Justice ministry contracts in England and Wales awarded to businesses and charities that will work with offenders

Two outsourcing companies, Sodexo and Interserve, are to be put in charge of more than half of probation services in England and Wales under the most far-reaching privatisation in the criminal justice system.

Chris Grayling, the justice secretary, said the companies, in partnership with rehabilitation charities, were the preferred bidders to run 11 of the 21 planned community rehabilitation companies (CRCs ) that will take over probation early next year. They will be responsible for more than half the probation staff supervising 200,000 low- to medium-risk offenders.

Four staff mutuals, which include employees of former probation trusts, are included in partnerships to run probation in London, Wales and the West Country. Seetec Business Technology Centre will provide probation services in Kent, Surrey and Sussex .

The contracts, worth £450m and due to be in place before the election, will hand over 70% of the work of the public probation service to private and voluntary sector providers as part of Grayling’s Transforming Rehabilitation programme. The public probation service will retain control of services for high-risk offenders.

Grayling said: “This announcement brings together the best of the public, private and voluntary sectors to set up our battle against reoffending, and to bring innovative new ways of working with offenders. In particular, I am really pleased that we will be deploying the skills of some of Britain’s best rehabilitation charities to help these offenders turn their lives around.”

The list of preferred bidders includes seven private companies, 16 charities and voluntary organisations, and four mutuals. The justice ministry said 75% of the 300 subcontractors named in the successful bids were voluntary sector or mutual bidders. The justice secretary said the fact that 80 bids were received from 19 organisations was evidence of a “strong and diverse market”.

Sodexo Justice Services, which already runs prisons, has been named as the preferred bidder in six of the 21 areas in partnership with Nacro, the rehabilitation charity. Interserve has won the bids in five areas as part of the Purple Futures partnership which includes the charities Addaction, Shelter and P3 and a social enterprise, 3SC.

The announcement of the preferred bidders comes as Napo, the probation union, is preparing to launch a judicial review of the sell-off.

The Ministry of Justice faces a disclosure deadline for the official “risk register” which assesses the public safety implications of the privatisation under the possibility of a High court injunction.

G4S and Serco, the private security companies, withdrew their bids after the Serious Fraud Office was called in to investigate overcharging of more than £100m on electronic-tagging contracts involving the two companies.

The Commons public accounts committee has established that the contracts included a £300m plus “poison pill” clause guaranteeing bidders their expected profits if the 10-year contracts were cancelled after the general election.

Sadiq Khan, Labour’s shadow justice secretary, said: “David Cameron’s government is putting companies with little or no track record in criminal justice in charge of dangerous and violent offenders.

“There has been no testing or piloting to see if this will work and won’t put the public’s safety at risk, and all of the concerns of Labour, experts and probation staff have been swatted away. It’s also unacceptable that ministers are going out of their way to tie the hands of future governments to multibillion-pound contracts for 10 years.”

Ian Lawrence, Napo’s general secretary, said: “It is purely ideological that Grayling is pressing ahead with his untried and untested so-called reforms to probation. We have mounting evidence that neither the CRCs nor the National Probation Service [are] stable at the moment and this is having a direct impact on the supervision of offenders and public safety. The fact so few organisations have won contracts also suggests that this has been a flawed competition with little or no real interest from providers in taking these contracts on.”

There was also disappointment that experienced voluntary sector providers such as the Home Group and Catch 22 were not successful.

Matt Robinson of Big Society Capital, the social investment bank, said: “The announcement of preferred bidders for probation services is very disappointing. We had hoped, and had worked hard to achieve, a much higher level of participation at the prime contractor level for charities and social enterprises, who would have brought their wealth of experience in knowing what works in tackling re-offending. Despite the rhetoric, the prime contracts now look set to be dominated by large private companies.”