Power to make arrangements for the provision of probation services

I beg to move amendmentNo. 11, in clause 3, page 3, line 11, leave out ‘The Secretary of State’ and insert

‘Probation Boards and Probation Trusts.’.

With this it will be convenient to take the following: amendments:

No. 12, in clause 3, page 3, line 25, at end insert—

‘( ) Arrangements under subsection (2) shall not apply in respect of functions specified in section 1(1)(a), 1(2)(a) and 1(2)(c).’.

No. 25, in clause 3, page 3, line 35, at end add—

‘(6) In carrying out their functions under this Part, and in particular in providing any assistance to courts and to the Parole Board, providers of probation services and their officers shall ensure that such assistance does not give rise to any conflict of interest between their obligation to give such advice impartially and the financial interest of the provider.’.

First, may I put on record the apologies of my hon. and learned Friend the Member for Harborough, who unfortunately cannot be with us today? As you have said, Mr. Bayley, the proceedings in Committee have involved some theatre so far. We now move on to something that is certainly not theatre, but is one of the key aspects of the Bill and the way in which it is intended to operate and function. It is the concept of contestability or, as others have variously put it, competition, privatisation or the greater involvement of non-state providers in the provision of probation services.

With your permission, Mr. Bayley, I should like to have a fairly wide-ranging debate on this amendment in the knowledge that it may impact on our ability to have a stand part debate later on. It is probably appropriate to put these issues on record now in the context of the amendments, as I hope that it will assist the Committee to highlight the relevant issues and matters that pertain to the clause.

This morning, I shall focus on three issues: the lack of robust justification for the model to be adopted pursuant to clause 3; the lack of clarity about the Government’s intended model; and how services would operate in practice as a consequence of that model and of the structure and provisions of the clause.

I turn first to the way in which the Government have sought to justify their approach. In the now infamous speech to a captive audience at Wormwood Scrubs on7 November, the Home Secretary exhorted the probation service to

“Never forget that your job is to protect the public and what the public wants is outcomes: less crime, safer streets, not an outdated ideological debate about inputs and who delivers them.”

There is some irony in that, because a debate about ideological input is precisely what the Government seem to want to provoke, particularly on their own side. If the Home Secretary was trying to say that we need to examine all appropriate models for achieving improved safety, reduced reoffending and greater rehabilitation by sharing responsibility with a range of partners and players, then, as we have said consistently, we welcome his conversion to our way of thinking. The problem is that the Home Secretary is hung up on who delivers the inputs. From our reading of clause 3, it is clear that he wants to be that person.

There is little doubt about the top-down, centralist model that cedes control to the Home Office rather than devolving authority to the local level, where more tailored solutions could be provided. Clause 3 provides a system under which contracts will be awarded centrally by the Home Secretary or, at best, through the regional offender managers. The Coalition on Social and Criminal Justice, which brings together organisations from the public and voluntary sectors involved in reducing crime and protecting the public, has said that

“The current commissioning and contestability model proposed for NOMS affords a major role to the regional level, with ten regional managers responsible for commissioning services for offenders in prison and the community. A wholly regional approach to commissioning would run counter to the aim shared by Government and the coalition of strengthening multi-agency partnership working via local area agreements and LSPs. There is a significant risk that a commissioning system involving only regional commissioning via the regional offender managers may not be sensitive enough to the specific needs of the localities...It would be a perverse outcome if NOMS replaced the current patchwork of voluntary local engagement and partnership with a top-down, albeit regional, system.”

The coalition certainly has concerns about the proposed structure against a backdrop of general acceptance that services are best provided locally, closer to offenders’ families, where they are most likely to be successful. One of the issues that came out in the evidence that we received at the informal session, which I hope we will be able to share formally with the Committee in due course, was that having offenders close to the community, monitored in the community, supported by the community and with their networks, families and other aspects of rehabilitation within the community setting improves the likelihood that outcomes will be positive.

So what are the Government trying to do? The best that I can come up with is the following, which the Home Secretary said on Second Reading:

“I agree that much of such work is better commissioned locally, but that is not the question. The question is whether it should be provided only by a local monopoly. We are creating the circumstances whereby it can be commissioned locally, but its commissioning will not automatically depend on an existing local monopoly, which will both commission and provide the service that the commissioners are commissioning. We are opening it up. In some cases, it will not be provided locally; it will be provided in a larger area. However, for the foreseeable future—for the next several years—the specific management of offenders, particularly serious ones, as opposed to intervention to provide educational programmes, will be done by the probation service.”—[Official Report, 11 December 2006; Vol. 454, c. 589.]

The Minister has chipped in and said, “Very, very clear,” but I wish that I could agree with that reading of the quote. My reading is that it is not about local commissioning; it is about local monopolies and local  services, but some services will not be local. It is about change, but there will not be any change in a number of areas.

Last week, the Minister criticised me for asking for more details, but against the backdrop of the Home Secretary’s comments, it is entirely reasonable for the Committee to ask for further detail. Although I am sure that he was quite clear about what he was trying to say on Second Reading, I suspect that members of the Committee and many other people may be confused and unclear as to his precise intentions. I hope that we will be able to shed some light on them, if not achieve agreement, during the course of this debate.

We will analyse the detail of the clause shortly, but it is hard to detect any clarity of vision on how the outcomes will be improved by the clause. Many questions need to be answered, and I hope that the Minister will answer them in his response. How have the Government arrived at this model as against any other model that they may have considered? It is clear that they could have explored an arrangement within the existing construct to try to promote competition and involve the voluntary sector to a greater degree. They have decided that the current model does not work for some reason, even though they introduced it as recently as 2001. It would be helpful for the Minister to explain why he feels that the existing model is flawed.

When I analyse the apparent structure, at least as it been explained in isolation from the Bill, I see some striking similarities to the structure that is used in the health service, in which services at the local level are commissioned by primary care trusts, which are directed and controlled at the regional level by strategic health authorities, which in turn follow the targets, policies and diktats of the Department of Health. Given the parlous state of NHS finances and the pressure that that is causing, I hope that my understanding of how the model is intended to operate is incorrect. If I have correctly understood and explained the situation, it is a strange model to have chosen.

It is interesting that the Government decided on the model proposed in this Bill and did not seek to change the existing model, which was adopted only six years ago, even though there is a need to put a greater emphasis on partnership. Will the Minister explain why the greater partnership option has not been adopted? On Second Reading, various hon. Members mentioned the Scottish model. As the Minister knows, it involves the adoption of new community justice authorities, bringing together local authorities, probation organisations, the Prison Service and key partners in the voluntary sector to reduce reoffending, with the target of a 2 per cent. reduction by March 2008. The structure is in its infancy, with operations due to be launched in April, so it would be premature to reach any conclusions on its operation.

It is interesting to note that the Government have dismissed the Scottish model completely—that is how I have taken their comments—without explaining why they believe it to be flawed or why the model in the Bill  will better advance the issues that they have said underpin the Bill. On Second Reading, the Home Secretary said:

“On the Scottish model, first, I have no vote in what the Scots decide. Secondly, from time immemorial, the Scots have had a completely different legal system, based on Roman law rather than case precedent. Thirdly, I do not always agree that the Scottish Executive choose the best way even for Scottish conditions.”—[Official Report, 11 December 2006; Vol. 454,c. 587.]

We are celebrating 300 years of the Union today, but my reading of what the Home Secretary said is that apart from a basic statement that “You are wrong, but I cannot tell you that you are wrong,” the only substantive point that he made was the distinction between Roman law and binding precedent. That does not seem to be closely linked to probation, the monitoring of offenders and making communities safer. While it might be an interesting and arcane legal point, I do not see what it has to do with the issue before us or the differences that make the Home Secretary and, I am sure, the Minister, believe that the Scottish model is inappropriate.

In our attempt to understand the Government’s approach, it would be helpful to have more detail on why the Scottish model, which relies on partnership arrangements, is not perceived as appropriate for England and Wales and why the model set out in the Bill is believed to be so much better. The Home Secretary might be right in his dismissive approach to the model, but it is appropriate and reasonable for the Committee to ask what models the Government have considered other than the one set out in the clause, and why that one was felt to be the best.

I am grateful to the hon. Gentleman for giving way, because I do not wish to stop his flow. I will go into detail about the Scottish model in my response, but is he saying that he is in favour of it? It does not allow for commissioning, so I am not sure whether he supports commissioning.

As I said on Second Reading, I am certainly in favour of the greater involvement of the voluntary and other sectors in the provision of services. I raise the issue so that we can understand why the Home Office and the Government have dismissedthe Scottish model, and the Minister might well wish to explain that in his response. It is important that we should raise the matter in trying to understand the Government’s thought process on how the arrangement in the Bill was reached. The Committee needs to understand why the Scottish model, which is intended to deliver a 2 per cent. reduction in reoffending, is considered inappropriate. We want to put our concern about that issue on record and to debate it this morning.

Clause 3 deals with the commissioning and the provision of services. It appears to offer a number of different models for the provision of probation services, which the Home Secretary can adopt at his discretion. The models are, first, that he will make provision for probation directly, by himself or through his staff and other officers, by virtue of subsection (4); secondly, that he will contract services directly with one named party; thirdly, that he will contract a named  party to provide services, and that party would then commission its own services through subcontracting arrangements; and fourthly, that he will arrange for services to be provided by another person in an unspecified way, other than by way of contract, as outlined in subsection (2).

