US states seek to privatise prisons: Bad idea?

US states are set to privatise scores of prisons as they try to close gaping budget deficits, creating significant new markets for the industry’s biggest private contractors.

In Florida alone, 29 state prisons are set to be privatised. This represents the largest prison privatisation programme in US history, according to Tobey Sommer, an analyst covering the private prison market at SunTrust Robinson Humphrey, an investment bank based in Atlanta.

Arizona recently completed a string of public hearings on a plan to add thousands of privately operated prison beds. Last month Ohio announced plans to raise $200m by selling off five state prisons, though in the end it sold only one for about $73m.

Other states are expected to follow suit as private contractors pitch themselves as a solution to cash-strapped states’ fiscal woes.

The Florida plan has a new twist that Mr Sommer estimates could be emulated by other states hoping to streamline their budgets. Instead of outsourcing only newly constructed prisons, they plan to outsource existing beds as well. “This may be a blueprint to close other states’ budget gaps,” Mr Sommer said. more