How Kenneth Clarke and Chris Grayling's failed commercial venture cost us the taxpayer over £1m
An extraordinary reportpublished by the National Audit Office today on " Just Solutions" - the commercial arm of the Ministry of Justice set up by former Lord Chancellor kenneth Clarke- reveals that taxpayers have lost over £1m on the failed venture.
Remember this was then promoted by Grayling so the Ministry of Justice could make money by selling prison expertise to regimes with appalling judicial systems like Saudi Arabia and Oman. It was closed down by Michael Gove when he became justice secretary after the election.
Now the NAO reveals that not only was this unethical but it actually cost the taxpayer money. Indeed one can see how desperate the government might have been to sign a £5.9 m contract with Saudi Arabia and further contracts with Oman - as this would have been the only way it could have made a profit out it.
Instead over four years from 2012 to this year it lost £302,000, £390,000 £317,000 and £141,000 respectively. leading to a £ 1,150,000 cumulative loss for the taxpayer.
And its scope was much wider than people realised with projects in Nigeria, the Seychelles, Libya, Estonia, Mauritius, Bermuda, the Cayman Islands as well as private study visits to drum up business in China, Bangla Desh, Turkmenistan and India.
As the NAO found; " The cost of setting up JSi exceeded the income generated by completed contracts. We estimate that JSi’s costs were approximately £2.1 million from 2012 until its closure, including £239,000 on consultancy services. Therefore JSi made a net loss of approximately £1.1 million in this period. This is due, in part, to the decision to withdraw from prospective arrangements with Saudi Arabia and Oman."
The report discloses that it had big plans for Oman.
"The initial proposal, Phase 1, was for a small piece of work to critique the plans of an existing prison and was valued at £98,000. This was expected to be followed by work to develop a new prison in Oman, Phase 2, valued initially at approximately £4 million but later negotiations increased this to £7.8 million. In addition, preliminary discussions were held in 2014 with the Omani government around a national training programme."
Grayling also spent £6500 fighting off a judicial review of its activities before the organisation was closed by Michael Gove.
This is all a far cry from the boasts in the Ministry of Justice six monthly report saying it was all contributing to the ministry's budget and supposed to be saving the taxpayer money. Instead it was racking up debts.
This a sorry tale for anybody who has a shred of ethics and thought Britain should not be helping regimes that flog and behead offenders. Bur the fact that it lost money doing it is a further damning indictment of the government and Chris Grayling.
As Meg Hillier, chair of the public accounts committee, said yesterday: "When Just Solutions International was closed down it had made an overall loss of £1.1 million despite a commitment that it would be self-funding by April 2013.
"Despite being a commercial venture, it generated less than £1 million income over three years.
"I am concerned by the loss of taxpayers’ money on this failed venture, and the Ministry of Justice’s ongoing work with countries with questionable human rights records."