Public Audit Committee [Draft]

Meeting date: Thursday, March 28, 2024

Official Report 684KB pdf

---

Section 22 Report: “The 2022/23 audit of the Scottish Prison Service”

Welcome back. The second public evidence session this morning is on the Auditor General’s section 22 report “The 2022/23 audit of the Scottish Prison Service”, one dimension of which is consideration of the operation of the contract that is run by GEOAmey. I am pleased to welcome our witnesses, who are from GEOAmey. We are joined by David Jones, the managing director; James Huntley, the commercial and finance director; and Gavin Redmond, the account director for the Scottish court custody and prison escorting service. You are all very welcome.

We have some questions to put to you but, before we get to those, I invite Mr Jones to make a short opening statement.

Good morning, and thank you, convener, and members of the committee, for giving me the opportunity to address matters that the Auditor General raised—in what I must say was a balanced and accurate section 22 report—regarding GEOAmey’s delivery of the Scottish court custody and prisoner escort services contract. I also thank and acknowledge His Majesty’s chief inspector of prisons for her insightful remarks on the delivery of the services when she gave evidence to the committee two weeks ago in support of your work.

The post-pandemic period has been an incredibly difficult and challenging time for all criminal justice partners and for GEOAmey. Several factors have coalesced and impacted our ability to perform to the standards that both we and the criminal justice partners expect. Those factors were largely, but not entirely, outside of GEOAmey’s control and, as the Auditor General mentioned in his report, they relate to the changing conditions since the contract award. That has resulted in GEOAmey being unable to insulate the partners in the way that we would have wanted from operational difficulties that have led to the well-documented and much-publicised impact on the criminal justice system in Scotland.

We have clearly had issues, and I take this opportunity to acknowledge and apologise fully for the role that we have played in the disruption to the criminal justice system in Scotland. That includes the Scottish Prison Service, Police Scotland, the Scottish Courts and Tribunals Service, the Crown, members of the judiciary, court users, victims, the national health service and those in our care who have had to endure delay and frustration—there is, after all, a human impact to every delay. That said, I am incredibly proud of the extraordinary work of my officers and management team in Scotland. They have done all that they can, every day, to minimise disruption and delay as far as they have been able to, while caring for some of the most vulnerable people in our society.

I sincerely hope that all parties are now seeing the very early results of our efforts to improve the contract’s performance as the effects of the work that we have done with the SPS and the multi-agency liaison group start to yield positive results. I put on record that I acknowledge the steps that the criminal justice partners have taken in starting to address some of the inherent system-wide issues.

Finally, I wish to state GEOAmey’s commitment and determination to play our part in making the SCCPES contract a success. The contract is difficult and challenging, but it is not impossible, should all parties recognise that it will need a multi-agency approach rather than stand-alone efforts of any individual organisation. Thank you.

Thank you for that very clear opening statement. I will turn straight to the deputy convener, Jamie Greene, to ask the first questions.

Good morning, gentlemen. Thank you for your frank opening statement, Mr Jones—we do not often hear one of those in committees. However, having said that, I want to ask you the following. You have just repeated the phrase that you treat the Auditor General’s report as “balanced and accurate”. The report’s opening gambit is that

“The ongoing poor performance of the contract is resulting in delays and inefficiencies across the justice sector, impacting on policing, prison services and the courts.”

Is that a balanced and accurate description of your operating performance?

It is. I will bring in Gavin Redmond on this point in a minute. It is a fair, balanced and accurate report on our operation and the performance of the services. In turn, I have to balance that by saying that the Auditor General goes on in his report to say that a number of the causal factors relate to the changes in the operating environment since contract award. Those factors were never contemplated as we bid for the contract, modelled the contract and put our solution in place. Having to adjust mid-contract to what is, in effect, a new way of working has given us a number of difficulties.

The Auditor General talks extensively about the interdependencies across the system and the need for multi-agency working to overcome the changing environment that we are dealing with today. I have to say that the changing environment is not just internal to the contract operation; it involves the wider external factors that I talked about in my written evidence to the committee, such as the socioeconomic factors that we have had to deal with since the pandemic has come to an end.

It is a fact that there are fewer people looking for work and that most organisations find it incredibly difficult to fill vacancies. Public and private organisations are in exactly the same position in many sectors across the United Kingdom. The description in the report is right, but other balancing factors need to be considered.

I reiterate what David Jones said. The Auditor General referenced not only the conditions in the contract that have changed but the fundamental point that the environment is now quite different.

There are two reasons for GEOAmey’s failures in service. One is that we have a lack of operational officers to fulfil the tasks and the services, and the second is the change in our operating environment. Following the Covid-19 pandemic, we are operating 38 per cent more High Court docks than we did prior to that period, and 44 per cent more solemn cases in Scotland. That has a huge impact on our resource. If we shift to looking at settings outwith the courts, we are managing 35 per cent more bed watches, which is a different area of service that we facilitate. When we look at the operation in the round, therefore, it is a very different one with a very different level of demand.

Let us look at some of that in the context of the fact that GEOAmey has received £4 million of financial penalties due to its performance issues. Since 2021, it has been served with five improvement notices on specific issues. That is the backdrop that we are working against here.

