The Herald understands that the Cabinet has now approved Mr Smith’s recommendation.

Serco executives were informed of the decision last night, and staff at the Mt Eden prison are being told this afternoon.

The British stock exchange, where Serco is listed, has also been notified. It shares had already slumped earlier this week because of news of other lost contracts.

Cheap, poor quality incarceration isn’t the business it once was.

However Serco will continue to run the Wiri prison because somebody in government gave them a 25 year contract. No heads are expected to roll.