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Procurement policy
PFI is forming a key plank of HM Prison Service's procurement of new prisons. Projects let under the PFI are on a competitive tender basis with a shortlist of suppliers, which are usually a consortium of companies providing bids to meet given output performance specifications. These will cover all aspects of building a prison, running it and meeting agreed targets. For example, they will cover the quality and provision of prisoner education, no escapes of dangerous prisoners, and the quality of food. Non-PFI schemes are let on a competitive tender basis. In 2001 a guideline was drawn up by the Contracts and Competition Group to help incorporate environmental standards in the evaluation of bids to design, finance, construct and manage new prisons.

Current and future projects
Over recent years, and over the next three years, investment in prisons will be driven by the drive to manage overcrowding, which has worsened, as noted in the HM Prison Services latest annual report (July 2002). The prison population rose to 70,000 in March 2000, 1500 higher than projected as recently as November 2001. Overall, the total population has risen far above projections since the start of the decade. In order to help deal with the growth in the prison population, the prison service was recently given an extra £177m of funding for 2002/03.

During 2001/02, the prison service construction units delivered additional accommodation costing £191m, a sharp rise on the previous year's total, and a reflection of the increased funding allocated in the July 2000 spending review. The £191m included a fast-track roofing improvement programme. The latest phase of the building programme led to an extra 160 new places at existing prisons. Foston Hall accounted for 20 places, and Lindholme 120. The only new prison to open in 2001/02 was Dovegate in Staffordshire, providing 800 places.

It seems certain that, with the prison population increasing, capital investment in expanding the estate will have to rise. Short-term plans include 180 places at Risley, and major extensions in Hull and Birmingham providing 780 places. In addition, two new prisons, to be built in Ashford and Peterborough, provide a total of about 780 places.

Essential information
By mid 2002, Her Majesty's Prison Service had close to £120m of capital expenditure committed to projects, and almost £100m authorised but not committed. Together, the total capital contracted and authorised was 50% above that a year earlier.

Although the investment increase announced in the July 2002 spending review was welcomed, with the prison population likely to exceed initial projections, capacity will have to expand further than expected. Recent reports suggest a population of 100,000 will soon be reached The best means of delivering this capacity remain open to policy judgement, although PFI seems to be the most likely route.