You have just responded by saying that there are two reasons for that. One is the one that you are leading on, by selectively quoting from the Auditor General’s report, which is the changing operating environment that you work in. I do not underestimate how challenging that is for you. However, for me, the main driver seems to be staffing issues, which we will come on to later in more detail. Surely, as a company that operates in the service industry, working with public sector organisations, you also operate in other jurisdictions. It sounds to me a little bit as though you have gone into the contract here in Scotland with your eyes wide shut. Surely the challenging changes of scenario in contract terms that you operate in would have been known to you at the time of entering into the contract. It sounds to me as though you are saying that the failures are everyone else’s fault but your own.

I have to refute that. The changes that we see in our operating environment today are so fundamental that there is no way that they could have been contemplated in the commissioning, the specification or the running of the contract.

Gavin Redmond has just given the committee some numbers. There has been a 35 per cent increase in bed watches, which is huge. We are not talking about an increase within the margins or a 5 or 10 per cent flex of the resource; there has been a simultaneous increase of 35 per cent in bed watches. On High Court business, there has been an increase of 38 per cent and, on solemn and jury cases, it has been 44 per cent.

Those substantial changes are coupled with the situation on non-court hospital appointments: 60 per cent more people are involved than was the case prior to the pandemic as regards the number of crews and people going to hospital. On reflection, or with the benefit of hindsight, you could say that the prison population was always going to age. However, when the contract was commissioned, I am not sure that it was anticipated that the population was also going to grow.

If we put all those factors together, at the same time, it leads to an operating environment that we could not have contemplated and that the contracted model that we went through certainly could not have accommodated in any way.

The contract said that you needed between 650 and 700 officers but, at the lowest point, you had only 510, so of course that will put pressure on your ability to deliver services. That is not anyone else’s fault but your own.

You are right. I opened by saying that we have had difficulty recruiting people. There is no question about that. Gavin Redmond made it clear that there are two factors here. We have not had enough people to fulfil the service demands. That is a matter of fact. I put that in my written statement, and I acknowledge it fully. Please do not think that I am trying to ignore that, because I am not.

10:30  

However, the factors surrounding that have been largely outside our control. Since the pandemic period ended, we have struggled to compete with an incredibly competitive employment market. We have had to effectively compete with other agencies within our sector that have more attractive packages, which is quite rare, and larger organisations that have greater and more structured career paths than we do. Not everyone wants to work in this sector and, if the people who do can go to alternative parts of the sector—the police, the courts and the prison service, as well as the immigration service—that all pay considerably more than the prisoner-escorting contracts have ever done, they will go to them and we will struggle. That is the environment that we have found ourselves in.

Of course, the obvious solution to that is to improve the package that you offer your staff. Retention would surely improve off the back of that, although that might come at a cost to your profit margin. Do you get the impression that you have bitten off more than you can chew with this contract here in Scotland?

No, I would not say that, and I will tell you why. Leading up to the beginning of the Covid period in March 2020, we were getting to the right level or thereabouts in terms of the performance of the contract. We had a difficult transition period, which was the period when we went live after mobilisation. It took some time to bed down the contract. I would put that down to typical teething issues—we were adjusting to the workforce, adjusting to the new ways of working and adjusting to the contract.

However, in quarter 4 of 2019—months 7 to 9 of the contract—we were approaching the service performance that was expected under contract, and, in the January and February before lockdown, we were at contracted levels of service. If we did not have that experience, the premise of your question would have more validity. However, given that we operated to the required level in a period in which the contract was not affected by these operating changes, I think that we did not bite off more than we could chew.

I know that others will want to come in, and we have lots of questions for you today. First, however, I will say that I spent two years on the Scottish Parliament’s Criminal Justice Committee and I know that, although the majority of stakeholders in the courts and in the prisons whom the committee met when we visited those places in person spoke very highly of the individuals who work in your organisation—it is important to put that on the record—they had very few positive comments to make about the company in general.

To go back to my first question, GEOAmey is an experienced organisation in the public sector, with large contracts in other jurisdictions, so why on earth did you go into a contract that was so tight that it did not allow you the flexibility to change the contract terms or operating model as the environment that you worked in changed? Clearly, it has changed substantially—in your view, it has changed more than it should have, according to the contract that you went into. You must employ some pretty decent solicitors to help with the contract wording and commercial negotiations, so why does the contract not allow for those substantial changes in the environment that you work in?

The contract allows for a degree of change. For example, if the number of routes were to change by 10 per cent, up or down, we could sit down and renegotiate with the SPS based on the effects of that.

There are change clauses in the contract. For example, if the SCTS wishes to open a new High Court, we would enter a period of negotiation to see what that means. That would give us the opportunity to recruit accordingly and to understand the effects of those changes on the operation.

There are change clauses. However, the scale of the changes that occurred in a relatively short period led to a changed operating environment. It is not just me who thinks that; that has been stated by the customer—SPS—and the Auditor General in his report. I stick with that. There is no contract that could possibly have contemplated the scale of the changes that we are talking about.

It sounds as if you have unfortunately found yourself in a perfect storm.

Absolutely, but I did not want to use that term.

