How public and private partnerships can transform rehabilitation management

Public-private partnerships (PPPs) are relationships between the public sector and one or more partners from the private sectors to deliver a publicly agreed outcome or a public service. These arrangements are most often used to provide improved infrastructure. Teams that work on these partnerships are responsible for serving not only the government and contractors’ interests, but also the community impacted by the performance of the project. The public sector’s strength is in delivering social policy objectives, but it often struggles to take the commercial risks that make social services better; conversely, the private sector is strong in taking and managing commercial risks, but often prioritizes profit over social outcomes. PPPs are most successful when there is a balance between these competing priorities.

Six years ago, the Victorian State Government in Australia sought a PPP proposal that could help to address two critical issues facing its prison system: high rates of re-offending by prisoners released from its facilities and a low number of in-patient beds for prisoners needing mental health care. With a deep knowledge of these arrangements, the EY team in Melbourne, Australia structured first-of-its-kind commercial arrangements between the government and a custodial operator to incentivize high-quality public services and reduce rates of re-offending. The result was the opening of the Ravenhall Correctional Centre in Melbourne.

Rehabilitating prisoners, inside or outside the walls, is not an exact science, requiring a trial-and-error approach that incurs costs with unpredictable outcomes. The EY team developed a payment arrangement in which the custodial operator and its partners are financially incentivized to reduce the re-offending by prisoners after release. The incentive is significant enough to encourage the research and development of new solutions, opening the door to a wave of new services and programs that can be designed, deployed and measured.

To address the issue of mental health, the team structured a custodial arrangement to build a maximum-security, 75-bed forensic mental health unit within the medium-security prison, doubling the capacity for in-patient services in the state of Victoria. Merely providing the beds, however, is not sufficient for effective care. The EY team developed a model in which the custodial operator is responsible for managing the facility and integrating a continuum of “step-up and down” care within a safe custodial environment, while the government provides the specialized medical staff to direct care for prisoners. This separation allows both parties to focus on what they do well and created a collaborative structure where one cannot succeed without the other.

While custodial operations are in their infancy, the EY team is deeply involved in measuring and evaluating operational performance through a broader role supporting contract management of the prison. As time provides more data, the team will feed this back into the system to improve the programs and drive the prison toward its desired social outcomes.

In PPPs, the EY team is serving the government, the operators and the community benefitting from its social outcomes. In striking the right balance between efficiency and care, this team has created a model for public-private teaming that exceptionally serves all three stakeholders and could fundamentally change how prisons and forensic health are modeled around the world.