Are the U.k.'s Payment-by-results Programs Right for U.s. Prisons?

• Jurisdiction: United States,Federal
• Publication year: 2018
• Citation: Vol. 33 No. 1

Are the U.K.'s Payment-by-Results Programs Right for U.S. Prisons?

Alys V. Brown

ARE THE U.K.'S PAYMENT-BY-RESULTS PROGRAMS RIGHT FOR U.S. PRISONS?^†

Introduction

The United States is the most incarcerated country in the world,¹ whose most recent population calculations reached over 1.5 million people behind bars in 2015.² The price of housing for the world's largest prison population to American taxpayers is over $80 billion per year.³ By comparison, between 2016 and 2017 the United Kingdom only spent £2.9 billion, or $4.2 billion, housing its average prison population of 84,705.⁴

Not only is the American prison system costly to taxpayers, it is also costly to inmates. In a recent study it was found that 21% of male inmates had been assaulted over a six-month period, either by their fellow inmates or prison staff.⁵ Sexual assault, in addition to other acts of violence, is also prevalent throughout U.S. prisons.⁶ In 2011 alone, there were 8,763 allegations of sexual assault or sexual victimization reported.⁷ Looking to other countries to determine if punishment can be provided in a more cost-efficient way can improve the current state of America's criminal justice system.

To improve prison efficiency and performance, certain pro-incentive prison reform advocates suggest that the criminal justice system should use performance-based contracts to fund prisons based on reaching specific performance measures or outcomes.⁸ Over the last decade, the use of performance-based contracts has quickly spread to various countries across the

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globe.⁹ Currently, "there are more than 70 projects in 18 countries, with 16 projects in the U.S.," all featuring slightly different approaches to a performance-based contract.¹⁰ The use of performance-based contracts in prisons originated in the United Kingdom.¹¹ Over the last decade, the United Kingdom has successfully used a "payment-by-results" (PbR) program for paying private prison contractors based on their ability to lower reconviction rates (also referred to as recidivism rates) by certain percentage points in two of its private prisons.¹² Though payment-based contracts are being used across the world, the United Kingdom's use of PbR will be the focus of this Comment.

This Comment argues that the U.K.'s pilot private prison PbR programs, in which they compensate prison contractors based on reductions in reconviction rates, are appropriate for use in the U.S.'s federal and state prisons—both public and private. To make this argument, this Comment will examine the effects of the U.K.'s PbR programs in its prisons, health, and employment sectors; explore the potential advantages and disadvantages of a PbR program; and directly apply the U.K.'s PbR prison pilot programs to the federal and state governments in the United States. To conclude, this Comment will argue that the two U.K. private prison PbR pilot programs currently used by the United Kingdom can serve as models for jurisdictions in the United States when designing their own PbR programs, but that the United States cannot directly apply these models to all state and federal prisons due to the need for PbR programs to be designed specifically for the exact prison it is going to be implemented in.

Though this Comment will argue that the United Kingdom's PbR programs should not be used directly in the United States, designing and proscribing a particular PbR model is outside the scope of this Comment due to the specificity required for designing PbR programs. Instead, this Comment will explain certain factors that jurisdictions in the United States should consider when determining whether to implement PbR programs.

Part I of this Comment will provide background information on incarceration and recidivism in both the United States and United Kingdom, and background information on the U.K.'s use of PbR programs throughout its

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government. Additionally, Part I will describe the U.K.'s PbR prison pilot programs at Peterborough, Doncaster, and Leeds, and will touch on the growth of PbR programs across the world. Subsequently, Part II will analyze the advantages and disadvantages of PbR programs based on the research and results from Peterborough and Doncaster. Part III will discuss the applicability of the U.K.'s PbR prison pilots in U.S. federal and state prisons. To conclude, Parts IV and V will address some potential criticisms of this proposition and draw together some concluding thoughts.

