Executive under fire for payouts to 'flagship' of prison privatisation

Hidden subsidies paid to the privately run Kilmarnock Prison by the Scottish Executive for domestic rates and staffing costs make up nearly 70 per cent of its profits.

In the last two years Kilmarnock Prison Services, a division of Premier Prisons, has received nearly £700,000 in taxpayers' money, according to research carried out by the Scottish National Party. Profits of £1 million were declared over the same period.

Rates of £413,000 were paid directly by the Scottish Executive on behalf of the prison over the two-year period. The rest of the £691,000, say Nationalists, went towards staffing the prison with Scottish Prison Service officials.

The revelation comes with the Executive under pressure to scrap plans to build three more privately run jails and close Peterhead Prison, which has been commended for its work with sex offenders.

Scottish Prison Service figures showed that, of 130 responses to consultation on the issue, only one - from a prisoner in HMP Shotts - was in favour of the plan. Those who responded included five Labour MSPs who were all critical of the proposal.

The costs paid for at Kilmarnock do not appear in the figure quoted by the Executive as the annual payment made for the jail, nor was the payment of domestic rates included in a parliamentary answer given by Justice Minister Jim Wallace when asked to detail any additional costs borne by the Executive.

John Swinney, the SNP leader, attacked the Executive over its financial management of Kilmarnock and the wider policy of prison privatisation. 'The Scottish Executive has been caught trying to cover up the true cost of private prisons,' he told The Observer. 'These hidden subsidies account for nearly 70 per cent of Kilmarnock's profit. In effect, the taxpayer has handing over nearly £700,000 as pure profit to the private operators of Kilmarnock in the last two years alone.

'Kilmarnock is the Executive's flagship private prison and is the model for their plans to privatise more of our jails. They are so obsessed with privatisation that they have been subsidising a private company's profits to the tune of nearly three-quarters of a million pounds simply to make it look more economic.

'The truth is that we cannot trust a word the Executive says. The costings for their privatisation plan have been exposed as fantasy and now we have the clearest example yet of profit being put before people.'

However, a spokesman for the Scottish Executive, claimed public funding of Kilmarnock had never been a secret and said there had been no cover-up. 'The Scottish Prison Service is legally obliged to provide and pay for the costs for staff they have at Kilmarnock to deal with matters of discipline, as a private employee is not allowed to deal with this type of issue. These staff also monitor that Premier Prisons abide by their contractual agreement,' he said.