Ministers dramatically stripped private contractors G4S of running troubled HMP Birmingham and sacked the governor.
In a humiliating blow for the outsourcing giants, the Ministry of Justice officially triggered the “step in” process to take control of Britain's worst jail that has been run privately since 2011.
Six inmates have died inside this year, with former guards claiming it is "controlled by prisoners" with Victorian cells dangerously overcrowded.
In 2016 more than 600 inmates rioted at the 1,400 strong facility, which is one of five private prisons run by G4S.
The rescue plan will immediately see number of prisoners slashed by 300 and the current governor and senior management staff booted out after months of failure and violence.
Six inmates have died inside this year in HMP Birmingham
Last week the Chief Inspector of Prisons put HMP Birmingham on notice, branding it poor in all criteria including safety, respect, activity and resettlement.
Prisons Minister Rory Stewart insisted the move would not leave taxpayers out of pocket, but warned “drastic” action was needed and the Prisons Service would be in charge for at least six months. He said: “What we have seen at Birmingham is unacceptable and it has become clear that drastic action is required to bring about the improvements we require.”
The Ministry of Justice insisted that guards jobs were safe at the jail, adding: “HMPPS will work closely with G4S to ensure minimal disruption and to reassure staff of our mutual commitment to stabilising the prison and putting it on a sustainable footing.”
Ministers are braced for the Labour opposition to leap on the latest outsourcing blunder, with Jeremy Corbyn deeply opposed to the private sector running public services.
Mr Stewart insisted: “We have good, privately-run prisons across the country and while Birmingham faces its own particular set of challenges, I am absolutely clear that it must start to live up to the standards seen elsewhere.”
Last night G4S said: “HMP Birmingham is an inner-city remand prison which faces exceptional challenges including increasingly high levels of prisoner violence towards staff and fellow prisoners.
Managing Director of G4S Custody & Detention Services Jerry Petherick added: "The well-being and safety of prisoners and prison staff is our key priority and we welcome the six month step-in and the opportunity to work with the Ministry of Justice to urgently address the issues faced at the prison.”
Labour demanded the government urgently scrap plans to build more private prisons.
Shadow Justice boss Richard Burgon said: "This shocking situation underlines the dangerous consequences of the ever greater privatisation of our justice system.
“HMP Birmingham was the first publicly-run prison to be transferred to the private sector. This should be a nail in the coffin for the flawed idea of prison privatisation."
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