MPs have been told that a “significant misunderstanding” over emergency spending controls introduced to deal with a projected Ministry of Justice overspend of “several hundred million” pounds was to blame for an alarm call over the independence of the prisons watchdog.
HM Chief Inspector of Prisons Nick Hardwick, who left his post last week, had involved the justice select committee in a heated exchange of letters with the MoJ in which he detailed how a new spending regime would make him unable to commission qualified staff to inspect prisons without weekly permission from the ministry.
In the letter, Hardwick said the requirement – relating to the freelance expert associates who conduct inspections – would result in MoJ officials being given “day-to-day control” over the watchdog in a way that compromised its independence.
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But Ministry of Justice permanent secretary Richard Heaton told MPs that a lack of clarity on permissible expenditure had led to Hardwick's warning.
At a hearing this week to examine Hardwick’s concerns, Heaton insisted that there had never been an intention to curtail the inspectorate’s system of commissioning associates, and paid tribute to the outgoing chief inspector for his time in post.
The MoJ perm sec said that when he took up his current role last September, significant funding issues had come to light that prompted the imposition of emergency spending controls.
"We put them together in some haste, and it may be that the initial cut of the spending controls [wasn't] sufficiently clear, but I required all discretionary spend to be approved by the ministry," he said.
"In Nick Hardwick’s case that’s all non-frontline spend, so travel, external recruitment, back-office functions. There was a misunderstanding in that, I think, he was led to believe, or he believed, that he would have to come to us week after week to say ‘can I hire an associate to do this report?’ That is not the case."
Heaton said the inspectorate had subsequently been assured that it could hire the associates it wanted for the remainder of the financial year.
Indra Morris, criminal justice director at the MoJ, said the roles the inspectorate had been particularly concerned about were not consultants but contractors, and were fully compliant with the inspectorate’s “flexible-resource model”.
Justice committee chair Bob Neill pressed Heaton for further details on the MoJ overspend.
The perm sec replied: “At its peak – and it’s been coming down because of what we’ve been doing – it was several hundred million. I characterise it as an overspend, but it was more a failure to meet some savings targets and failure to meet some particulars of income targets. It was pretty substantial.”
Heaton said the issue was so significant that “the committee might want to return to it on a different occasion and to look in depth as to how we got here and the steps that we’ve taken to reverse out”.
The letter Hardwick wrote to Heaton and the committee in December can be read below. Former Metropolitan Police assistant commissioner Peter Clarke will succeed him as HM Inspector of Prisons from the beginning of next month.
Letter Dated 1 Dec Nick Hardwick to Richard Heaton