Private prisons: Are they really cheaper, better and more accountable?

Victoria has recently committed to spending a whole lot more on prisons and corrections to accommodate its growing prison population. As Deirdre O’Neill, Valarie Sands and Graeme Hodge of Monash University report, Victoria relies more heavily on privatised prisons than anywhere else in the country, but lack of transparency makes it frustratingly difficult to tell whether privatisation has delivered on its promises of cheaper, better and more accountable. This post is based on their recent article in the Australian Journal of Public Administration.

In the recent Victorian budget the Andrews government announced that it intends to spend an additional $1.8 billion on prisons and corrections in 2019/20 to accommodate the State’s dramatically increasing prisoner population. A new maximum security prison, the biggest in the state, will be built near Geelong at an existing prison precinct that already includes Barwon Prison and the Marngoneet Correctional Centre. In addition, capacity of other prisons is to be expanded. The Government has not yet announced how the new ‘supermax’ prison will be built.

In the past, public private partnership models have been used, continuing a process that began in the 1990s with the Kennett Government’s prisons privatisation project. Three privately designed, financed, built and operated prisons were opened in the space of two years, ending the state’s monopoly on prisons. Subsequent governments preferred to use public private partnerships to build new prisons and opted in the main for public management of these prisons. The result, 25 years later, is that Victoria has a hybrid prison system – part private and part public – and has the largest proportion of privately managed prisoners in Australia, while Australia has the largest proportion of privately managed prisoners in the world. Nearly 40% of Victoria’s ever-growing prisoner population are housed in three privately managed prisons – Port Philip Prison, Ravenhall Correctional Centre and Fulham Correctional Centre.

This remarkable development arose from a belief that privately managed prisons would be cheaper, better and more accountable than those managed by the public sector. But has this really been the case? Our research suggests that the confident expectations that private prisons would deliver lower costs, improved service performance and enhanced accountability have not been entirely realised, and that the actual performance of the post-privatisation prison system in Victoria has been mixed to say the least.


Annual expenditure per prisoner in Victoria has increased considerably since the opening of private prisons and is now among the highest in the world, although a recent report by the Victorian Auditor-General into two of the privately managed prisons claimed that private prisons were up to 20% cheaper to run than publicly managed ones. While logic might dictate that this should be the case, we could not confirm this as the data upon which the claim was based is not publicly available. Even so, the same Auditor-General’s report cautioned against comparing the costs of private prisons against system-wide averages and public prisons, arguing operating costs of individual prisons are influenced by their location, age, size, physical layout, security classification, prisoner profile and their role or function within the overall corrections system. In the Auditor-General’s own words, ‘these differences make it difficult to compare costs on a ‘level playing field’’.


Turning to the issue of whether privately managed prisons are ‘better’, or more effective, the Productivity Commission’s authoritative annual Report on Government Services indicated that this too was not necessarily the case. Reporting on performance measures that serve as proxies for service quality, the Commission’s reports demonstrate that while some aspects of the prison system in Victoria relating to unnatural deaths in prison, employment in prisons and escapes from prison, had improved since the introduction of private prisons, this was not the case for assaults in prisons, hours out-of-prison cells, and vocational education and training opportunities for prisoners. Unfortunately, a comprehensive assessment of how the system has performed is not possible as the data for nearly all proxies we examined were incomplete.

More accountable?

These data deficits for performance indicators also have implications for the third improvement anticipated by privatisation advocates, namely improved accountability. But other factors affect the accountability of the prison system as well. Chief amongst these are the commercial-in-confidence clauses in the contracts between the private companies managing the prisons and the Government which thwart the public’s ability to identify contractual violations and any remedial actions taken. Accountability of the prisons system has also been hampered by the refusal of successive governments to appoint an independent Inspector General of Prisons similar to the role HM Chief Inspector of Prisons in the UK. Under this approach, an independent team of inspectors monitor key aspects of prison operations and report to a Victorian Inspector of Prisons, who then reports directly to the Parliament. This option has been considered and rejected. Instead, and unlike other jurisdictions, Victoria has persisted with an in-house monitoring and review process which lacks transparency and accountability to stakeholders outside the corrective services bureaucracy. While this model prevails and gaps in performance data persist, the notion that accountability has improved in Victoria’s privatised prison system will continue to be contested.

To summarise, Victoria is spending more and more on a prisons system in which rates of imprisonment continue to rise, and the prisoner population is increasingly characterised by mental health conditions, drug and alcohol issues, chronic illnesses, and over-representation of young prisoners, prisoners with disabilities and prisoners of Aboriginal and Torres Strait Islander background. In this ever more challenging and complex correctional environment, we simply do not know with any certainty if Victoria’s part public/part private prison system is cheaper, better and more accountable than it would otherwise have been, and we won’t know until all relevant data are made publicly available.

Source: Sands, V., O’Neill, D. and Hodge, G. (2019) Cheaper, better, and more accountable? Twenty‐five years of prisons privatisation in Victoria. Australian Journal of Public Administration, doi 10.1111/1467-8500.12384.