In other words, clause 3 gives the Home Secretary complete discretion to use any way that he decides, which seems extremely wide-ranging. In Committee last week, it was noted that Parliament has been concerned about allowing powers in a Bill that are so broad and wide that it is difficult to see from the Bill where they end and what direction will be taken. Those issues are not clearly addressed in the clause. There are questions that need to be carefully considered about whether the wide-ranging rights that the Secretary of State will have are appropriate and whether there should be more structure in the Bill, including restrictions on how the Home Secretary can operate.

For example, the Home Secretary could choose one single option for all probation services, or he could go for a mix-and-match option. Despite the description of how service provision is envisaged, he has wide-ranging discretion, and service provision could be changed fundamentally without reference to Parliament. There are questions about the accountability of Ministers in connection with the provision of such services, and I would be grateful if the Minister were to explain how those questions will be addressed. I know that this issue was raised on Second Reading, when the Home Secretary gave a fairly clear assurance that this measure is not intended in any way to be a means of obfuscation or of avoiding liability, questioning or accountability. It is important for us to explore this area further to determine how the Government intend to ensure that that type of protection is provided.

At Wormwood Scrubs, the Home Secretary, when discussing the current levels of service provision that are contracted out, said that such services will go further and compete a much larger proportion of probation service work. He said:

“But I want to go further. So from April 2008, once we have passed the necessary legislation we will compete services with an annual value of up to £250m — on a compulsory basis if necessary.”

Now, £250 million is quite a specific figure forthe contract value that is envisaged. Therefore, the Minister must have a good idea of the nature of the services that would be “competed”, to use the Home Secretary’s term. I hope that the Minister can share with the Committee the nature of these competed services, and the mechanism by which they would be competed.

The fundamental problem with the arrangement envisaged in clause 3 is that it would be top-down, which is why we have sought to clip the Home Secretary’s wings by tabling amendment No. 21, which states that contracts should be given at the local level, rather than being given out centrally.

The hon. Gentleman meant amendment No. 11 when he said amendment No. 21. In tabling the amendment, are Her Majesty’s official Opposition rejecting wholesale the structure proposed by the Government, or are they putting down a marker for there to be flexibility to  commission services locally? If the latter, does subsection (3)(c) not already provide the flexibility that they seek?

Subsection (3)(c) does not provide the flexibility highlighted by the hon. Gentleman, because the whole concept is for contracts to be provided from the centre, which seems to undermine the whole purpose. I have already used the quote from the Coalition on Social and Criminal Justice, which states that commissioning was likely to come “at best” from the regions rather than from the local level. I do not agree with the hon. Gentleman’s analysis.

We have fundamental issues with clause 3 in its entirety, mainly because of the vagueness and uncertainty that I alluded to this morning. We have tabled the amendment because of a shared understanding that it is best to provide contracts at the local level. However, I will wait to see how the Minister responds to the debate and to the amendments before drawing my conclusions.

The Government need to explain more clearly why the proposed contractual structure will not be more costly and bureaucratic and what the glue is that holds the service together in a co-ordinated way. Merely relying on a contractual construct with a nexus of enforceable contractual liabilities, but without a pivot around which the service operates, would risk significant problems in how high quality services will be delivered, measured and maintained. It is important for the Minister to give the Committee, to the extent that he is able, greater clarity on how sustainability will be delivered and maintained within the provisions of clause 3. The Home Secretary appears to be talking about moving to a dynamic and fluid situation of contracting, which raises a whole host of issues about what that might mean.

Subsection (3)(a) concerns co-operation with various parties, and the question is how that will be enforced. How will potentially competing parties be obliged to share information? In that more dynamic situation,it is reasonable to assume that competing parties may not necessarily be too willing to share information, which they may regard as commercially sensitive, as compared with “sensitive” in the context of the running of the probation service. Shedding some light on dealing with such a situation would be beneficial, and there are also the associated cost concepts.

Subsection (3)(a) talks about the requirement to co-operate with

“other providers of probation services or persons who are concerned with the prevention or reduction of crime or with giving assistance to the victims of crime”,

which is, quite rightly, a broad and wide-ranging duty for how services would be provided and for ensuring a joined-up approach. If we look at how contracts are drawn up, we have seen the Government become the victim in the context of computer contracts. Getting the definitions, the standard and type of service and what is envisaged right is extremely difficult, particularly in a dynamic situation of change, where a person might need to liaise with multiple parties. It is not unreasonable to suggest that it may be difficult to draft such provisions appropriately.

What risk does the Minister think there is of contracting parties renegotiating, on the basis that the services that they were expecting to provide have been changed or extended because of a dynamic situation? That is a crucial aspect of how a contractual service would function.

I follow the hon. Gentleman’s logic in respect of future contractual arrangements, but his point also applies to the probation boards’ existing contracts, in which the same difficulties arise.

The distinction is that at present the probation boards act as an anchor or focal point, a sort of glue, to use an analogy. As I understand it, the clause is moving towards a more dynamic contractual situation, in which there is no certainty that a probation trust, if established, will remain in existence. The contracts could ebb and flow around the system. The point is writ much larger in this context because of the proposal continually to change any existing arrangements. That would become more of an issue if the model were to be adopted.

On the continuity of service, what would happen if a company or other provider went bust or became insolvent? Although there are provisions in the schedules for the transfer of property and employees, that deals only with one aspect of what could be a very difficult problem. The most direct parallel is the rail industry, which has a complicated network of contracts. There is a concept of rail administration, which contains various provisions to deal with situations in which a company or provider gets into financial or other difficulties that mean that it can no longer provide the services.

It is important to understand what will happen if things go wrong—if, perhaps due to circumstances that are unconnected with its probation activities, a provider is suddenly unable to continue to provide services. The logic may be that the Secretary of State will step in, but we need to understand what would happen in such circumstances, because there could bea multiplicity of contracts and subcontracts. Those problems need to be considered properly and appropriately to ensure that if a fully contractual model is adopted, continuity is maintained.

Subcontracting is a key aspect of how the construct will work. The Minister indicated that, in respect of the involvement of the voluntary sector, he did not want a panoply of contracts that would be managed by the Secretary of State; he seemed to want to subcontract to a body that would further subcontract to other parties. How would that work in a situation of continual change? Would the services be contracted to just one third party, or could there be fourth and fifth sub-parties? The element of control obviously dissipates the further the subcontracting goes.

The Bill refers to third parties, but that could be read in different ways. Does it mean a specific third party, or does it go further than that? What element of control does the Secretary of State envisage being exercised through a contract or other mechanism to ensure that the delivery of high-quality services at subcontractor, or further subcontractor, level? What happens to the  subcontracts if the head contractor—the main party with whom the Secretary of State has contracted—disappears or if the contract is terminated because the Home Secretary decides that it is not performing adequately?

Small voluntary sector bodies may be involved in providing services through that mechanism, and how the contracts are drawn up could potentially expose them to greater risk. How might they be protected? Is it envisaged in those circumstances that the Home Secretary could novate those subcontracts up to a new provider, or indeed to himself? That is a detailed point, but it is quite crucial in service provision to ensurethat continuity is maintained in ever-changing circumstances.

It is also important to understand what the contract’s intended duration is. If a provider is intending to invest, then a contract needs to be of a suitable length to ensure, from a financial perspective, that it can work. It must be sustainable and it must be attractive to a service provider. Will the Minister help the Committee by setting out what is currently envisaged regarding the awarding of contracts, and in what circumstances he intends to tender? What requirements does he envisage placing on contracting parties in the voluntary sector? We talked at length on Second Reading—we will surely come to it in this debate, too—about the importance of involving the voluntary sector at a local level, to ensure that we have a localised service to improve the outcomes that I already alluded to. Does the Minister envisage the tender process somehow obliging or requiring contracting parties to involve the voluntary sector in providing maintained services?

Will the Home Secretary reserve change of control provisions to cover a takeover situation, whereby ownership of a contracting party may be changed to a person that he subsequently considers to be unsuitable? Would contracts be capable of assignment or novation in these circumstances? Indeed, would they be personal, such that they could not be transferred to another party? Again, it is important to understand the contractual nexus and what the Government intend through this framework that they are setting out.

Another crucial aspect in ensuring both service delivery in which the public is protected and the maintenance of high quality standards is the performance criteria. How will these be set, and what measurements will be put in place to ensure that a particular party performs? How will they be measured, and who will monitor their performance? What sanctions would be imposed for breach? Obviously, the ultimate sanction might be termination or the taking away of a contract, but does the Minister yet envisage financial penalties to ensure that particular contractors, of whatever nature, perform according to the tender and contract documents?

I have raised an extremely important concern about continuity of service and the maintenance of qualified and skilled probation staff. The Home Secretary assured the inmates of Wormwood Scrubs that

“good probation services and probation officers have nothing to fear and everything to gain in this new world”.

Part of that is down to investment in education, training and continued professional development. How will the cost of training, and investment in continuing training, be met? That issue needs to be clearly explained in the context of the Home Secretary’s brave new world and the Bill’s framework. Will that cost be shared in future? Who is to bear it? Is it intended that it should form part of a contracting company’s bid, in that it should feature in what it says in its tender documents about how it will retain highly motivated, qualified and supported staff?

Concerns have also been expressed about the risk of services being cherry picked, in that if the services that are perceived to be low risk or easier to deliver were contracted out, highly qualified and experienced probation officers and other staff might be attracted to those services, where they would be well remunerated. What would the impact of that be on the services that remained within a probation trust or were provided directly by the Secretary of State through some other mechanism?

