The company that took over the running of HMP Birmingham last October paid a dividend of £23 million to shareholders despite seeing a drop in its turnover.
G4S’s profits for the year ending December 21, 2011, were up by 39.7 per cent to almost £32.5 million despite turnover declining by 9.9 per cent to £308.5 million.
Taking over the running of HMP Birmingham was one of the firm’s contract wins during the year, with the jail becoming the first publicly-run prison to transfer to the private sector.
G4S also opened a new prison in the Black Country – HMP Oakwood near Wolverhampton – though the £150 million facility was beset with problems after its opening in April, meaning just 45 prisoners occupied the 1,600-capacity institution.
Showers that turned on in the night, electrics that shorted when lights were turned off and a £7 million super-kitchen that was initially unable to produce food were among the teething problems. A spokeswoman for G4S said the new prison remained on track but admitted there had been difficulties.
“As with any new build of this scale there have been snagging issues,” she said. “We have contingencies in place to deal with these issues and we continue to steadily fill the prison. The issues have all been rectified and we remain on track to be at full capacity in the autumn. It opened on time and to budget and has a well-trained and committed workforce determined to make it one of the most cost-effective penal establishments in the country.”
Criticisms have also been levelled at HMP Birmingham since the company took over its running.
According to sources at the prison in Winson Green, there have been concerns about staff not being replaced when they leave. They also claimed staff shortages meant retaining control of the prison was “a challenge”.
One member of staff, who did not wish to be named, said morale was “poor” and added: “Quite a few people have left, either through natural wasteage or because they’ve had enough and they are not being replaced. With less staff there’s always a risk the balance of power can shift too.”
But G4S rebuffed the claims and maintained it was in the process of recruiting new staff. The company’s spokeswoman said: “G4S won the right to manage HMP Birmingham through a competitive process, which required all bidders to submit bids to produce efficiencies for the taxpayer, without compromising on safety.
“As with every prison, Birmingham has a rate of turnover of staff. This has remained comparable with the rate of turnover for the prison when it was in the public sector. It is not true to say staff are not replaced when they leave. We have a target staffing figure that we maintain.
‘‘We are in the process of recruiting 15 new prison custody officers at this moment.
“The prison has remained safe and stable throughout the process of the changeover. Performance has also remained stable, with Birmingham continuing to operate at level 3. A Home Office controller is on site, as well as the Independent Monitoring Board, who oversee conditions for prisoners.”
The financial year saw a number of losses for G4S.
It was unsuccessful in its bid to rebuild the Immigration Removal Centre at Dungavel in Scotland.
It also missed out on the deal for escorting asylum seekers in and out of the UK and the prisoner escorting contract for England and Wales.
Staff costs during the year were reduced by almost £40 million to £153,724,000.
The TaxPayers’ Alliance said it supported efficiencies in the prison system that benefited the taxpayer but G4S should be penalised if was not delivering what it had pledged.
“G4S has been contracted to provide a service to taxpayers,” said Robert Oxley, campaign manager of the Alliance.
“If it’s failing to deliver on those commitments then there should be penalties written into the agreement regarding the prison’s provision.
“Ultimately, taxpayers are paying for the firm to deliver safe and functioning prisons.
“If it isn’t doing so then the terms of the arrangement must provide sanctions for failure and termination if that is necessary.”