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Government to cut £1.8bn new build prisons

The £1.8 billion new prison building programme is under threat as justice secretary Ken Clarke is expected to announce heavy cuts to the £4bn prisons budget later today.

It is understood that security contractors now expect all five of the proposed new prisons, which were being procured under a £1.8bn framework, to be axed as Mr Clarke will outline plans to reduce the UK’s prison population.

According to reports in the Financial Times Mr Clarke is looking to shave in the region of £2bn from the £8.7bn ministry of justice budget, with the primary focus on the £4bn spent on prisons and the £2bn legal aid bill.

This move from the coalition Government is a dramatic shift from Conservative to Liberal Democrat policy. The Conservatives has suggested that they would stick with the previous Government’s plans to raise prison capacity to 96,000 by 2014.

Seven consortia are shortlisted for the £1.8 billion framework to design, build and operate the five jails.

They are Carillion/G4S, Interserve/Kalyx, Skanska/Serco Balfour Beatty/Geo Group, and Bouygues/Reliance Security Group, Laing O’Rourke/Mitie, and Wates/MTC.

Consortia that make the framework would have to compete to design, build and operate the prisons on 20 to 40-year PFI contracts.