I. Introduction to Payment-by-Results

A. Incarceration and Recidivism in the United States and United Kingdom

1. The United States

As previously mentioned, the United States houses the largest incarcerated population in the world.¹³ At the end of 2015, the United States had an estimated 1,520,800 prisoners under the jurisdiction of state and federal correctional authorities.¹⁴ Roughly 90% of these inmates are held in state prisons.¹⁵ The U.S. prison population at the end of 2015 marked the lowest population since 2005 and represented a 2% decrease in the prison population from 2014.¹⁶ Even with this decrease in prisoners, the U.S. prison population still greatly outnumbered any other country's prison population. This high prison population leads to high costs of running and maintaining correctional facilities.¹⁷ The Bureau of Justice Statistics (BJS) reported that in 2012 total expenditures of corrections at all levels of the government totaled $80.7 billion.¹⁸

Arguably, this high cost could be justified if the criminal justice system successfully prepared inmates for life after release, but recidivism rates¹⁹ among previously incarcerated individuals in the U.S. are high.²⁰ After following

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federal offenders for eight years post-release,²¹ a study found that out of "almost one-half of federal offenders released in 2005, 49.3%, were arrested for a new crime or rearrested for a violation of supervision conditions."²² It is difficult to gather data regarding state recidivism rates due to differences in state law and the longitudinal nature of recidivism studies; however, it has been found that "when excluding California, whose size skews the national picture, recidivism rates between 1994 and 2007 have consistently remained around 40%."²³ More recently, a 2014 BJS report across thirty states found that "about two-thirds (67.8%) of released prisoners were arrested for a new crime within 3 years, and three-quarters (76.6%) were arrested within 5 years."²⁴

State and federal government often contract out their incarceration facilities' management to private prison companies.²⁵ Governments seek bids from private prison companies to establish a new private prison; once a private prison company wins, it begins running the daily operations of the facility and assume legal liability while being paid by the government.²⁶ The use and origins of private prisons started in the United States in 1983 with the founding of Corrections Corporation of America.²⁷ In 2015, the number of prisoners in private prisons was just 8% of the total U.S. prison population²⁸ —"about 126,000 prisoners were held in privately operated facilities under the jurisdiction of 29 states and the federal Bureau of Prisons."²⁹ This population represents an 8% decrease in private prison population since its peak in 2012.³⁰

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2. The United Kingdom

According to the most recent counts, the United Kingdom's total prison population stands at 86,256.³¹ In 2008, the cost of housing an inmate in the United Kingdom is approximately £40,000 (or $51,012 in 2018 USD) per year.³² The Ministry of Justice (MOJ) publishes proven reoffending statistics every quarter, which represent the amount of people who have been reconvicted for reoffending.³³ According to the most recent statistics, "the overall proven reoffending rate was 24.8%," which is a decrease from the previous quarter.³⁴ The United Kingdom began contracting with private prison companies in the 1990s.³⁵ As of 2012, there were fourteen private prisons in the U.K.,³⁶ which made up 15% of the country's prisons.³⁷

B. The History and Development of Payment-by-Results Programs in the U.K.

Traditionally, social programs focus on the outputs of the program which are "the tangible and intangible products that result from project activities," such as the number of people who are released from prison or who gain employment.³⁸ Whereas PbR programs focus on outcomes that are "the benefits that a project or intervention is designed to deliver," such as reduced recidivism or lower unemployment rates.³⁹ A PbR system "allows the government to pay a service provider on the basis of the outcomes their service achieves rather than the inputs or outputs the provider delivers."⁴⁰ The theory behind PbR is that it will encourage private prison providers "to focus on ends, not means, and is seen as a means of promoting improvements in public services."⁴¹ Advocates of PbR

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claim it will lead to greater efficiency, more innovation, transfer of risk, and encourage new market entrants⁴² —a claim which will be discussed in more detail in Part II.

The idea of PbR in the United Kingdom was first introduced into the country's National Health Service (NHS) in the early 2000s, when providers were paid for the number and type of patients treated.⁴³ One of the focuses of the program was to "improve fairness and transparency of the payment systems."⁴⁴ After several years of implementation, researchers at the King's Fund, a health charity, found that PbR in the NHS contributed to "rapid reductions in lengths of stay," compared to Scotland where PbR was not implemented as a control.⁴⁵ Additionally, the researchers noted that there was little evidence that PbR had a negative impact on quality of the health services and that the ability to earn extra payments was not being used.⁴⁶

In June 2011, the U.K. implemented another PbR program, the Work Programme, which paid contractors and employers based on their ability to hire and...