That type of approach seems to have been envisaged by the Home Secretary in his comments about the maintenance of certain services “within the probation services”, which I quoted earlier. That prompts the question, what did the Home Secretary mean by “probation services” in that context, given the revised construct that we are debating and the fact thatclause 7 envisages the abolition of local probation boards?

The Home Secretary also said that one of the key aims of the reforms is to provide every offender with a seamless package of supervision and support from the start of his sentence to the end, overseen by a single offender manager working off a single case record shared with everybody in the system. That, too, raises the issue of the potential multiplicity of providers. We will come on to probation trusts, which are not, it seems, to be arranged on a geographical basis—a number of them might have to compete with each other.

How will the single system be delivered, how will the end-to-end management be operated in that sort of framework, and what sharing of computer systems and computer records will be necessary? Will compulsory adoption of standard IT packages and systems across the whole of the probation service be required, and how will the individualisation of support be achieved? NAPO has highlighted the fact that there are some parallels with unpaid work and community service. It says:

“Last year 55,430 people were sentenced to Unpaid Work...and they completed 461,000,000 hours of work. Many placements were environmental, decorating and cleaning, including litter removal and graffiti clearance. However, over 35% were individual placements. These placements have involved working in charity shops, working for churches, maintaining gardens for the elderly, supporting adults with learning difficulties, working in day centres for the elderly and for the homeless, working in a wildlife centre, working at a lifelong learning centre, working at a retreat for disadvantaged children and working with Oxfam.”

I use that quote because it highlights clearly the different types of community service that might be provided and the fact that 35 per cent. of placements were individualised. The Home Secretary talks about trying to provide an individualised service, but that  might be difficult to achieve in practice. Certainly NAPO has expressed concerns about the risk that individualisation might be watered down; the fact that the Criminal Justice Act 2003 increased the minimum group size to six, which might militate against an individualised service; the need to ensure that offenders are re-educated so that they stand as good a chance as they can of getting jobs, getting back into the community and stopping reoffending; and the need to provide the facilities for all those things to be achieved. Does the Minister agree with those concerns? What measures are intended to ensure that the standard of provision on matters such as community service is maintained?

The issue of potential conflicts of interest also needs to be examined and addressed, which is why we have tabled amendments Nos. 12 and 25. Concerns have been expressed about the same party being responsible for the provision of services and the writing of reports, because it might be encouraged to support its own services and generate business in that way. We need to address that important issue head on to ensure that justice is seen to be done and that there is integrity within the service. In the interests of justice and the confidence of the system as a whole, it is important to put that in the Bill.

Three more agencies spring to mind, the first of which is the Prison Service. Subsection (4) states that the Home Secretary has the power to provide services and envisages that prison officers and prison employees may be involved in carrying out those services. The explanatory notes state:

“In most cases, it is anticipated that the Secretary of State will make arrangements with others to deliver probation services but this makes it possible for prison staff, for example, to deliver probation services in the community. This could be helpful in terms of bridging the gap between custody and the community.”

The question that obviously arises is what role is envisaged. Is it envisaged that there will be an increasing role for the Prison Service in probation, rather than the other way around?

Could be.

If the Minister is saying that it is basically a free-for-all, it is an interesting comment about the discretion that is being allowed. It is that sort of detail that is appropriate.

I have been listening to the hon. Gentleman with great interest, and I hope to respond to all of his points. It is not a free-for-all. The objective is to cut reoffending rates, to protect the public and to make sure that we have a system that works. We do not want to stifle innovation. When I say that it could be, it depends on what is put to the commission as the best way to achieve the objective of reducing reoffending.

That is an interesting indication of the mindset. The Minister has suggested thatthe commissioners, whoever they may be, could commission services directly with the Prison Service itself. I would be interested to know what discussions   he has had with the Prison Governors Associationand the Prison Officers Association. He seems to be envisaging a step change in the manner in which the services are provided. In fact, all probation services could ultimately be provided by the Prison Service, if that is the fluid environment that he seems to be talking about.

I do not want to concentrate too much on that. I just give it as an example of what innovation could come forward. I certainly have no plans for the Prison Service to take on all the probation work. We want the Bill to enable thinking outside the existing boxes and to tackle the important issues of reoffending rates and the better management of offenders in our communities.

I certainly hear what the Minister has said about the desire that underpins the provision, but there is a huge amount of uncertainty for the probation service, its employees and officers as to what the future might hold for their work of ensuring that the public are protected. The last thing that anyone wants to see is qualified probation officers and staff leaving the service because they do not know where it is going or whether they will get the necessary back-up and support. It is essential for morale that we maintain the continuity of service and do not lose experienced people. It would be damaging to the provision of services and to the attempt to rehabilitate people and cut reoffending if we were suddenly to lose a lot of qualified staff because of a lack of clarity and certainty.

I note what the Minister has said about looking outside the box and thinking outwards. However, the Home Office does not seem to know where it is going and does not have a sense of purpose or direction in telling outside bodies what the changes might mean. It is interesting that the Minister does not seem to have a problem with that, but I will let him respond to the point and provide what clarity he can—we will listen intently.

I recently visited Belmarsh prison. Nobody in the Committee will be surprised to learn that I was struck by the need to focus on basic skills and the employability of offenders. One of the fundamental causes of crime and reoffending is the fact that offenders drop out of the system and cannot find employment and get their lives back together. The failure to provide basic numeracy and literacy skills, and the social exclusion that that creates, must be addressed. Steps must be put in place to ensure that we cut reoffending and, ultimately, cut crime and make our communities safer places.

I was interested to note that Belmarsh has a relationship with a local college to ensure that training is provided within the prison environment to give prisoners basic or vocational skills to help them back into work and prevent them from reoffending. It was explained to me that the help continues afterwards—the link is maintained once an offender leaves prison, which is an important model and provides consistency in rehabilitation.

That highlights the role of the learning and skills councils, which commission various services for the probation system and prisoners. What flexibility will   the National Offender Management Service and the learning and skills councils have jointly to commission end-to-end management in attempting to cut reoffending and to rehabilitate offenders? The Home Secretary said in his comments on the contracting arrangement that educational provision is key. I know that the Minister and the Home Office have criticised the probation service for the lack of involvement with outside bodies and of commissioning voluntary organisations, but a lot of contracts are given to outside bodies, particularly those for educational services through the learning and skills councils. It would be beneficial if we could understand how the councils have been factored into the revised construct in the key matters of education, basic skills, basic vocational training and cutting reoffending.

The final agency that I will mention is local government itself. How is it intended to fit in? How will the arrangements in the Bill fit in with, for example, crime and disorder reduction partnerships or local area agreements? The Local Government Association has made a relevant point in its briefing on the Bill. It believes that a local approach offers the best prospect of improved offender management. Any new arrangements must be locally accountable and properly integrated into local area agreements and local strategic partnerships. LAAs need to be developed in particular as the primary means of achieving joined-up working across agencies within and beyond the criminal justice system. On the basis of the bare framework in the clause, it is difficult to understand how that might be achieved.

A number of organisations have raised concerns about how everything will join up given the problems with contracting. Such problems could be addressedin a suitable system, but how would they fit in withthe local government arrangements and local area agreements? The Prison Reform Trust has made a similar point:

“There is considerable scope to amend the Bill to allow for the increased involvement of local councils and an expansion of their responsibilities. Local area agreements could be used to develop preventive work and community solutions to crime, on the one hand, and to resettle ex-prisoners in the community on the other. Locally accountable chief officers and strengthened Probation Boards will also provide a sound basis for closer links between Probation and the courts. Such a link is essential in building the trust and understanding necessary to win the confidence of magistrates and judges in the delivery of community sentences.”

That point relates to the structure that has been adopted.

In many other aspects of criminal justice, the Home Office has set a great deal of store by local area agreements and the delivery through local government of local services. I am sure that we will hear more of that in the next week with the relaunch of the respect agenda and further proposals that may result from it. We are closely considering the involvement of local bodies and local government as we develop our ideas on the delivery of services and local accountability, which would allow a local community to hold people to account.

The top-down approach to contracting, with the Home Secretary at the top, militates against the delivery of services at the local level, local  commissioning and local accountability. That underpins the comments from the LGA and the Prison Reform Trust and re-emphasises the need for local service provision. We are not getting that through this clause, which is the central point behind our lead amendment. We still have significant concerns about what the clause will mean for the delivery of services, cutting crime and reoffending and the protection of the public.

Having listened to the hon. Gentleman’s remarks, and bearing in mind that the amendments are broad, I expect that we will do without a clause stand part debate, unless I hear in any further contributions the suggestion that there are matters that ought to be raised that do not fall within the scope of the amendments. If I do not hear such suggestions, I will move to clause stand part on a formal basis.

This clause is, in many ways, the key clause in the Bill, because subsections (2) and (3) allow competition in and privatisation of any part of the probation service. I am not suggesting that the intention is to privatise the whole probation service, but fundamentally that is what subsections (2) and (3) allow. As the Minister knows, those provisions have caused concern to a considerable number of Government Members. This was evident on Second Reading, and I am sure it will be evident again when we get to the later stages ofthis Bill.

I have listened to the hon. Member for Hornchurch speaking for the Opposition and I am still not entirely clear what he is proposing. He seems to be arguing that we should throw away the Bill completely yet he still seems to be in favour of a contractual model, provided that the contracting is done at a local rather than a national level. I am not necessarily convinced of that either. If one moves to a model that is fully contractually based, it does not seem to me to make a great deal of difference whether that is done at a local or national level.

