PRIVATEERS’ race to the bottom in running prisons “doesn’t work,” a top contractor has admitted. Sodexo justice services operations director Mike Conway said government contracts should be awarded with fixed budgets rather than having private bidders undercut one another.

“Instead of commoditising the prison market, that’s the path we should be going down,” he said on the fringes of the POA union conference on Wednesday night.

“If we end up going down that path in 10 years’ time … we’ll have very different consequences.

“We’ve got the challenge of trying to run prisons cheaply, both public and private, and we’ve found to our cost that doesn’t work,” he said.

Asked by a prison officer about private and public prisons competing to cut costs, Mr Conway said: “It’s not a costcutting race between the public and private sectors, it’s been a cost-cutting race between the bidders.”

The meeting was also addressed by G4S UK security and detention managing director Jerry Petherick.

G4S came in for fierce criticism last December after rioting broke out at HMP Birmingham, which has been under its control since 2011.

Mr Petherick insisted the riot was not down to a particular failure of his firm or the private sector, pointing to other disturbances in state-run jails last autumn.

“Unless we get the staffing profiles fully staffed, we’re always going to be up against it,” he said.

But HMP Bedford delegate Martin Field scorned: “Your purpose for being here is to make money. The purpose of us being here is to provide a service.”

Mr Petherick replied: “I won’t shy away from the fact that I have to look after my shareholders.”

He said the firm considered its investors as “stakeholders” alongside prisoners and staff.

“You’re kind of indicating that the only thing we’re worried about is profit,” he added. “That isn’t so.”

The bosses were also grilled by POA general secretary Steve Gillan for not recognising his union at a number of private jails, saying they had instead struck a “sweetheart deal” with another union, Community.

He challenged them to bring in multi-union recognition. “[Community] don’t understand the criminal justice system,” he said.

Mr Conway insisted it was “not a sweetheart deal” and he had been “very impressed” with Community.