We will move things along. I invite Colin Beattie to put some questions to you. Mr Huntley, I do not know whether you were preparing to answer one of those questions, but perhaps you could respond to Mr Beattie’s questions.

I would like to explore the original contract. GEOAmey was the sole bidder; is that unusual in these circumstances? Were there other providers in the market that chose not to bid?

GEOAmey was the sole final bidder. Two other organisations bid for the contract in the initial phase. It was a two-part procurement process of initial bids and then final submissions, or the best and final offer—BAFO. GEOAmey was the only organisation to submit a final bid. Is that unusual? For example, I understand that Serco was the only bidder for the southern lot in the HM Prison and Probation Service contract. Out of the two contracts that have been procured since 2019, one contract had two bidders and two contracts had a sole final bidder, so two out of the three have had only one bidder.

Did the other two organisations that were initially interested withdraw or were they eliminated on the basis of cost and ability to deliver?

Perhaps Gavin Redmond can comment on that. I am not sure what decision-making process G4S or Serco undertook when they were evaluating whether they should make a final bid for the SCCPES contract. From a GEOAmey perspective, and going back to Jamie Greene’s point, we had an extensive team of lawyers working on the bid, and we have extensive bid experience. Going into the SCCPES bidding process, we believed that we had a compelling offer and that we put forward a strong solution.

Incidentally, we still believe that our solution will ultimately deliver the results that our criminal justice partners expect. It is fair to say that we have been knocked off course a little by the events of 2020 and, certainly, 2021.

I am afraid that I have absolutely no insight into what happened within those other two organisations, what they saw or their decision-making process.

I am conscious, Mr Beattie, of a conflict of interest from my previous role. However, I do not have any understanding of the commercial factors that resulted in those two organisations withdrawing at the final stage, although I know that it was very late in the day.

Did they withdraw?

They did not submit a final bid.

Were they eliminated as part of the sifting process?

There would have been an economic and technical evaluation of each bid, but there was no elimination. That is publicly available information.

When you put in your bid, were there any concerns at all about the affordability of the contract or your ability to deliver?

There was no concern. We believed that it was costed correctly, and that the solution was good and compelling. There were concerns about the data. There were some gaps in it where we had to make assumptions. It surprised us that the data regarding the times of non-court appointments was not available, so we had to make an assumption on that. There was a lack of data regarding a new element of the services for generation 3 of the SCCPES contract, which was the application of the rule that there should be two officers in certain cases, and because it was a new part of the service, there was no retrospective data. We had to make an assumption about the number of officers that we would need for that part of the service.

A good example is that, based on the operations that we deliver in other jurisdictions, we assumed that medical appointments, for example, would be scheduled for after the court-arrival phase. That was our assumption, based on the fact that all parties are focused on delivering justice. However, the operational reality is that 46 per cent of medical appointments are scheduled before 10:30. That means that the resources that are dedicated to taking people to court are reallocated and redeployed to those medical appointments. That points to a very difficult strategic issue: is the priority for GEOAmey resources the delivery of the court recovery plan, or is it the medical requirements of the ageing and increasing prison population? That is a good example of the change in environment that the Auditor General referenced in his report.

The contract started in January 2019, so you had a year or so before Covid impacted to bed it in. How did that first year go?

It was a difficult mobilisation and transition period. It is a challenging contract—a very challenging contract. The issues that we had were not unusual at all. We had issues surrounding training, using our new systems and our officers getting their heads around going from the G4S system to the GEOAmey system. There was a bit of a backlog as a result of that, and we needed to do some catch-up work on the data.

Our systems found it difficult, from a planning perspective, to accommodate all the different elements of the service. The other contract that we manage is more focused on court, as opposed to the additional activities that are associated with non-court and bed watch services. However, we overcame them. As I said, going towards quarter 4 of 2019—October, November and December—and into the two months of 2020, before Covid, I would not say that things were completely bedded down. However, we were there or thereabouts with the contractual performance, and we were there or thereabouts with the results from the contract. Then, obviously, everything changed completely.

Do you have one other contract, south of the border?

That is correct.

You seem to be telling us that south of the border the service involves court cases and court attendance only, whereas the contract that you took on in Scotland includes hospital appointments, funerals and all the things that go with those. Is that right?

That is correct. The contract is much broader in Scotland, and its terms are much tighter.

Presumably, when the contract was being drawn up, you took all that into account.

Absolutely.

10:45  

At what point did you deduce that things were going badly? In other words, when did the impact of Covid hit, initially, and how did you respond to that?

In effect, our people were regarded as essential workers. They did not have time off.

A number of adjustments were made to the operating model throughout Covid. Prior to the Covid period, justice was purely physical. People appeared in court. Very quickly into the Covid period, we moved to virtual court hearings. We moved from the physical to the virtual. As the Covid pandemic extended, we started to do more physical delivery. At that point, we were operating a dual approach to our services: they were both physical and virtual. As we came out of the pandemic—certainly, into the end of 2022—we were, in effect, back to 100 per cent physical. Throughout that period, my team of people was as affected by Covid as everybody else.