Before my hon. Friend goes on to the substance of his speech, I want to reflect on what was said on Second Reading about what the hon. and learned Member for Harborough said when he addressed the conference of the National Association of Probation Officers. He gave the impression that the Opposition were going to oppose the Bill and the spirit of the Bill. It might help the Committee if that point were now reiterated.

It is certainly my impression that the hon. Member for Hornchurch was arguing that contracts should happen at local level rather than at national or regional level. When I look at other aspects of public service that have gone down that road— where trusts operate contracts for services at a local level—I cannot say that that encourages me to believe that this is the road we should be going down for probation. When we have had such a model for other  services, that has not led to a great degree of accountability. In fact, I think exactly the opposite is the case.

Parts of this clause do not seem to cause any difficulty. There is the requirement, for example, on co-operation with other providers of probation services. References have been made already to the Scottish model where co-operation is at the centre of the structure. The Minister may well say to us later that he does not believe the Scottish model will translate perfectly into an English context because we have to deal with a different criminal justice system. I suspect that that may well be true; we cannot simply transplant the Scottish model across. What is at the heart of the Scottish model is a co-operative structure rather than a contracting structure. That concept could be translated across, whether we take the model as a whole or not.

There has been much discussion around the Bill, as there was on Second Reading, about the involvement of the voluntary sector. Some of that discussion has been rather misleading. It has been presented as if those of us who are unhappy with the contracting arrangements are somehow opposed to the involvement of the voluntary sector when that is simply not the case. We know that there are good examples, some of which were quoted on the Second Reading, of work that is being done now by the voluntary sector. This includes work that is done in education and skills training, the provision of accommodation, work to deal with alcohol and drug problems and voluntary mentoring—a whole string of services are provided through voluntary sector agencies.

Unpaid work is organised and supervised by the probation service but the main sources of that unpaid work are the voluntary sector and local authorities. That is where much of that work takes place. I am worried about private sector involvement because there is a considerable danger that if private companies were involved in dealing with unpaid work and it were not based in the voluntary sector, it would become a source of cheap labour substituting for what should be properly paid work.

It has been suggested that in recent years the probation boards have been backing away from dealing with the voluntary sector and cutting the amount that they spend. If one simply considers the budget of the probation boards, that is true, but it is very misleading. What has actually happened is that money that used to go through the probation boards for accommodation, learning and skills and drug rehabilitation has been top-sliced from the budgets. Other parts of the budget—property management and IT, for example—have been centralised at Home Office level, rather than going through the local probation boards. To conclude that the boards have been backing away from involvement with the voluntary sector simply as a result of looking at their budgets is very misleading. At present, the figures are transparent and it worries me that that transparency would be lost if there were private sector involvement.

It is very difficult to get to the bottom of what goes on in private prisons and to know what the costs are, as the spending is not transparent. If one asks the Home Office about the contract prices charged by the private sector companies running prisons, the answer is usually that the figures cannot be disclosed because they are  matters of commercial confidentiality. I do not want that lack of transparency to spread to the probation service.

Amendment No. 18 refers to race equality and we can learn lessons by considering what has been happening on that issue in the private sector of the prison service. The annual report of Her Majesty’s chief inspector of prisons a couple of years ago expressed as a general matter of concern that privately managed prisons were well behind public sector prisons in establishing effective systems to grapple with issues of race and diversity. The amendment is important, because on the evidence of what has happened in the prison service, there would be increasing concern about the issue if there was more private sector involvement in probation.

The argument for major alterations to a structure that has existed only since 2001 when the national probation service was set up is that they are necessary to improve performance and to reduce reoffending; but there is no clear evidence that the structural changes are necessary to achieve those aims. The Home Office performance reports on the probation service in the last year or two have said that the probation service is performing pretty well—not perfectly, but one would not expect that. Achieving targets in this area is always going to be extremely difficult. Probation officers have to deal with very difficult and, in some cases, very dangerous people. They are not easy to deal with or to make decisions about. I would not like to have the responsibility of doing the job, with the possibility that my name might be all over the national press if I made an error of judgment in an individual case, but that is what we are asking probation officers to do every single day of the week. However, there are a set of performance measures and the last report on good enforcement measures said that 91 per cent. were enforced within 10 working days in accordance with the national standards. Compliance targets were being reached, and the proportion of appointments that the offender attends was being measured. In the analysis of high-risk cases, the target was to complete 90 per cent. of harm analyses and risk management plans; that was being exceeded between April and September 2006, the last period for which we have figures. For unpaid work, the number of completions was 6 per cent. over the target. There is also measurement for drug treatment and testing orders, and one can go on through the report and quote a stream of statistics showing that the service is achieving the targets set.

One of the targets that is not there is reoffending. There has not been a target specifically set on reoffending, although a lot has been said about reoffending rates. Who is responsible for reoffending rates is a complicated issue. It is not simply the probation service that does what has to be done over what is happening on reoffending. The probation service does not deal with every single person who has been in and out of prison. Many other people and agencies are involved in trying to deal with reoffending.

Despite some of the statistics being bandied around, the reoffending rates for people who have been through the probation service compare very favourably with those for people who the probation service has not dealt with. There was an argument on Second Reading, which I am sure that the Minister will recall, about the  details of the figures—some of the figures quoted as the reoffending rate for people on probation appeared to include people who had reoffended before they came under the supervision of the probation service. That is hardly a fair comparison.

I hesitate to say this, because we might end up with an argument about reoffending rates, butI hope that my hon. Friend is aware that there was and is a dispute between the National Association of Probation Officers and the Department about the figures. A number of meetings have taken place and I hope that they will eventually agree, if possible, on the reoffending rates. The underlying issue is that reoffending rates are still too high, however they are measured.

I know that there is the disagreement about the source of the figures. Nobody is disputing that we need to do more about getting reoffending rates down. The issue is whether structural changes are the way to do it. Are they a necessary part of bringing down reoffending rates? The big question is what is going to be contracted out. If I look at what has happened in the prison service, I see that the easy stuff—the brand-new, newly built prisons, with relatively low-risk offenders—ended up being managed by the private companies. I suspect that things will go that way in the probation service, at least in the early stages, so let us look at some of the work that has to be done through the probation service.

There is the writing of court reports, which are, as intended, there to help courts make decisions, and that needs to be reliable and professional. There is the supervision of people in the community: 130,000 people are now on orders, and the probation service is currently supervising 47,000 people under the multi-agency public protection arrangements, with another 30,000 on orders with conditions that they attend groups such as sex offender treatment and anger management programmes. More than 100 hostels are being operated by the probation service—in a recent case, a private company ran a hostel with rather disastrous results—and there is the enforcement of conditions for people who are on community orders and parole.

I am really not sure where the people or the other organisations are who are supposedly capable of taking over or doing some of that work. Where are the organisations with staff who could write reliable court reports? I suspect the answer is that if private companies thought that they could move into this market, they would not set up and train staff, but poach people from the national probation service. Their offer to people with such experience would be, “Come and work for us. We’ll pay you more. It’ll be better.” That will be the sort of line pitched to those people to get them into employment.

We have seen that happen in other areas of work. I recall when a private company was brought in by my local authority a few years ago to administer part of the local education authority’s work. At the first  meeting I went to with people from that private company—I had to deal with them while running part of the council’s services—they sat there and talked to me and my hon. Friend the Member for Leyton and Wanstead (Harry Cohen) about their extensive experience of working with local authorities. They had been poached from those authorities to go and work in the private sector, and exactly the same sort of thing would happen here.

The private companies would certainly not retrain people or provide them with the opportunity to obtain professional qualifications, unless they were forced to. They would simply rely on the public sector to do all that work before creaming off the benefits. I am simply not convinced that the people or organisations are there to deliver without fundamentally ripping off the public sector.

As far as the voluntary sector is concerned, if we look at what organisations have been saying to us—I am sure that other Committee members will have seen the papers from the YMCA and from the organisation in York called Clinks that supports voluntary organisations working with offenders and their families—then, of course, they want to do more of the sort of work that they have been doing.

The Clinks paper clearly states that there are core areas of probation work that it considers that the state should continue to undertake. In particular, it talks about the writing of court reports and parole board or public protection work with high-risk offenders, and it also mentions the potential conflicts of interest that would arise from private and voluntary sector providers. It states that the voluntary sector must be careful not to become, or to become perceived as, another agent of the state. It believes that if that were to happen, it would lose all that is most distinctive and valuable about its work:

“We do not think that a series of competitions in which voluntary and private organisations are pitted against the probation service is the best model.”

That view is reflected in the comments of the YMCA, which has said that it does not wish to be seen as an alternative provider of public services—it wants to do more of the sort of work that it has been doing for several years—but that the Bill places the sector

“alongside others for services to be merely transferred, neglecting the particular contribution that a voluntary relationship has on preventing reoffending.”

Some of the discussion that took place on Second Reading about the role of the voluntary sector ignored much of what that sector is saying. I do not believe that the contractual model is the route that we should be taking. So far as the amendments are concerned, it would be better if we were dealing with probation boards and probation trusts. I would rather have the probation boards that exist now rather than something at a national level, which amendment No. 11 refers to. However, I do not want to go down that road if all that that would mean is that instead of a national service based on contracting everything out, we have a local service based on contracting everything out. That is not the way to go. I have also touched on the possible conflicts of interest to which amendment No. 25 refers.

