Even for those used to poring over prison inspection reports, the shocking descriptions of conditions at HMP Birmingham make for a difficult read. Rat infestations, unattended blood and vomit spills, and out-of-control levels of violence and drug use mark a new low point.

So deep are the failings at the privately-run prison that the government has been forced to bring it back in-house. Two flagship justice privatisations have now run aground this summer. The government cancelled the privatised probation contracts two years early. Despite a £500m bailout over the past 12 months, the contracted companies were failing to tackle reoffending. The Conservative Party’s addiction to privatisation and outsourcing is proving far too costly.

HMP Birmingham was the first publicly-run prison transferred to the private sector. That’s what should make this a watershed moment. The admission by the government that it needs to be brought back in-house to begin recovery is an admission of a wider policy failure. The Conservatives’ hope that the prison will be returned to G4S, the company running it, after six months is a sign of how this government remains soft on big business profiting at the public expense.

The crisis at Birmingham prison is not simply a localised one: G4S has failed across the justice sector. It has been forced to give up youth prisons after abuse allegations. Horrific treatment at immigration detention centres has been exposed. The security giant is still under investigation by the Serious Fraud Office for its role in an electronic tagging scandal that included charging for dead people. Its role in our justice system should have ended there and then.

But this goes much beyond the failings of just one company – it is the failure of an entire ideology. Before its collapse, Carillon was contracted to carry out prison maintenance works. Windows remained broken and toilets unusable, but it was still handed tens of millions even after ministers acknowledged it was failing to meet basic targets. The Sodexo-run Peterborough prison recently became the first women’s jail in years deemed to be insufficiently safe. Serco was forced to repay millions after scandals in contracts for tagging and, separately, escorting prisoners to court.

Nobody claims that ending the role of the private sector in our prisons is itself a silver bullet. Violence and self-harm are at record levels across the entire prisons estate, with an assault recorded every 20 minutes. The number of prisons labelled as being of “serious concern” is at its highest in years. Slashing hundreds of millions of pounds from prison budgets and the axing of thousands of staff with tens of thousands of years’ of experience are key drivers of this crisis. Without tackling those, many prisons will continue to underperform.

But ending privatisation is a necessary step in addressing our national prisons emergency. PFI-style schemes use money that should be used to keep our communities safe, not make multinational shareholders happy. And the lack of accountability that goes hand in hand with privatisation, as HMP Birmingham shows, makes a national plan for improving our prisons even harder to deliver.

After events this summer, the government should now announce a moratorium on all further privatisation in the justice sector. It should also undertake an independent inquiry into all current privatised justice contracts to ensure they are not failing those they are meant to serve and ripping off the taxpayer.

Instead, prison privatisation is set to be ramped up. The government recently announced plans for a new private prison and is considering up to four more. We even have a new justice minister who was once a chief spin doctor for Serco, the corporate giant with £3.6bn of justice contracts.

Labour has made it clear – including to those who wish to bid for any new private prisons – that in office we will end the discredited outsourcing of prison maintenance works, oppose the building of more private prisons and bring the wasteful PFI schemes back in-house.

I personally abhor the concept of incarcerating people for profit. Events at HMP Birmingham show that, beyond the moral argument, it simply doesn't work. It is time to end the Americanisation of our justice system and instead ensure that keeping communities safe takes precedence over making profits for mega-corporations.

Richard Burgon is Labour’s shadow justice secretary​