David Gauke, the Justice Secretary, has announced that Community Rehabilitation Company (CRCs) contracts, which provide a probation and rehabilitation service for low-risk offenders, are to be terminated in 2020, two years earlier than agreed. The contracts, the cornerstone of the Transforming Rehabilitation reforms, began in 2015 under a partial privatisation by then-Justice Secretary Chris Grayling.

The current CRCs are delivered by a mix of providers, including PeoplePlus, Sodhexo, Working Links, and Seetec, as well as consortium providers such as the Reducing Re-offending Partnership (which includes Ingeus) and Purple Futures (which includes Interserve). Many other smaller and specialist providers are also involved in the scheme.

Some of the companies are understood to have been running up losses on their contracts, which has contributed to today’s announcement. Providers will, however, now be given an extra £170m to improve services for the remaining two years of the contract. As part of this, fines owing from CRCs for failing to achieve payment by results targets will be waived to support improved service investment.

Despite the early end to the contracts, the government insists that the private sector still has a role to play and will be putting contracts out to tender for the overhauled framework proposed for 2020 onwards. There are currently 21 CRCs and 7 National Probation Service (NPS) regions. Under proposals set out in a new consultation document, entitled “Strengthening Probation, Building Confidence”, 10 new probation regions will be created in England. Each will contain one CRC and one NPS area, consolidating the total number of outsourced CRCs in operation.

The previous commissioning round for Transforming Rehabilitation was complex and substantive, requiring bidders to table heavily detailed proposals and financial models. This was set against the back-drop of the break-up of the former Probation Trusts. A new framework may present different, albeit no less complicated, challenges, which could see a major tender round dropping in 2019. Providers may, however, be more cautious this time around, and seek more assurance on financial returns. The result could be another major shift in the landscape for probation services.

The link below takes you to the full consultation document: