Privatisation of prisons has been driven by the perception that the private sector can do it more cost-effectively and save state governments money but the evidence for this is scant.
Whilst money is saved on salaries of guards and conditions in jails, company executives get huge salaries. CCA's CEO received $3.2million in 2010 and GEO's CEO received $3.5million.
The CEO of G4S, Nick Buckles, earned £13.7 million in 2011, which compares with "£215,000 paid out to families of employees killed or injured on the job" in the same year.
In 1996, the U.S. General Accounting Office reviewed five studies of private prisons and found no "substantial evidence" that for-profit institutions save taxpayer dollars. A more recent report commissioned by the U.S. attorney general notes that private prisons attempt to save money by cutting back on staffing, security, and medical care.
In Arizona, "the state’s own data indicate that inmates in private prisons can cost as much as $1,600 more per year, while many cost about the same as they do in state-run prisons". And this was despite the fact that private prisons often won't take the more troublesome prisoners:
Five of eight private prisons serving Arizona did not accept inmates with “limited physical capacity and stamina” or severe physical illness or chronic conditions, according to the state’s analysis... None took inmates with “high need” mental health conditions. Some inmates who became sick were “returned to state prisons due to an increase of their medical scores that exceeds contractual exclusions.”
A 2007 review of studies by researchers at the University of Utah found "Cost savings from privatization are not guaranteed and quality of services is not improved". A New Jersey Legal Review Committee found in 2010 that private prisons increased public liability and lawsuits, increased rates of escapes, decreased training for guards and increased violence at correction facilities: "Most objective cost studies show little or no cost savings to taxpayers coupled with an increased safety risk."
In Ontario, Canada, two identical prisons were built with one being run privately and the other by the state so that the merits of each system could be compared. PriceWaterhouse Coopers reported that the private prison had met its contractual obligations and performed adequately, however "the publicly run prison
performed better in the key areas of security, health care and reducing recidivism". Consequently, the Ontario government took over management of the privately run prison.
An Australian study found that despite assertions by advocates of prison privatisation, "There is no substantive evidence to support the claim that prison privatization would save money."
In some private prisons, cost-cutting and lack of guard training have led to dangerous conditions for inmates. For example, the East Mississippi Correctional Facility (EMCF) for severely mentally ill prisoners is described by the American Civil Liberties Union (ACLU) as "an extremely dangerous facility operating in a perpetual state of crisis, where prisoners live in barbaric and horrific conditions and their basic human rights are violated daily." Although the facility is supposed to provide treatment for inmates, there have been instances of rape, long-term solitary confinement, rat infestations, malnurishment, stabbings and beatings, delayed medical treatment and many suicide attempts, some successful.
In general, the staff of private prisons have less training than in public prisons and the rate of turnover is higher. This contributes to the higher levels of violence in private prisons. For example, "a United States Department of Justice study, based on a national survey of private prisons, reported that "the privately operated facilities have a much higher rate of inmate-on-inmate and inmate-on-staff assaults and other disturbances" than publicly operated facilities, when institutions of similar security levels are compared."
A Mother Jones article described CCA's Northeast Ohio Correctional Center in Youngstown:
Since it opened the prison in 1997, CCA had repeatedly demonstrated the dangers of allowing businesses to operate prisons for profit. The company staffed the facility with guards who had little or no experience in corrections -- and then imported 1,700 of the most violent inmates from Washington, D.C., to fill what was supposed to be a medium-security prison. CCA left metal equipment everywhere, which the prisoners quickly stripped and fashioned into weapons. During the first year alone, 20 prisoners were stabbed and two were murdered. The inexperienced staff resorted to tear gas and humiliation to keep order. Sick and injured inmates received inadequate medical treatment.