If we are not going to retain the national service, and if there is going to be change because the Bill will go ahead in some form or other, we need to consider the   limitations that will be imposed. Probation officers are really scared about what is going to happen to their jobs. They fear that they will soon face the possibility of having to compete with a private or voluntary sector provider for their own jobs. Once that sort of atmosphere starts to develop inside a service, not only is it bad for morale, but it means that people start to leave—they look for alternatives.

In the past few weeks, I had a conversation with somebody whom I have known for a long time. He has worked in the probation service for 25 years, and he told me that he is getting out. One of his reasons for doing so is that he is worried about the direction in which the service appears to be going as a result of the Bill. We cannot afford for that sort of thing to happen, and we need to be able to reassure people about their jobs. I trust the Minister when he says that he does not intend to privatise everything, but that is no guarantee for the future when we have what we have in the Bill. In dealing with this clause, we have to look for something that ensures that people in the probation service feel that their jobs are safe. Yes; we expect them to deliver and nobody should expect that their job will never change, but we should reassure them that they are going to have jobs and that core probation work will be delivered by the public sector. That is the direction in which we must try to go.

I want to make a number of comments about the clause in general as well as about amendments Nos. 11 and 12.

Clause 3 goes to the heart of the debate. It fundamentally changes the relationship between Government and the probation service, and I want to challenge some of the assumptions on which it seems to be based. Before I do so, may I say that there is complete agreement on both sides of the Committee about the need to reduce reoffending rates? I do not want the Minister—I am sure that he will not do this—or anyone else to interpret our concerns as anything other than genuine attempts to achieve that objective. The difference between us is that some of us are not yet convinced that the proposals in the Bill are the right way to achieve that objective. Who knows? I might be persuaded by the end of the debate.

Amendment No. 11 seeks to return the responsibility that the Bill proposes to give to the Secretary of State to probation boards and trusts, which would give them the ability to make contracts or other arrangements to provide probation. In effect, it would formalise the current position of the probation service. We need to let the probation boards or trusts get on with the job in hand, while accepting that improvement is necessary. The Government argue that contestability, by opening up to new providers, will create more effective case management and better-targeted interventions. However, they are relying on the argument that a regionally, not locally, commissioned probationservice knows the needs of individual areas tocreate better-targeted intervention, which seems counterintuitive. Surely a locally run service would be more in tune with the needs of each individual area.

Locally accountable chief officers and strengthened probation boards will also provide a sound basis for closer links between probation and the courts. That link is necessary to win the confidence of magistrates and judges about the effectiveness of community   sentences. Locally commissioned probation services can work closely with the local authority and can use established local strategic partnerships between voluntary groups, local government, and other relevant groups. They can also further develop the local area agreements to allow joined-up working across agencies within and beyond the criminal system. Those links allow the smooth interchange of relevant information that allows the service to decide how, when and if to change existing probation arrangements.

Moving to a nationally planned and regionally commissioned probation service would mean that the ability to tailor the probation service to the individual circumstances and needs of the local area would be lost. It would also create an additional layer of bureaucracy with attached costs. The amendment would let local boards and trusts decide their own level of contracting out, which is a very positive thing, asit will not lead to the total contestability that the Government apparently seek and will not stop co-operation in the way in which I fear. Centralising contestability will cause disruption, whereas localising contracting will not.

By introducing competition into the probation service and creating probation trusts, the Bill will introduce unnecessary disruption into a service which, as other hon. Members have mentioned, was only established in 2000. The Home Office’s own figures show that reoffending rates fell by 2.5 per cent. between 2000 and 2003, which was ahead of expectations and predictions. That fall in reoffending occurred at a time when all the predictors said that reoffending would rise.

As I said at the outset, there are always areas where improvements can be made. We all agree that reoffending rates are too high, but we should be careful not to throw the baby out with the bath water. I want to look at the performance of the probation service against its performance indicators and targets. The performance indicators show that the probation service hit five of its nine targets in 2005-06. Let us look at that performance, which, on the face of it, does not sound too good. However, my contention is that it is better than it seems at first glance. Two of the failed targets relating to the assessment of high risk of harm and prolific offenders were set for the first time that year and were exceeded by April 2006.

The remaining two targets related to drug treatment and testing order requirements for which a target of 4,000 completions had been set and 3,997, or 99 per cent., were achieved, and compliance with supervision, for which a target of 85 per cent. had been set and81 per cent. was achieved. Figures show that enforcement of community penalties has risen from53 per cent. in 2001 to 91 per cent. in 2005.

It is important to note that the professionals involved—the probation organisations including NAPO and the Probation Boards Association—believe that if the clause were enacted as drafted, standards would fall and the quality of supervision would deteriorate. The Minister must address those concerns when he responds to the debate.

We understand that some changes need to be made, but they could be made by encouraging work with the private and voluntary sectors, not through wholesale  change that will possibly result in reoffending increasing, the opposite of what we are keen to achieve. If work is organised through a local probation board or trust it would encourage information sharing, co-ordinate co-operation between all the agencies and improve end-to-end management.

As the hon. Member for Hornchurch said, it isworth examining a system similar to that in Scotland, which rejected the idea of competition and opted for the establishment of a statutory duty for prisons and the probation service to consult each other and the voluntary sector on the provision of offender services. The duty to co-operate has been very successful in England and Wales, for example in the youth offending teams and the multi-agency public protection arrangements for dangerous offenders.

Amendment No. 12 specifies that some probation services such as advice to courts, arranging community sentences and supervising those released from prison on licence, cannot be contracted out. At present, the probation service provides nearly 200,000 reports for the courts, including pre-sentence and fast-track reports, which are normally provided on the day.

If the court report function of the probation service were to be privatised there could be—many would argue that there would be—a clear conflict of interest. The person writing the report may work for a company that runs prisons or administers the electronic tagging scheme. In such instances it could be argued that the writer of a court report had a vested interest in the outcome. That might be challengeable in that it would conflict with article 6 of the European Convention on Human Rights, on the right to a fair trial. In evidence to the Home Affairs Committee, and on other occasions, members of the judiciary have pointed out that such a conflict of interest would not be acceptable, and would preclude them from sitting on probation boards or trusts. I ask the Minister to comment on the issues that I have raised.

I am grateful to the hon. Gentleman for raising these matters, to which I will return in my response. I want to be clear what is the Liberal Democrats’ position. Is the hon. Gentleman saying that there is no role for the private sector in any of this work?

I welcome the Minister’s intervention. No, of course I am not saying that there is no role for the private sector. I paraphrase the Government’s policy on probation: there is a problem, we must do something, this is something, let’s do this. The Liberal Democrats’ analysis of the Bill is that it may indeed have positive parts, which will improve the sum total of the operation, but we are not necessarily convinced about the entirety of it. I merely take issue with certain parts of the Bill, I hope in a constructive way to which the Minister can respond.

The probation board supervises 133,000 persons on order. To create a profit, private sector providers would logically have to reduce the quality of the service by either decreasing the number of staff involved in supervision or increasing the size of the intensive groups that are dealt with by each person. There are also, as hon. Members referred to earlier, 55,430 people  sentenced to unpaid work—community service—at the moment, over 35 per cent. of which are individual placements. The hon. Member for Hornchurch made this point earlier on. One example is work in charity shops. Those placements would almost certainly vanish under privatisation because they are not classed as being cost-effective.

Having addressed some issues specific to the amendments, I conclude by saying that I continue to have concerns over clause 3 in its entirety precisely because I am not yet convinced that it will improve quality or indeed reduce reoffending rates. It seems to me that the Government’s argument for contestability, outlined in the document “Reducing Crime, Changing Lives”, centres around,

“getting the most cost-effective custodial and community sentences, no matter who delivers them.”

It says “the most cost-effective”, not the most appropriate, and that is an important difference.

As evidence for the success of contestability, the Government will cite the four private companies that are already running, I believe, nine of our prisons. When asked whether they have done any research on this matter—in a question by the hon. Member for Stroud (Mr. Drew) to the Minister—they answered that they estimated that the savings would range between 3.5 and 8.5 per cent, in light of what they had already managed to save in prisons. On any interpretation, it seems to me that this is a best guess by Government rather than any comprehensive and conclusive business case.

Although I accept that there is a clear argument for how contestability could increase cost-efficiency, the same is not true of quality. I am trying to make the point that quality of service is every bit as important as the cost-efficiency argument. Based on the non-strategic business case of October 2005, we know that the Government are hoping to save £1.7 billion annually from these changes. That indicates that when deciding to contract out a service, it will be cost and not necessarily quality that will be the absolute priority. As we know, no business case has yet been produced advocating the introduction of market forces into the system and how they would reduce reoffending. It is on that fundamental point that those of us on this side of the Committee are still hoping to receive some reassurance from the Minister when he responds to the debate.

I want to ask the Minister two questions relevant to amendment No. 11. They are both slightly too long to deal with by way of intervention.

Like other Members, I have read and received a large number of representations from a wide range of organisations and individuals. My judgement is that the centre of gravity indicates that there is a part to be played by a national direction of an offender-management service, including probation. There is a role for regional involvement and, crucially, there is a need for local provision and some commissioning of services. At the moment the Bill tells us about a national contracting system; the explanatory notes, not the Bill, tell us about the regional involvement; and the Bill and the explanatory notes are entirely silent about what the local arrangements will eventually look like. It is that local part that everyone is concerned about.