Before I turn to Graham Simpson, I reflect on something that Gavin Redmond mentioned: the unforecast rise in the number of medical appointments and the strain that that brings. In opening, Mr Jones, you mentioned that you had watched—or read, anyway—the evidence that was given to the committee a couple of weeks ago by His Majesty’s chief inspector of prisons. She told us about potential risks through human rights-based challenges, because of the denial of people’s basic human rights, including to things such as access to medical services. Have you as a company considered that? For example, do you consider that you as a corporation could be at risk as a co-nominee in any challenge that is based on human rights?

We have looked at that, of course, but we do not believe so. I put that on the record. Clearly, it is an emotive issue. We understand that fully. We accept that we need to do better in ensuring that transportation is available for people who need to go to hospital.

I point you to some of the recent improvements that have been made since the intervention and the recalibration of the contract in Q3 last year. Effectively, we have moved our percentage on non-court punctuality from the low 60s to the low-to-mid 80s. I say very clearly that even one appointment failure is one too many. I concede that and accept it fully. However, we are trying to address the operating environment changes that we have talked about extensively since I opened my evidence. There is a need to recruit more people. It is going to take us a little more time to get there. While we have all those competing factors and reduced officer availability, it will be some time before we are at an acceptable level—which means not failing in any hospital appointments.

You appear to concede that there may be a human rights-based case, but your position is that, as a company, GEOAmey has no liability. Is that correct?

I am not sure that I concede that. I said that we do not believe that there is a case to be had. The reality is that we are not a state actor. We indemnify the SPS against a number of failings, but that indemnification is monetary. The human rights obligation sits with the state actor, not the private company.

Okay. We are not going to rehearse a court case here, so I will move on.

Mr Jones, you say in your letter to the committee that GEOAmey is making a financial loss on the contract. How much of a loss are you making?

If I may, I will bring in James Huntley on that question. In the five years for which we have operated the contract, we have made an operating loss of £7 million.

Gosh! How is that sustainable?

It is not sustainable. James—would you like to come in?

Thank you.

As David Jones said, during the first five years of the contract, there has been a loss of circa £7 million and a negative cash flow of £11 million. As was referred to in the report, the SPS acknowledged that the contract was not financially sustainable, which is why we entered into negotiations to try to put it on a solid footing in order to give us the opportunity to deliver the service that we want to deliver. That has brought things to a better position. It is still a loss-making contract, although that is the case to a substantially smaller degree. We are only a few months into the new arrangements, but the run rate is more like £1 million a year. I say that as though £1 million is not a substantial amount of money: of course it is, but that is a much better position than we were in previously. That is a step forward, but there is still a challenge.

There are two elements to that, for us. One is that we ensure that we are able to cover our cost base and pay our officers, and the other is that we deliver the service such that we meet our contractual obligations and avoid service penalties. The deputy convener referred to the amount in penalties that we have incurred so far on the contract.

No company can continue making those sorts of losses.

No, absolutely—which is why we had extensive discussions with the Scottish Prison Service about what we could do to address the problems. However, as my colleagues have referred to on a number of occasions, the solutions do not sit with one organisation. We have to come together with the SPS, the Crown Office and Procurator Fiscal Service, the SCTS and the police to come up with the right solutions.

The starting point for us is to ensure that we deliver the service. At the same time, in the background we need to improve some contractual matters. Our approach as a company is that we deliver the service and that, on the back of that, the contract should perform better from a financial point of view. However, we must address some intrinsic issues, such as competing demands and the situation in which the same resource is needed for two things at the same time; that is, Gavin Redmond and his team having to make impossible decisions about whether to fail to get a person to a medical appointment or deliver a person late to court, because they do not have staff to do both.

Could you see yourself getting to a point where you say that you cannot continue with that?

I cannot see that.

You cannot see that.

I cannot see that, Mr Simpson, no. There is a degree of confidence that we will get the contract back into a marginal profit situation this year. In effect, we have two years left of the contract.

In your letter, you say:

“It is, therefore, our firm belief that we can deliver prisoner escort services to a high standard”

You go on to say that that will be

“when the environment is supportive, and system-related issues are resolved.”

What are you basing that on, given what we have already heard and that you are making colossal losses?

We are basing that on the fact that our losses are less than they were. Our forecast is that the situation will improve further as the year goes on; the indications are that that will be the case. We are still paying substantial penalties, because we do not have enough staff to cover all the services. As our staffing profile improves and officers are available to fulfil the demands of the criminal justice partners, the costs that we are incurring, which are, in effect, equivalent to the losses that we are making, will disappear.

Okay.

We are confident about that.

I am sorry—I will take a slight side step, if I may, and provide technical operational insight. This is not a technical issue for GEOAmey. We deliver the services to an exceptionally high standard. In another jurisdiction where we operate, 98 per cent of people get to court on time. We are using the same operating model, the same competency of people, the same fleet and the same systems. This is not a technical issue; the big difference in the environment is the multi-agency approach that the Auditor General referenced in his report.

I will add one point in support of Gavin’s response to the deputy convener in respect of staffing being a key issue. We have had staffing challenges with our other contract, as well. I acknowledge that that has not happened to the same extent, but we have been significantly below our target operating model. At the same time, we have had volumes of work at about 120 per cent of what we expect. However, our service, with the exception of a couple of small periods of challenges, has been really strong, as Gavin mentioned.

