Victoria’s prison system: rising costs and population, little accountability

In the recent Victorian state budget, the Labor government announced it would spend an additional $1.8 billion on prisons and corrections in 2019-20 to accommodate the state’s dramatically increasing prisoner population.

A new maximum security prison, the biggest in the state, will be built near Geelong at an existing prison precinct that already includes Barwon Prison and the Marngoneet Correctional Centre. In addition, capacity at other prisons will be expanded.

The government has yet to announce how the new ‘supermax’ prison will be built, but in the past, public private partnership (PPP) models have been used, continuing a process that began in the 1990s with the Kennett government’s prisons privatisation project, when three privately designed, financed, built and operated prisons were opened in the space of two years, ending the state’s monopoly on prisons.

Subsequent governments have preferred to use PPPs to build prisons, and opted in the main for public management of them. The result, 25 years later, is that Victoria has a hybrid prison system – part private and part public.

Nearly 40 per cent of Victoria’s prisoner population is housed in three privately managed prisons – Port Philip Prison, Ravenhall Correctional Centre and Fulham Correctional Centre. As a consequence, Victoria has the largest proportion of privately managed prisoners in Australia, while Australia has the largest proportion in the world.

This remarkable development arose from a belief that privately managed prisons would be cheaper, better and more accountable than those managed by the public sector. But has this really been the case?

Expectations not realised

Our recently published research assessing 25 years of prisons’ privatisation in Victoria found that the confident expectations that private prisons would deliver lower costs, improved service performance and enhanced accountability haven’t been entirely realised, and that the actual performance of the post-privatisation prison system in Victoria has been mixed, to say the least.

Annual expenditure per prisoner in Victoria has increased considerably since the opening of private prisons. According to the Productivity Commission’s authoritative annual Report on Government Services, Victoria now spends more per prisoner than any other state or territory in Australia.

Real net operating expenditure per prisoner per day in Victoria in 2017-18 was $324, compared to $182 in New South Wales and an average $223 for all Australian states and territories. It’s even been claimed that Victoria has the fourth-most expensive prison system in the OECD.

But what accounts for this? A recent report by the Victorian Auditor-General into two of the privately managed prisons claimed that private prisons were up to 20 per cent cheaper to run than publicly managed ones. While logic might dictate that this should be the case, we could not confirm this, as the data on which the claim was based isn’t publicly available.

Even so, the same Auditor-General’s report cautioned against comparing the costs of private prisons with system-wide averages and public prisons, arguing operating costs of individual prisons are influenced by their location, age, size, physical layout, security classification, prisoner profile, and their role or function within the overall corrections system. In the Auditor-General’s own words, “these differences make it difficult to compare costs on a ‘level playing field’”.

Private not necessarily better

Turning to the issue of whether privately managed prisons are ‘better’, or more effective, the Report on Government Services indicated that this, too, was not necessarily the case.

Reporting on performance measures that serve as proxies for service quality, it showed that while some aspects of the prison system in Victoria relating to unnatural deaths in prison, employment in prisons, and escapes from prison had improved since the introduction of private prisons, this was not the case for assaults in prisons, hours out of prison cells, and vocational education and training opportunities for prisoners.

Unfortunately, a comprehensive assessment of how the system has performed is not possible, as the data for nearly all proxies we examined were incomplete.

The data deficits for performance indicators also have implications for the third improvement anticipated by advocates of private prisons – namely, accountability.

But other factors affect the accountability of the prison system – chief among them the commercial-in-confidence clauses in the contracts between the private companies managing the prisons, and the government, which thwart the public’s ability to identify contractual violations and any remedial actions taken.

Victoria has gone from having one of the lowest rates of incarceration in the world, with 50 prisoners per 100,000 population in 1992 (lower than Sweden and Denmark, and just higher than the Netherlands), to 147 prisoners per 100,000 population in 2018 (comparable to Zambia, Algeria and Jamaica).

Accountability of the prison system has also been hampered by the refusal of successive governments to appoint an independent inspector general of prisons, similar to the role HM Chief Inspector of Prisons in the UK and the Inspector of Custodial Sentences in Western Australia.

Under this approach, an independent team of inspectors monitors key aspects of prison operations and then reports to an inspector of prisons, who then reports in turn directly to Parliament. This option has been considered and rejected in Victoria. Instead, and unlike other jurisdictions, Victoria has persisted with an in-house monitoring and review process that lacks transparency and accountability to stakeholders outside the corrective services bureaucracy.

While this model prevails and gaps in performance data persist, the notion that accountability has improved in Victoria’s privatised prison system will continue to be contested.

Rates on the rise

Victoria is spending more and more on a prisons system in which rates of imprisonment continue to rise as a result of population growth, changes to laws relating to sentencing, bail and parole, and recidivism rates that have persistently hovered above 40 per cent.

In the past 25 years, Victoria’s population has grown by 40 per cent, and its prisoner population more than trebled. From a prisoner population of 2271 in 1992-93, Victoria housed 7258 prisoners in 2017-18.

In the process, Victoria has gone from having one of the lowest rates of incarceration in the world, with 50 prisoners per 100,000 population in 1992 (lower than Sweden and Denmark, and just higher than the Netherlands), to 147 prisoners per 100,000 population in 2018 (comparable to Zambia, Algeria and Jamaica).

Compounding this, the prisoner population is increasingly characterised by mental health conditions, drug and alcohol issues, chronic illnesses, and over-representation of young prisoners, prisoners with disabilities, and prisoners of Aboriginal and Torres Strait Islander background.

In this ever-more-challenging and complex correctional environment, we simply don’t know with any certainty if Victoria’s part public-part private prison system is now cheaper, better and more accountable. And, we won’t know until all relevant data is made publicly available.