Many of the briefings that lead me to that conclusion about the centre of gravity talk about the need for reference to the local strategic partnership for local governance. They also refer to the new system of local area agreements for the delivery among a range of providers at the local level. I can see that the Minister would instantly reject putting on the face of the Bill references to LSPs and LAAs as being far too specific. They would not be durable and they would exclude other arrangements that would be relevant at some times in some places.

I found useful the publication by the Probation Boards Association, “Five Principles for a Modern Probation Service” because, instead of the words “local area agreement”, it says that

“it is important that probation should increase its involvement with other local agencies, using common targets and shared resources.”

That is a good general statement of what people want by way of local area agreements. On local strategic partnerships, it says:

“Local governance is central to increased democratic involvement and determination.”

That, too, is a good general comment.

Perhaps I can help my hon. Friend, before this point gets lost in my wider response. I refer him to the Local Government Bill, which was introduced on 13 December and is a legislative vehicle for measures proposed in the Department for Communities and Local Government White Paper, “Strong and Prosperous Communities”. It aims to strengthen partnership working by placing a new duty on the local authority and named local partners, including chief constables, police authorities and, more importantly in this context, the providers of probation services, to co-operate with each other in agreeing the relevant targets in the LAA. I shall say more about that later, but that is how the LAA will be involved in the provider role in relation to the probation service.

I am grateful to my hon. Friend. That answers the questions of hon. Members who have asked about a duty to co-operate—it will come under another Bill. However, will he not consider, instead of amendment No. 11, including a reference in clause 3 to a requirement for local probation services to increase their involvement with other local agencies, for example by using common targets and shared resources where appropriate? That is my first question, and I would say the same about local governance.

The second is on the point made by the. Member for Hornchurch, with which I very much sympathise, about the clause giving far too free a hand to the Secretary of State. That echoes our previous debate, but in another form. I accept the generous and kind words that my hon. Friend will say in a moment, and the assurance that he will give us about the reasonableness of the Secretary of State’s actions. However, I still feel that something is missing. I am not a free marketeer, and I do not necessarily swallow the statement in the briefing from the CBI:

“To achieve better services, a clear purchaser-provider split is vital”,

but the briefing does call for

“a full commissioning and market-management strategy”,

which would, it says, give “a timetable for progress” and enable all parties that want to play a part to get ready to play their parts to the full. That echoes our debate last Thursday about the need for a business plan. Does my hon. Friend plan to publish something along the lines of a commissioning and market-management strategy, which would help to reassure people about what the future holds for them, especially given that we have heard about existing probation officers who are worried about their futures? Would he consider it helpful for there to be a reference in the Bill to the need for a strategy that is updated from time to time?

I thank the hon. Members for Hornchurch and for Cheadle and my hon. Friends the Members for Stafford and for Walthamstow for their contributions. They have clearly put a great deal of thought into considering what the Government are trying to do and expressing their concerns. They have asked detailed questions and I shall try to address the issues that they have raised. It is important to set out at the start the context of our discussion on clause 3. I agree that it is fundamental to the direction of the Bill, but I do not accept that it proposes a top-down structure.

It is useful to try to outline the position of each party. The official Opposition agree with the principle of opening up the sector to various providers, but are not happy about the proposed way of doing it and have questions about that. My hon. Friend the Member for Walthamstow, whose stance on such issues I have admired greatly over the years, has no problem. I think that his message is that he sees no role for the private sector in any area of probation work. I am not sure what the position of the hon. Member for Cheadle is, which I suppose is not surprising in the case of the Liberal Democrats. I tried to elicit his views on the involvement of the private sector.

We all agree that the status quo is not good enough in relation to reoffending rates, however we measure them. Something needs to change—that has been the tenor of all the representations that we have received, apart from one. The one organisation that says that the status quo can continue is NAPO, the probation officers’ union. As a former full-time trade union officer myself, I fully respect and understand its position: it wants to protect its members and believes that the change will be detrimental to their opportunities. However, I do not accept the scaremongering about what we are trying to achieve. Our aim is not wholesale privatisation, which was the fear mentioned by my hon. Friend the Member for Walthamstow. It is to ensure that we have the best providers of offender management, whether they come from the voluntary, the private or the public sector.

The Government did not pluck the issue of offender management out of the air. It was carefully considered, which was why in December 2003 we had the Carter report, “Managing Offenders, Reducing Crime”. That is where the recommendation to establish the National Offender Management Service came from, with the intention of introducing end-to-end offender  management, on which we all agree. It also recommended the introduction of commissioning and contestability. We have had almost four years of discussion about where we need to be. I agree with my hon. Friend that it is time that probation officers—when we say “probation officers” we include probation support officers, who have different roles and responsibilities—are given certainty about what the future holds. It is important that we consider the issues that have been raised and give them that certainty.

The Government’s fundamental position is that the probation service does not have to do everything that it does now. In fact, it is not consistently achieving what needs to be achieved across the 42 board areas. That is not an attack on the credibility of probation officers: I, perhaps more than most because of how close I have been to the issue in the past six months, have seen at first hand the tremendous work that probation officers do in the extremely difficult circumstances to which my hon. Friend and others have referred. In some cases, they deal with very difficult people who live troubled lives and are dangerous, from whom the public need to be protected.

The hon. and learned Member for Harborough and the hon. Member for Hornchurch keep mentioning the Home Secretary’s speech at Wormwood Scrubs. They do not believe that that environment was appropriate, but they should put that to one side and examine what my right hon. Friend said in subsequent speeches. Nobody would take issue with the fact that we must move forward and that the probation service should not do everything.

The Minister says that negotiation and consideration have been going on for about the past four years. The most recent changes were brought in only in 2001. The fact that it is now 2007 suggests that it became apparent almost immediately that the 2001 changes were fundamentally defective. How was that situation allowed to arise?

I shall come to that in the course of my comments.

Clause 2 gives the Secretary of State responsibility for ensuring sufficient provision of probation services. Clause 3, as hon. Members have said, sets out how he may go about that. It enables him to make

“contractual or other arrangements with any other person for the making of the probation provision.”

We envisage that, in most cases, the Secretary of State, through the regional commissioners, to whose role I shall return in a moment, will enter into contracts with the probation trusts and providers from the voluntary, charitable and private sectors, as appropriate. There are 42 local boards, each of which is required to make provision for all services in their areas. In future, providers will be able to focus on their strengths and what is expected of them will be clear. The 42 boards are not uniform: there are differences in their performance. I do not believe that the proposed change will lead to the fragmentation that some have predicted.

Subsection (3)(a) expressly enables the Secretary of State to authorise or require providers to co-operate with one another and with other agencies involved in  crime prevention, crime reduction or work with victims. Those expectations will be clearly set out in the contracts and will be one of the criteria against which successful delivery of the contract will be judged.

Paragraph (c) expressly provides for subcontracting on the part of providers. We do not envisage regional commissioners directly holding myriad small contracts. Instead, the commissioners will agree contracts directly with a small number of providers who, in turn, will subcontract aspects of delivery to other providers. The extent to which bidders have established relationships with other providers is likely to be one of the criteria that commissioners will consider when awarding the contracts. We believe that that will help reinforce partnership working and guard against fragmentation, as well as help to safeguard the role of smaller, locally based providers, especially in the voluntary and charitable sectors.

Paragraph (b) simply enables the Secretary of State

“to designate individuals as officers of a provider of probation services”.

We will discuss that further under clause 6.

The Minister opened by claiming that the process is not a top-down process that is being engineered, but I have not heard any argument to substantiate that claim. It certainly cannot be found in clause 3. What is the argument?

If the hon. Gentleman gives me time, hopefully I will get to that point.

Subsection (4) allows for a further option for the provision of probation services: that of the Secretary of State making provision directly through his own staff rather than through contract with other providers. The subsection does not restrict which staff that might be, but makes it clear that what we have in mind is the possible provision of probation services by prison staff, as said earlier. For example, in some circumstances it might make sense for prison staff who are delivering a programme in custody also to deliver the same programme in the community to offenders with similar needs to those in custody. That might enable some offenders to continue after release a programme started in custody, which could be very helpful in supporting the end-to-end management of offenders. The clause sensibly sets out the options for arranging the delivery of probation services.

During the debate, hon. Members made a number of points, and I shall take them in no particular order. Scotland was the first key opportunity that they offered, and we discussed how we could apply the Scottish model across the UK or to England and Wales. The answer given in the debate came as no surprise: there are long-standing differences in the legal position in relation to Scotland and its law. The Scottish system also has a different set of relationships that could not be applied to the UK as a whole. We do not believe that introducing the Scottish system across the UK would succeed in driving up performance.

Will the Minister be more explicit? He says that there is difference in the systems and, obviously, as highlighted, in the law itself.  However, as I said in my speech, once an offender is convicted, under whatever form of law, they are convicted and require rehabilitation services. Would the Minister explain a little more clearly what the further distinctions are?

It is to do with the relationships that exist. There are accountability problems in the Scottish model. The chief officer of the criminal justice authority reports on his own performance to a Minister and it is for the chief officer of the authority to report failure to Ministers. There is no scope for Ministers to look elsewhere for services. The Scottish model is therefore restricted. That route and responsibility, and the cultural differences between Scotland and England and Wales, mean that the Scottish model would not be appropriate for England and Wales. That is not to say that we cannot learn anything. As the hon. Gentleman says, the Scottish model is now coming into effect, so there may be opportunities to observe best practice and the performers that come forward which we can use when trying to achieve our overall target of reducing reoffending and cutting crime.

