The G4S Olympic security debacle and the west coast mainline franchise fiasco have put privatisation and outsourcing firmly in the spotlight again. And in recognition of just how toxic privatisation has become, government ministers have bent over backwards to try to convince people that this is not what they have planned for our NHS. There is one area of this free market jamboree that comes under less scrutiny, however: the steady sell-off of our prisons and justice system.

The justice secretary, Chris Grayling, has announced that five more public-sector prisons will be handed to one of three private companies next year. While there was some welcome news that G4S will lose the Wolds prison when the contract expires in July 2013, it still has HMP Birmingham – which in 2011 became the first public sector prison to be privatised – and four others.

The minister's statement makes it clear that not only are more sell-offs likely, but non-custodial functions in all public prisons will also be up for grabs in the coming years – allowing these private security companies to cherry-pick prison services.

It ought to be a national scandal that multimillion-pound global companies are being handed huge amounts of taxpayers' money to profit from locking people up by cutting staff and working conditions. We at the Public and Commercial Services Union (PCS) understand that the going rate for a return is a 7% profit.

But all this has happened without any public debate or discussion, and very little scrutiny. Opened under John Major's government in 1992, HMP Wolds was the first private prison in the UK, prompting the then Labour opposition to condemn the private sector running prisons as "morally repugnant".

Performance has been so poor that two were taken back into the public sector and in 2008 it was revealed that 10 of the 11 private prisons in England and Wales were in the bottom quarter of the Ministry of Justice's performance league table.

This has not deterred the march towards further private sector involvement. The five prisons now being privatised will make a total of 16 in private hands, holding around 12% of the prison population. This is a higher proportion than in the US. The PCS union believes this policy of incarceration for profit cannot continue unabated.

We are calling for a moratorium on all prison privatisation and for an independent review into all aspects of prison privatisation. This would look at things like the impact on prisoners' welfare in a profit-driven environment, where prison workshops are increasingly a source of income and have little to do with training and rehabilitation. It would also look at the real costs of delivering these services effectively and whether it really does represent value for money handing taxpayers' cash over to private companies, rather than run prisons directly. It would also examine the baffling tendering and costing process. It would consider the effects on staff and, importantly, the local communities where these prisons are based, as well as the fundamental moral issue of whether state punishment should ever be profitable.

These issues have never been discussed but it is essential that they are. The consequences of prison privatisation must no longer be allowed to continue unchecked.