We know what we are doing, and we have the competency, skills and systems to deliver. However, if we are being asked to deliver three tasks for the same person at the same time, that is an impossible situation for us to be in. That is the critical thing, from our point of view.

We have touched on staffing, which is clearly a key issue. We have also mentioned pay and the pay gap between what you pay and what others pay. Are you seeking to rectify that? Do you think that you will have to increase your levels of pay?

The accommodation that we reached last year with the SPS helped enormously; there is no question about that. Our low point was quarter 3 of 2023. The chief inspector of prisons for Scotland actually used the term “shocking” when she referred to that in her evidence to you. Unquestionably, that was the low point, and it coincided with staffing numbers reaching their nadir. Around September last year, there were about 515 officers. That coincides with what the chief inspector saw with regard to the level of services.

I make it clear that, since the injection of additional funds from the Scottish Government, every penny has flowed through to the officer community of GEOAmey. We have had an uplift in our officer availability. In a relatively short period, we have gone from that low of 515 officers to more than 600 officers. Our projections are that, come Q3 this year, we will be at around the 650 or 660 mark, so we will be at, or close to, our target operating model of 670.

We have just concluded the pay negotiations with the Community trade union for a further uplift in officer pay from 1 May, which we expect will act as a further boost to our recruitment efforts and market attractiveness. That will sustain the increases in officers that we are recruiting into the business and get us to the numbers that I have just shared with you for Q3 this year.

What is the pay rise?

It is an increase of 6 per cent, which takes the wage to £13.25 an hour.

There will still be quite a gap between what you pay and what others pay.

There will still be a gap. Irrespective of whether the SPS, Police Scotland and other members of the criminal justice system have more attractive pay offers and larger packages than those that GEOAmey can offer, not everybody wants to work in a prison wing—not everybody wants to do that job. However, we did a survey in 2022 of our officer community and everybody who was asked said that, despite the challenges that we have had, they love their job. Across the GEOAmey officer community, there is an enormous amount of pride in supporting the criminal justice system, and I take great heart from that.

11:00  

Your opening statement was very honest, and you apologised to everyone, but it is probably worth reading out some of the evidence that we have received. I do not know whether you have seen it—[Interruption.] I see that you have.

I was struck by the letter from Jennifer Harrower, the deputy Crown Agent, who describes a situation in which

“there were 16 family members or nearest relatives in attendance for a murder case which was due to call at 9.30 am. The accused was not delivered until approximately 5 pm. This had a significant personal impact upon them.”

That is just one case.

We have also heard about people not turning up for video identification parades. The chief constable refers to that in her letter, but that particular murder case sounds absolutely dreadful. I presume that the case did not even go ahead, because the accused was delivered so late.

You are keeping people who will be in an emotional state hanging around all day. That is just not acceptable, is it?

You referred to my opening statement, which was purposely worded to recognise the human impact of the delays that we have caused in the system. All that I will say for the committee’s consideration of the causes is that it is the case that we have not had the appropriate number of people, but we are also having to deal with an operating environment in which there are conflicting requirements on our resources.

To give you an insight into that, I point out that every single day we have to collect between 300 and 500 people in a two-hour window to get them to court. That involves arriving at the establishments, going through the security protocols and ensuring that processing of the individuals whom we are collecting is correct. There is a formal transfer of responsibility for legal custody from one agency to another. The vehicle departs, and the individuals are booked into the court process, all within a 120-minute window.

As Gavin Redmond said, we now have conflicting demands in that we are, in effect, being asked to deliver 45 per cent of all hospital appointments at exactly the same time as all that other activity is going on. Those 300 to 500 people are going from all the prisons and police stations to all the courts across Scotland. That is an enormous undertaking in a very small window of time. I am afraid that we have, because we have not had enough resource, had some slippage, which has led to the catastrophic delays.

I am pleased to say that those delays are no more. I am not saying that we are perfect by any means from an arrivals perspective, but, fortunately, such incidents are very rare.

It is important to recognise the example that Mr Simpson gave, which was, frankly, horrific. I can give you the assurance that my team and I are focused on the people element of this; even with all the logistics complexity, we are not losing sight of the people element that is attached.

David Jones referenced the length of delays. Similarly, I can give you assurances that delays of that magnitude are not inherent, as they once were.

Similarly, we have gone from facilitating roughly 40 per cent of VIPERs in November 2023 up to 96 per cent in this quarter of 2024, which means that the vast majority are being facilitated. We have a long way to go—there is no question about that—but we are trending in the right direction.

I will ask about one more thing. In your letter, you appear to suggest that part of the problem is that prisons do not have prisoners ready on time for you. In other words, you are blaming the prisons. Is that correct?

That is correct. That is, as the Auditor General states, part of the requirement for a multi-agency approach to dealing with issues and resolving the problem. We experience delays in prisons daily. People are not ready when we require them to be ready: that is a matter of fact. Indeed, only a couple of weeks ago, we recorded 60 hours of delays due to prison establishments readiness being outside our collection windows. The impact is not insignificant.

However, I am going to balance that view completely. There was a time when our punctuality was such that people in prisons were ready but our vehicles were not there. We have to build up a degree of dependability for prisons to have the confidence that our vehicles will turn up when we say that they will turn up. I have to say that that is more and more the case now, but there is a lag, and we are in discussions with the SPS about closing that gap.