The hon. Member for Hornchurch asked me why we set up the national probation directorate in 2001 and then made changes so quickly. We believe that was a step change on the journey that we have taken from 2000 on how to give greater clarity to the role and performance of the probation service. The change has brought greater co-ordination in the direction of services and has achieved a great deal. The directorate was not unsuccessful, but we can build on that success now with the new framework that we are introducing, and go further, as we all agree we must if we are to meet our objectives.

The hon. Gentleman asked me about court services and what will be outsourced as a result of this programme. That will depend on the performance and outcome of the tendering processes. The “Improving Prison and Probation Services: Public Value Partnerships” document committed NOMS, once the legislation was in place, to increase competition to provide services, up to an annual value of £250 million. That is not the same as contracting out. What we are clearly saying is that, if the public sector can demonstrate that it is able to deliver the best service, it will win the contract. That is a point that my hon. Friend the Member for Walthamstow keeps coming back to. We are not saying that everything needs to be contracted out; if the public service improves its performance, it will win the contract, on the basis of that improved performance.

On the figure of £250 million, we have put some aspirational targets in place. However, we are certain that the process will not be a “big bang”. We are not in a position such that, once the Bill is passed, from day one we will have 40 new trusts delivering services through the private sector. The process is about creating the scope, the framework and the opportunity to develop into the brave new world that I believe most probation officers want to see.

How will private providers of probation services be held accountable for performance? The requirements placed on private providers to report their performance will be the same as those placed on public sector providers. Private sector providers will report to the  regional and national commissioners in the same way that public sector providers do and as private sector prisons already do quite successfully.

Procurements and contracts will be structured in such a way that providers will not be able to cherry-pick the more attractive areas of business. We are working on a programme of market development and engagement to ensure that services are packaged in a way that is attractive to potential suppliers. We plan to use the implementation of the national and regional commission strategies as an opportunity to begin that process of engagement. The national provider network will help to inform that work from the perspective of both purchasers and providers.

Will my hon. Friend say something about the relationship between the Home Secretary as a contracting party and the inspectorate, including the role that the inspectorate will play in assessing the delivery of services by private sector providers?

My hon. Friend makes a good point. As he knows, the Government examined the role of inspectors under various legislation. We have retained the independence of the individual inspectorates, although they have been asked to work more closely together on the joint services that they may be able to provide. He is quite right that the inspectorate regime will be that of Her Majesty’s inspectorate of probation. Andrew Bridges, the current chief inspector, has made it clear that his role is not to determine who provides probation services, but to ensure the quality of those services. I am quite confident that the fears that have been expressed by hon. Members about the quality of service can be allayed by the presence of the inspectorate.

The hon. Member for Hornchurch asked me what would happen in future if companies go bust, and what would happen then in terms of subcontracting. Things can go wrong and companies can become insolvent or go bust now. The existing arrangements and insolvency laws would apply if the same thing happened in future.

I hear what the Minister says, but does he accept that the increased scope of contractual arrangements, and therefore the multiplicity of providers and subcontracting arrangements, may highlight a need to focus on that issue more clearly if we are to ensure continuity of service? For example, if a head contractor fails, what does the Minister envisage will happen in practice?

I do not see any need for new measures. There has to be consistency in examining all contracts and all performers of contracts to militate against such a situation arising; it is also necessaryto monitor the performance and well-being of contractors. I do not see any need for greater involvement. The framework is in place: in exceptional circumstances—for example, if a probation board goes out to the private sector and problems arise—the Secretary of State has powers to deal with the situation.

The length of contracts would be a big issue. If the private sector were to be involved, it would take aview about the length and viability of a contract. Contracting already exists; there is currently a multiplicity of contracts between the different boards. We believe that replacing annual funding regimes with multi-year contract terms, to develop and maintainthe longer-term capacity, will help to increase sustainability and achieve some of the things that we want to see.

Budgets have been top-sliced and that has affected subcontracting figures. Probation boards can still do more, however. My hon. Friend the Member for Walthamstow said that boards worked with the voluntary sector and other providers. They do, but not with the right level of consistency. One board has contracted out 1.29 per cent. to the voluntary sector; another has contracted out 5.6 per cent. When we had a target, it was reached. When it was removed, the work was not contracted out. There is currently no consistency in working with the voluntary sector. My hon. Friend talked about community work and the payback scheme, which is an excellent scheme of which I have seen wonderful examples throughout the country. Community sentencing is not work on the cheap; it is testimony to how we can tackle offenders.

In Salford, the community has identified projects that they want carried out, the magistrates have sentenced offenders to work on those schemes and they have been delivered. Everybody wins and the community sees that the work has improved the area. Such schemes do not provide jobs on the cheap, but I question whether trained probation officers have to follow them all the way through. Cannot NACRO, or some other body, deliver that service? NAPO seems to be saying that a probation officer has to deal with everything.

The hon. Member for Hornchurch raised an important point about staff and staff training. We expect every organisation that employs staff to work with offenders to invest in skills and professional development. All providers will have to provide sufficient training for the services that they deliver. We will ensure that they do so through a process of accreditation appropriate to the type of service and contractual value. We need to continue to develop staff to deliver services in the new offender management environment, which is why NOMS is examining training provision to ensure that offender managers are able to deal with the types and range of offenders that we are talking about.

I am sad that, after 25 years, people feel that there is no future for the probation service, as in the example given by my hon. Friend the Member for Walthamstow. It is a tragedy that a person with that much experience is leaving because there is a lack of clarity about what the future holds. I want to say loud and clear that the future for probation workers, whether probation officers or probation support officers, should be rosy, because the Bill will raise the profile of their jobs and responsibilities. We know that they do a difficult job, but when it comes to dealing with offenders they do not have the public confidence that I would want them to have. That point goes right  to the heart of why we are creating the probation trusts rather than keeping the existing boards. Offender management affects all our communities. Reconviction rates cost the country almost £11 billion. We should respond to that with a holistic solution. I am grateful to the hon. Member for Hornchurch for reading out the LGA letter to hon. Members about how it sees things. The “Neighbourhood by Neighbourhood” document is the first time in my recollection that local government has accepted its responsibility for dealing with offenders.

It is only by widening participation, whether in business, in the private or voluntary sectors or in the wider community sector, that we will answer the problems of offender management. Probation officers will then be held in the esteem that they should be and will not be subject to scurrilous attacks from the daily newspapers when something goes tragically wrong. The clause sets out our opportunities: we want to see the probation service grow and we want to offer opportunities to a wider range of providers.

I turn now to the amendments. The implication of amendment No. 11 is that contracts should be made by probation boards or trusts rather than the Secretary of State. In fact, probation boards are already able to subcontract and there is no need to create probation trusts for that purpose. There are several difficulties with the current arrangements, as I have made clear. The first difficulty is that, although probation boards are legally able to subcontract at the moment, in practice they do not do so enough and insufficient use has been made of what other providers have to offer. That is why probation boards now have a target of subcontracting 10 per cent. of their budget by 2008. That is crucial to developing partnership working and a better fit with local needs. However, we need to go further than that. We need to be able to commission across geographical boundaries and across the prison gate. We need an element of choice to ensure that we have the right provider for the job. Restricting contracting to probation areas would remove those options.

Amendment No. 12 would restrict the services that can be contracted out to providers other than through the public sector. I understand that hon. Members are concerned to ensure that those services, which are so important in reducing re-offending and protecting the public, should be delivered to the highest standards. I am surprised at the suggestion that the continuation of a public sector monopoly is the best way to achieve that. I do not understand why we should use primary legislation to say that only one provider may deliver a particular service, regardless of what other options might exist. That is an outdated argument, not only in theory but in practice, given that up to 25 per cent. of prison and probation services are already provided from outside the public sector. However, public protection is our No. 1priority and we will proceed cautiously.

I envisage that the work relating to the management of offenders—the work of advising courts and supervising orders—will remain for the next two or three years in the public sector, which has inherited the expertise in the field. We will increase the involvement of the charitable and voluntary sector and of the private sector, especially in interventions, which will  work alongside the public sector to develop expertise and strengthen partnerships so that a more diverse range of provision is available in due course.

Finally, amendment No. 25 would place a statutory duty on providers to avoid conflicts of interest. I do not believe that that is a matter for legislation, although I understand what the amendment is driving at. The issue has been raised with me on several occasions. I find it hard to see why hon. Members find it so problematic. There is already potential for a conflict of interest, and with the current monopoly arrangements the public sector is responsible both for advising courts on sentencing and for supervising the sentences that are passed. Boards have targets to meet, for example in the numbers of offenders who undergo certain interventions. Strict guidelines are in place to deal with that, and nobody has suggested to me that they do not work. Ultimately, decisions on sentencing remain entirely at the discretion of the sentencer. If concerns are raised, they can be appropriately dealt with.

We have had a good opportunity to consider all the issues. I am interested by the suggestion made by my hon. Friend the Member for Stafford in the second half of his speech about what we should consider. I am prepared to consider that and I shall come back at a later stage in the Bill to see what detail we can put forward.

We have had an important debate that goes to the heart of what we are trying to achieve. The measure is not about privatisation but about expanding the range of providers to ensure that we tackle re-offending, and I hope that the hon. Member for Hornchurch will withdraw his amendment and support the clause.

I thank the Minister for his response and the hon. Members for Walthamstow, for Cheadle and for Stafford for their contributions.

