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Industry: New report attacks for-profit claims.

Labour Research
July 1, 2004

The Truth About Private Prisons

The myth that the private finance initiative (PFI) has been successful in the prison service has been has been exploded in a report published by the Catalyst think tank.

The report uses official statistics to show that, contrary to government claims, much of the cost savings achieved by private companies are not due to "innovation" and "flexibility", but have been achieved by cutting the terms and conditions of the staff employed in the services. The paper focuses on the prison service because this is the service where most evidence is available.

According to Chancellor Gordon Brown, prisons are an area where "we can show that the use of private contractors ...need not be at the expense of terms and conditions of employees."

But the Catalyst paper presents evidence showing that average pay is 30% lower in private prisons than in the public sector, contracted working hours are longer, holidays are shorter and pension provision is inferior, offering no final-salary scheme.

The paper's findings will increase pressure on the government to enhance protection for the pay and conditions of staff in public-private partnerships (PPPs).

Paying the cost: public private partnerships and the public service workforce, by Sanjiv Sachdev of Kingston Business School, is available for downloading free of charge from, or phone Catalyst on 020 7733 2111.

* Public services union UNISON has recently published a briefing paper as part of its Fair Wages campaign to end the two-tier workforce in public services.

This can be downloaded free from

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