Image copyright Getty Images Image caption An immigrant detention centre in Adelanto, California, run by the private prison company GEO Group

The US government said this week that it would reduce and eventually cease its use of private prisons.

"[Private prisons] compare poorly to our own Bureau facilities," Deputy Attorney General Sally Yates wrote in a memo to US officials. "They simply do not provide the same level of correctional services, programs, and resources; they do not save substantially on costs ... they do not maintain the same level of safety and security."

According to David C Fathi, director of the American Civil Liberties Union's National Prison Project, this memo represents a sea change in the attitude of the US government towards privatised corrections.

"This really is a historic reversal of the last 30 years," he says. "It's even more significant as a signal that's being sent and quite probably a harbinger of things to come."

However, while the announcement will have a significant impact on certain prisoners overseen by the federal government, this will change nothing for the vast majority of the US prison populace.

Here is a look at the immediate impact on the Federal Bureau of Prisons, and a glimpse of what may be to come.

Which inmates does this announcement affect?

Currently, the federal government contracts with 13 private facilities across the US, from California to North Carolina. These kinds of facilities are run by three for-profit companies: Corrections Corporation of America, Geo Group, and Management and Training Corporation.

All told, these private facilities hold about 22,660 inmates who will be affected by this announcement. That's a small percentage - 12% - of the total number of inmates currently incarcerated by the federal government.

Which inmates are not affected by this announcement?

Media playback is unsupported on your device Media caption Inside America's $2bn immigrant detention industry

The number of inmates who will be affected by this decision is a miniscule portion of the overall prison population in the US, which is estimated at 2.2m. The vast majority of these men and women are held in state prisons, not federal ones, and so the change in policy has no effect on them.

In addition, while this marks the end of the Bureau of Prison's use of private companies, the Department of Homeland Security's Immigration and Customs Enforcement relies heavily on private facilities to hold immigrant detainees - an estimated 70% of its inmates are in private facilities, about 24,000 people in total. Those detainees are not affected by this week's announcement.

In fact, while the population of the federal prisons is contracting, the number of immigrant detainees held under Ice jurisdiction is growing. Just recently, Ice approved a new, $1bn contract with CCA for facilities to hold the growing number of Central American asylum seekers in Texas. All of those factors make it seem unlikely that the Department of Homeland Security has immediate plans to cease using private prisons.

"It would be a heavier lift for them," says Fathi.

How will the federal government eliminate its use of private prisons?

Image copyright Getty Images Image caption President Obama became the first sitting president to visit a prison in US history earlier this year

As Yates noted in her announcement, the federal prison population has already shrunk over the last three years. This has freed up space to move inmates from private facilities back into government-owned facilities.

Nicole D Porter, director of advocacy for the Sentencing Project, says this is a direct result of changes made by President Barack Obama's Department of Justice.

"If steps hadn't been taken to reduce the scale of incarceration in federal prison there wouldn't have been the opportunity to phase out private prison contracts," she says. "This is all because of Obama's leadership and efforts."

There are fewer federal inmates entering at the front door thanks to former Attorney General Eric Holder's direction that low-level, nonviolent drug offenders should not be given automatic harsh, mandatory minimum sentences. And there are more leaving out of the back door, thanks to retroactive drug sentence reductions, which affected 46,000 inmates. The nation's historic low crime rate is also a factor.

"Assuming that the federal prison population continues to decline, then certainly it can be achieved ... Certainly within a ten-year period," says Martin Horn, distinguished lecturer in corrections at the John Jay College of Criminal Justice.

Some of that reduction is already happening. The DOJ memo says that a contract for 10,000 beds has been reduced to 3,600 beds at facilities in Texas. In New Mexico, a contract for a 1,200 bed facility was simply not renewed. The memo estimates the number of federal inmates in private prisons will be cut by 50% by spring of 2017.

Will the states soon follow suit?

Image copyright Getty Images Image caption Protesters gather in front of the GEO Group headquarters in Florida

State-level correctional facilities are a huge portion of the private prison companies' business. An estimated 94,000 inmates are housed in private prisons in the states.

New Mexico, Montana and Hawaii are among states that rely heavily on private prisons to hold their inmates. Some states do not use private prisons at all, including Illinois, Massachusetts and Nebraska.

Nevertheless, to end for-profit incarceration in the US, over half the states would have to change their current policies. Fathi says that state legislators may be swayed by the change in federal policy.

"The federal prison system has traditionally been looked to by the states as a leader in the field, as an exemplar of best practices," he says. "Once someone does it and the sky doesn't fall, and maybe some good things happen - saving money or a reduction in violence - then you see other systems coming along and following the model.

"I think that's what we're likely to see here."

Horn is more sceptical, saying that the concerns of the federal government do not always match up with those of the individual state legislatures.

"Most of the states that use private prisons are philosophically comfortable with it and are not going to be persuaded by this," he predicts.

Image copyright Getty Images Image caption Most inmates held in private prison are overseen by states

Is this the end of private prison companies?

No. Although the announcement from Yates caused CCA's stock price to plummet, Horn says these companies have already begun diversifying and moving into international markets.

He points out that MTC now runs most of London's probation system, under the name MTCNovo. CCA has a large real estate portfolio. Geo Group has moved into other areas of the corrections business by, for example, acquiring an electronic monitoring company in 2011.

Horn says he isn't even sure that the 13 prisons - once empty of federal inmates - will necessarily shut down.

"They may now turn to states and offer them more competitive pricing and it might make it more attractive to states to use these places," he says.

"Clearly they're going to try to find other customers for these facilities."