A contract to build a 600 inmate prison won by Serco has been cancelled, the Ministry of Justice has said.
The proposed jail in Maghull, near Ashworth High Security Hospital, has been scrapped in the wake of plans for Justice Secretary Kenneth Clarke’s rehabilitation revolution and last week’s sentencing Green Paper.
Serco, the preferred bidder on the contract for the prison which was first proposed in 2007, has been informed, the MoJ said.
A Ministry of Justice spokesman said: “We will now look in detail at the sentencing frameworks for adults and young offenders, and the full range of penalties currently available to sentencers.
“We will also look to overhaul the system of rehabilitation to reduce reoffending.”
He went on: “We will consult widely before bringing forward more detailed plans for reform.
“Long-term decisions on prison capacity programmes will be taken in the light of future policy developments and a projected fall in the number of offenders in custody.
“We will ensure that we meet prison capacity requirements more efficiently to improve value for money for the taxpayer and contribute savings to help reduce the budget deficit.”
Mr Clarke has said the plans outlined in last week’s Green Paper could see the near-record prison population of more than 85,000 in England and Wales drop by 3,000 by 2015.