Prison budgets to be cut by £149m a year

Prison governors have been ordered to cut costs by £149m a year, in a move that is likely to create budget war between public-sector and private prison.

The measures are part of a programme designed to slash the costs of jailing a prisoner by £2,200 a year. Michael Spurr, the chief executive of the National Offender Management Service (Noms), has presided over plans which would mean that by April 2015 £900m, or 24 per cent, will have been cut from prison budgets since the Coalition came to power in 2010.

The Justice Secretary Chris Grayling wants to emulate the low-cost model adopted by the, supersized G4S-run Oakwood prison near Wolverhampton, which cost £15,500 a year per prisoner place to run – compared with £22,000 for an equivalent publicly run jail.

Under Mr Spurr's plan new savings will be found through the controversial “benchmarking” programme under which the budgets of public sector prisons are to be driven down to match selected private sector jails, it was reported.