The Ministry of Justice spent £4m alone on creating a facilities management company to take over prison services such as cleaning and building repair work previously handled by collapsed construction giant Carillion, it has emerged.
The figure appears in Gov Facility Services Limited's first annual report and accounts, published on Monday, covering November 2017 to March 2019. The company was set up in 2018 to provide continuity of service after Carillion went into liquidation.
The report says the MoJ invested £4m 'to set up Gov Facility Services Limited as a stand alone business'.
The report, which comprises 102 pages, later says Gov Facility Services Limited received £17.3m from its 'parent', the MoJ Group. Of this, £4m was granted to spend on 'exceptional' costs when the company was set up. 'Exceptional' income included £724,000 on staff costs 'for people who were supporting the set up activities' and £734,000 for goods and services required to set up the company. The remaining £13.3m is treated as a capital contribution - described as the initial cash injection to provide the company's working capital.
Paul Ryder, chief executive, said: 'Our initial period of operation proved to be extremely challenging. The collapse of Carillion was unprecedented and had the potential to cause serious disruption to the safe and decent running of the southern prison estate.
'The service that GFSL acquired came with a number of challenges, it was not providing an acceptable level of service to HMPPS for the estate, a large backlog of work needed to be addressed, there had been a lack of investment in people and materials to carry out the work effectively. Staff numbers were insufficient and morale was low.'
In the 2018/19 financial year, the company completed 504 projects and a further 119 were ongoing. These included installing improved security such as CCTV, alarms and fencing, and improving 'decency standards' in cells, communal areas and showers.
As of 31 March this year, the company had 1,350 staff across 49 prison establishments in the south west, Kent, Sussex, Greater London and the east of England, and two corporate offices in London and Sheffield.
Agency workers represented 42% of the workforce in 2018/19, which 'has made it difficult to progress our aim for a technically proficient workforce'. However, the report says a new set of terms and conditions have been approved and 'we can now stabilise our workforce and convert temporary posts to permanent positions'.