Given the relatively small window that we have every single day to get all those people to where they need to be, it is incredibly important that there are no delays in the system. There is no space for delays. The complex logistical challenge that we undertake each day must be accommodated and facilitated by the people who are responsible for having the prisoners ready—that is, the police and the Prison Service.

Mr Jones, I want to ask you about another piece of correspondence—the letter that was sent by Cat Boyd of the Public and Commercial Services Union to the Cabinet Secretary for Justice on 14 December. I am going to go into a new area that we have not covered, because I am looking for your response to what is said in that letter.

The bit that I want to concentrate on—I am sort of looking at Mr Redmond here—is the communication element. In her letter, Cat Boyd from the PCS, on behalf of her members—that is, people who work in the court service—makes criticism of the

“Lack of communication/accurate communication. If custody hasn’t arrived in the building it is very difficult to find out where they are”

or an estimated time of arrival. She also says in the letter:

“GEOAmey will unilaterally put courts down when they do not have enough staff to cover them. This is usually done without consultation”.

How do you respond to those charges?

I acknowledge the sentiment and emotion that are attached to the letter. For what it is worth, I share my officers’ sympathies on a lot of what is covered in the letter; they have been put under an incredible amount of pressure and duress.

Given the dynamic nature of the operating environment, which we have discussed, and the low number of vehicles and officers that are available to transport people, we are in a horrible situation in which the capacity of our fleet and people does not meet demand. That is creating this horrible logjam, which is making it difficult to predict when people will arrive at court. I absolutely agree with the correspondence, in that respect.

As for our making unilateral decisions to “put courts down”, I have to respectfully challenge that. Indirectly perhaps, the lack of GEOAmey resource can lead to business being delayed or having to be heard without GEOAmey officers.

Nevertheless, I think that it is important to acknowledge the sentiment in that letter. As I have shared, I have similar sympathies with my own people, who are being put under incredible pressure and are having to work longer.

Is it up to individual crews to phone ahead to the court and say, “We’re going to be eight hours”, “We’re going to be two hours delayed” or “We’re not going to make it today at all”, or do you have some kind of central operational hub from which you make those calls?

It is a bit of both. In periods of difficulty and real stress, communication is often something that falls behind as people focus on operational delivery. I acknowledge the need to communicate better; indeed, that is something that I would absolutely commit to going away with and taking up with my management team. If we are delayed or we are not meeting expectations, the least that we can do is front that up, communicate it and give some kind of idea of when things will get back on track. I would accept that.

Okay. You will see—and I will direct this question to Mr Jones, too—that this is fomenting a view, certainly among PCS members, that GEOAmey should not be part of the equation at all.

I understand that fully. On that particular point, perhaps I can expand on what Gavin Redmond has said. You are right: there should be a blend here, with people phoning in. There are no—absolutely zero—excuses not to communicate. That is just not right, and I am sure that Gavin Redmond will deal with that.

Just to support that, we are making further investment in our systems and upgrading what is called our Microlise system so that it effectively automates messages about arrivals not just for courts but for all members of the system. I hope that that particular item will be supported by a level of automation going forward.

I absolutely accept that members of the PCS—members of the criminal justice system—will have a view that we should not be part of the equation. What I would say in response is that we are the face of failure. It is a GEOAmey officer who turns up late, his badge is emblazoned on his uniform, and all the people who are receiving the service can see that that organisation is failing.

What I have done is try to explain—I hope that we have set this out in our written evidence and in today’s oral evidence—that things have changed to such an extent that it is very difficult for us to perform to the required level. There is widespread recognition that a multi-agency approach will be needed to fix some of the inherent issues that we have talked about—for example, the prioritising of non-court appointments simultaneously with and at exactly the same time as the peak activity in courts. Delays with collections happen mainly in prisons, but also in police stations.

Those kinds of issues need to be ironed out to give us a fighting chance of getting somewhere close to our operating model and the number of available officers performing to the required standard. If we get to that position—and it cannot come a day too soon from my, and our, perspective—we can start to work on our reputational issues across the criminal justice system, and people can start to see what we can do. As I have said—and as I think that we have conveyed—we do this sort of thing very well elsewhere. We have the skills, technical competencies and systems to do it here, too.

I have a couple of quick questions before I invite Willie Coffey to wind up the session.

In answer to Graham Simpson’s questions, you mentioned that the new hourly rate of pay from 1 May this year would be £13.25. At the point at which the chief inspector described the situation as being “shocking”—that is, presumably prior to October 2023—these heroic front-line staff would have been working through the pandemic. What was the hourly rate of pay back in 2020?

I think that it was £10.76.

In 2020, the hourly rate was £9.85.

Wow.

11:15  

I will provide some context for our pay. As you can imagine, there are contractual terms around indexation each year. In the first four years of the contract, cumulatively, we passed on more to our officers than we got in receipt from the customer in order to support the pay as much as we could. Obviously, we all know that there has been a dramatic increase in the level of the national minimum wage and the Scottish real living wage. If we paid staff as per the contractual index, we would be paying them below the Scottish real living wage, which would not meet the Scottish Prison Service’s requirements. The rate would be only about £11.84. That is why the recent injection has been so valuable.