In making my initial comments on amendment No. 11, and, more generally, on the clause, I highlighted three specific elements: the lack of robust justification for the model adopted in the Bill, particularly in clause 3; the lack of clarity about what the Government’s alternative model would actually deal with; and the impact on how services would be provided. We have perhaps a little more light on the first one, in that we have had an explanation as to why the Government are taking this route. I heard what the Minister said about the approach in 2001 being some sort of stepping stone, or step change, to assist in reaching this position. Although I have not had the pleasure of reading the Hansard report of the debates, I suspect that that was not how it was set out at the time. I suspect that it was said that the Criminal Justice and Court Services Act 2000 would provide all the changes that were required to sustain progress in the probation service. Therefore, it is interesting that the legislation is now regarded a step change and that it was imagined all the way through that we would seamlessly end up precisely where we are.

I take the Minister at his word, but I seek to characterise the Bill as arising from a sudden realisation on the Government’s part that the 2001 moves did not achieve what they wanted quickly enough. As we were told this morning, they have been considering the change for some four years now. It  seems that they realised almost immediately that the 2001 change was a big mistake. If that was the case, the probation service, officers and staff who had to go through significant change at the time will certainly feel badly let down.

On clarity as to what is involved, I would like to say that the Minister’s comments informed me as to the strategy and direction, but, if anything, they have added to the sense of, “We could do this, we could go that way, we could maintain certain bits here.” It seems that all sorts of different aspects could flow from the Bill. Rather than giving clarity to the Committee and probation services and their staff, he may have added to the uncertainty. I respect what he said about keeping certain key aspects as they are, at least for the next couple of years, but what will happen after that? What will be the direction at that time? I suspect that we will return to that issue during our debate in clause 4 on probation trusts.

It was interesting that the Minister said that the Bill would not produce a big bang; that it is intended to be part of a steady and incremental change. However, that seems to run against the arguments that the changes are intended to bring about cuts in reoffending, and greater public protection. His comments seem to suggest that there will not be much significant change for several years, even with the Bill. I may have paraphrased him incorrectly, but it seems that there will not be much significant change in the near future. He seems to want one thing on one side but another thing on the other side.

No, it is not that. The Bill offers an opportunity for the first probation trust to be in place by 2008. What I am saying is that on day one in 2008 we will not move to 42 probation trusts. Good workis already being carried out by regional offender managers in consultation with trusts, local area agreements are in place, and we are listening to people’s concerns. All that the Bill does is set out the framework for trusts to be created.

The Minister says that the Bill is about creating a framework, and that it is intended that the first probation trust will be introduced in 2008, but it is unclear what will happen thereafter. The framework is being set up, but that seems to underpin the fact that what is happening will not necessarily change significantly, at least in the next few years. As I see it, from what the Minister said, even if the Bill were enacted, we would not necessarily see a significant improvement in the reoffending rate, which is one of the key aspects of the need to introduce the Bill and create the framework and structure in the first place.

Will my hon. Friend join me in believing that the phased approach to the implementation of the schemes carries with it an opportunity to address one of the fundamental problems underlying the Bill, which is the lack of hard evidence for a causal link between increased competition and reduced offending rates? Will he join me in pressing the Government to think a little harder about how data could be made more transparent as we climb the curve of adoption?

I thank my hon. Friend for that intervention. He rightly underlines the lack of a business case or financial model underpinning the structure. Although I understand what the Minister said about the phased approach and the introduction of the first probation trust in 2008, we do not get a sense of where the system will flow after that. Is it intended, for example, that there will be only one trust, as the Minister was implied, in 2008, and that others will roll out thereafter? Will he wish to see how that first probation trust operates before creating or empowering further trusts? Although a plethora of powers is invested in the Secretary of State, there is a lack of framework and structure, and even today we have no clear direction as to where that may take us. That may well be deliberate; the Minister may say that that is the Government’s intention, and that they are trying to create as much discretion as they can. However, I return to the issue of accountability and holding Ministers to account. I know that the Minister did not directly address that in his comments, although I raised the matter earlier. Perhaps he will reflect on that, and intervene before I sit down. What protections will continue to be afforded to ensure that accountability is maintained?

I apologise to the hon. Gentleman. We can return to the IT element in the debates on later clauses. The Secretary of State has to report to Parliament, and there is a statutory duty on offender managers to consult a number of people. I will set out the details about that accountability in a letter to the hon. Gentleman, and to the Committee.

I am grateful to the Minister, as having that sort of clarity and reassurance to back up what the Home Secretary said on Second Reading—and probably what the Minister said too—is important. There is concern that there is some obfuscation about liability or some stepping away from that responsibility. We need to see clearly what the Government are intending to ensure that that will not happen.

The Minister re-emphasised in his contribution this morning the point that the Bill is about giving power to the Home Secretary to decide how he—or she, ultimately—may want to do things. It seems to be about vesting power in the Home Secretary to say, “We thought that it was going to go this way, but in fact, we are nearer that way. I am going to provide a lot of the services directly, or I am going to get the Prison Service to do it. Or we’ll go down the probation trust route, or another route.” The difficulty is that we do not know what the direction will be and how the strategy will be delivered. It is the sheer uncertainty that is the problem.

I respect what the Minister said—that he fully recognises the work of probation officers, the need to retain staff and the need to ensure that the integrity of the system is maintained—but the lack of a clear direction of travel creates a significant risk that probation officers who have been in the service for many years will say that they have had enough. The hon. Member for Walthamstow made that point about the person to whom he spoke. It would be a tragedy and calamity for the service if highly qualified, good  staff were to leave because they did not know where it was going or what the future held. The Government have the opportunity to be more specific and set out their intentions more clearly. They should provide in the Bill their intended structure for the service.

We have discussed the delivery of services, and I raised the issue of insolvency. I hear the Minister’s point that the risk of insolvency already exists and that there should be no problem dealing with it in the ordinary course of things, but the Bill means that there could be a much broader contractual arrangement with a plethora of contracts, subcontracts and sub-subcontracts. If the protection of the public is our primary goal, it would be a dereliction of duty if that possibility were not properly considered and addressed.

In other Bills there have been specific frameworks to address such issues. We need to understand what would happen if a head contractor were to become insolvent and what right to step in the Secretary of State would want. The Minister might say that that will be specified in contracts, but there must be greater clarity and an assurance that the continuity of service will be maintained and the emphasis on public protection will not be compromised. We could end up with a complex arrangement, and it is possible to address that. It needs to be considered properly and formally if the system is to be robust and effective, and I am not comfortable about that as the clause stands.

I hear clearly what the Minister says on training, which is important. I welcome his indication of the importance of clarifying how the tendering and contracting arrangements will work. I am comforted to know that their operation is on the Home Office’s radar screen.

The Minister said that conflicts of interest such as those covered by the amendments could exist today so there was no need to mention them in the Bill. Just because something happens today, that does not necessarily mean that protection is not appropriate for the future. If we are to enter into a more dynamic and fluid arrangement for the probation service, building blocks of protection will become essential. The risk of problems occurring needs to be properly addressed in the Bill, and I find it a little surprising that the Minister is not prepared to accept that point and ensure the robustness of the system and the protection of the service by accepting an amendment.

We come back to the nature of the arrangements. The Minister has said that this is not about centralising. Nothing that I have heard from the Minister today has made me change my view that this is a very centralising measure, which is about ceding power, authority and control to the Home Secretary over the manner in which services are to be directed.

There is a common argument that I have come across in my short time in the House where the Government always say, “Well, even though the Bill looks as though it is about centralisation, it is not at all. In fact it will deliver more local services, even though it seems to suggest that the contracting is from the centre and it is all about centralisation.” I have not been persuaded in those debates before and I am not persuaded in this debate that this measure will ultimately have the effect that is claimed. Whatever the Minister has said and  whatever the intention may be about providing services more directly at the local level, I do not believe that that will happen.

There are issues about local government. I welcome the positive notes that the Minister struck about the LGA and the Coalition on Social and Criminal Justice regarding the role of local area agreements and the acceptance by local government of its role. This is all about shared responsibilities and it is something that we on this side of the Committee recognise very clearly.

My hon. Friend has been generous in giving way and I rise to echo his concern about the Government’s lack of clarity not only over the specifics of the Bill but in the wider context of centralism and localism. I asked the Minister when he was going to get round to making the argument that this is not about top-down politics. He never did get round to it because the argument cannot be made in this context. What puzzles me is how we set this in the context of the wider sense of direction of the Government set by the Chancellor in a speech on 6 June called “Building 21st-century Public Services” in which he says:

“In the new century people and communities should now take power from the State. A re-invention of the way we govern is required. Local councils and people should have more power over the things that matter to their community.”

How do we square that with the Bill before us?

My hon. Friend has given us a real nugget there regarding the apparent direction of  policy and the reality of the Bill, which does not take us in that direction. The LGA made the point thatthe Bill goes in the opposite direction: rather than sharing responsibility and embracing the fact thatlocal government and other bodies accept their responsibilities and the fact that they have a very important and significant role to play, we have in clause 3 the Secretary of State effectively saying “Thanks, but no thanks”.

The Home Secretary says that contracting will be through the centre. At best, it is about regionalisation and regional commissioning, as the Minister accepted. Commissioning was intended to be done through the regional offender managers. Although there may be certain arrangements that could then be contracted down, and not, as he said, a panoply of different contracts coming out at that level, there is a risk that, rather than allowing that local dynamism that he himself said he wanted to create, the process could be stultified.

Regarding contract delivery, I made the point, asdid the hon. Member for Walthamstow, about the individualisation of services and how unpaid work would fit in.

It being One o’clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Four o’clock.