However, there is still a significant gap between our pay and that of the Prison Service. The inspector of prisons referred to the fact that we face challenges in retaining staff when Police Scotland and the Prison Service go through recruitment periods. We are very aware of that. In our written evidence, we mentioned that there is a gap of circa 40 per cent between our pay and that of the Prison Service.

I want to take the opportunity to clarify the basis for that calculation. We looked at the specifications for the roles at band C and band D in the Prison Service. Given that he has some hands-on operational experience, Gavin Redmond helped with that. We have discussed the issue with the SPS over the past 18 months or so, and it is our general feeling—the SPS might have a different view—that the role of our officers combines the skill sets of a band C role and a band D role, so we pitched the pay rate in the middle of the range between the two bands. Therefore, the 40 per cent gap relates to the third-year pay rate for a blended C and D band. The exact number is 43 per cent, but we did not want to be too explicit in our written evidence.

Okay, but you have said that, back in 2020, the hourly rate of pay for your officers—throughout today’s proceedings, you have called them “officers”, which conveys a certain level of status to them—was less than £10. You might be surprised, but I am not surprised, that people would leave in droves if they were given opportunities to find work that paid more than that, given the kind of job that this is.

I presume that, when you put in your tender document, it was based on a forecasted hourly rate of pay, which, at the time, I can only assume, was also less than £10 an hour.

Correct. The bid would have been based on information about what the pay rates of the previous incumbent were when the staff were transferred across under the Transfer of Undertakings (Protection of Employment) Regulations. We would have based it on that data.

In relation to pay rates, it is important to note that, when we entered the pandemic, we had circa 700 officers, so we were above the level of our target operating model. We came out the back end of the pandemic with fewer than 600 officers. Our officers have to go through a challenging six-week initial training course, which includes control and restraint training. Obviously, that involves physical contact. During the pandemic, when there was social distancing, that was not able to happen.

We recognised that challenge, but, after the pandemic, two things happened—in fact, three things happened. First, we had the cost of living crisis, which everyone was impacted by. Secondly, it was generally expected that one impact of the pandemic might have been substantial unemployment, which would have meant a greater availability of people in the employment market. In fact, exactly the opposite happened, and the number of vacancies now outweighs the number of candidates. In addition, there has been an unprecedented increase in the level of the national minimum wage. All those things have combined.

As Dave Jones has said, we are exceptionally proud of the work that our officers do, and we recognise that the rate is not what it should be for the role that they have. However, the difficulty that we have—Mr Simpson referred to this earlier—is that, although we have tried to do our best by paying above what we get back in, we cannot bridge a gap of £5 million, £6 million or £7 million in the pay rate. We are not able to facilitate that, and I do not think that anyone would expect us to, either.

May I add just a little?

A little.

I am very conscious of the time—I really am.

Over the nearly eight-year period in which G4S had stewardship of the contract, the pay rate went up by £1.08, I think. Without the injection of the money from the Scottish Government last year, we doubled that in the four years of the contract up to that point. We have done our damnedest.

Okay. I will ask you one quick question, to which I hope to get a quick answer before I bring in Willie Coffey.

I will do my best.

It has been a bone of contention, certainly in the past, that your rates of pay on the contract in England were more than your rates of pay on the contract in Scotland. Is that correct?

It is correct.

What is the current position?

The current position is that there is parity.

Okay. That is fine.

Good morning to—

I need to clarify that. Both are out to ballot, so I may be giving you the impression that it is a done deal.

Okay. I take it that staff do not have a no-strike clause.

They do not.

Also, the parity refers to the average rate. There are a couple of different rates in England and Wales.

Okay. Fine. If you want to furnish us with more details on that in writing afterwards, that would be helpful.

I have a few questions. I want to go back to the contract for a second. David Jones, you told us that some of the challenges that you faced meant that you were taking 38 per cent more prisoners to the High Court, 44 per cent more prisoners to solemn cases and so on. Were the numbers of prisoners that you were dealing with not specified and agreed in the contract itself? If you are being asked to deliver more and more, without agreement, how can that be regarded as a contract failure?

You are correct, Mr Coffey, that one of the difficulties with the contract is that, in effect, demand is uncapped. From a contractual perspective, that is correct. From the perspective of operational reality, it is impossible to operate a contract with such an unlimited position. It simply was not contemplated in our negotiations with the SPS—although this is not reflected in the contract—that we would have a situation in which there would be numbers of the order of magnitude that we have described this morning that would change the operating environment to that extent.

Nevertheless, your company was fined—we call them “service credits”—for not being able to deal with huge increases in the numbers going to court.

That is correct.

In a nutshell, yes.

Are those numbers tailing off post-Covid?

Do you mean the penalty numbers or the numbers going to court?

Both.

The penalty numbers are tailing off. The numbers going to court are not.

There has been some recognition from all the parties that, with the increase in the volume and the challenges that we have with staffing, we are looking at the targets that we have for on-time delivery to taper up across a period. However, the tapering up of a commercial target or a contract target just means that we either hit or miss our contractual target. The most important thing is that we actually improve the underlying service to our partners—to SCTS in this case. The key thing is that we work together with our partners—the Prison Service and other partners—to ensure that we get more than one in two people to court on time every single day. That is the most important thing, so that we can help to be part of an efficient service. That is what we want to achieve.

Those additional numbers have had a huge impact on you. Did you try to vary the terms of the contract at any point, given that it is quite clear that what you have been asked to do has far and away exceeded what we might reasonably have expected you to do?

From mid-2022 through to October last year, we were in extensive and intensive discussions with the SPS—and, by proxy, our criminal justice partners, because the SPS represents partners in the multi-agency liaison group—about difficulties concerning the contract, its sustainability and what needed to be done to ensure that we could see out the remaining term of the contract and have a fighting chance of delivering the level of service that our criminal justice partners expect.

Did that involve agreeing what the numbers might be, with some variation above and below that level, rather than nothing being said about the matter and just having to cope with the numbers?

That is correct. The contract has been recalibrated—that is the term that has been used.

I will give a practical example. There is no expectation or understanding that there will be a cap on court demand, because that obviously depends on what happens, but one term of the new recalibrated contract is the cap on our bed watch obligation. Bed watch is a very labour-intensive service that we provide. Our obligation is currently at 13, and the cap is at 14, in relation to our headcount numbers.

Why is that important? Previously, there was no cap in the contract, so if we were sat at 16 bed watches—the number could be higher; it could be 20—in addition to having to staff more bed watches, we had to keep aside extra staff in case the number went to 17, to 18 or higher. That meant that six to 10 crews were kept aside for that potential increase when they could have been deployed for a hospital appointment, for example. Now that we have the cap, we do not have to keep people on the substitutes bench to bring in, if required. That relatively small change has had quite a material impact on the service.

The cap on demand for bed watch, which James Huntley has described, has been a fantastic help—there is no question about that—but there is no cap in any other area of service. It is really important to clarify that. In the negotiations, we tried to get that cap for reasons of reasonableness, as you would expect, so that we could meet expectations. That is the key point. As things stand, such caps are not prominent in contracts.

We understand that court activity cannot be capped, because justice has to be served, but it would be exceedingly beneficial if we could smooth the demand for non-court appointments. If there is a really high number of non-court appointments, such as hospital appointments, on a Monday, which is our busiest day for moving individuals to court, we are just exacerbating the problem. If we cannot have a cap, let us work together to try to smooth demand, which would mean that we could deliver a better service for everybody.

I think that I understand that.

Financial support has been mentioned a few times. The SPS gave GEOAmey £6.3 million between April 2020 and June 2021. Was that for furlough support or for wages?

It was for wages. The SPS was keen for us to ensure that our officer community would be available when we came out the other side of the pandemic, whenever that would be—of course, at that time, nobody knew when that would be. That was coupled with the fact that we were regarded as essential workers, so people were still working. That level of support allowed us to bridge the gap between our costs and the revenue that we received from undertaking what little services we provided at that time.

That was, in effect, a one-off payment, was it not? That is not sustainable.

During the pandemic, we had a couple of different mechanisms in place. Fundamentally, we wanted to ensure that, when volume dropped, we could still pay our direct officers and first-line managers and could cover their costs. The new recalibrated contract includes different terms, but it is on a similar basis. That means that we will not be penalised if volume moves and the contract no longer reflects the current environment.

Did GEOAmey pitch in with any additional financial support for wages, or was it just the Scottish Government?

The money for the uplift and the rates that we referred to in relation to the increase to £13.25 an hour, subject to ballot, came directly from the Scottish Government. As David Jones said, every penny of that has gone to the officers, and there are mechanisms in place for the SPS to have the data to support and audit that.

Specifically on the labour rates that we are talking about now, no, they are not sustainable, but we have made additional investments—you will have heard me speaking previously about pay rates above the indexation on the contract. We also invested in some additional layers of first-line management, which involves not back-office people but people on the ground in the court complex, in order to provide more support to our operation. We have spoken about the challenges in the employment market. We have made quite a heavy investment in recruitment teams in order to try to address the issues that we have in staffing.

I have one final question. David Jones, can you tell us what your current level of performance is and whether you consider that that is having a more positive impact on service delivery in the justice system?

There is no question but that our service performance has improved over the past few months. It improves in direct proportion to the number of officers that we have available, so we expected that to happen. However, we are nowhere near what the base contract level performance needs to be. Our performance on arrivals is in the low 70s, which represents a rise of 10 per cent; for VIPERs, which we have given you some numbers on, it is in the low 90s; for hospital appointments, it is in the low to mid-80s, so we have a long way to go on that one; and for bed watches, it is effectively at 100 per cent, for the reasons that we have discussed. There has been tangible movement on virtually every element of the service apart from one that will not be felt as an improvement on service, which is the arrivals for SCTS. I think that it is fair to say that that is the only part of the service that is yet to receive a tangible improvement, and that is what Gavin Redmond is currently working on.

Thank you. We are right up against the clock, and I think that we have broken any cap that we might have set ourselves, so I will draw proceedings to a close at that point. I thank David Jones, James Huntley and Gavin Redmond for their evidence and for making themselves available today; we very much appreciate that and wish them well in the future.

We will now move into private session.

11:32 Meeting continued in private until 11:36.