Security firm G4S, which failed to provide enough staff for this year’s London Olympics, has lost its contract to run a jail in East Yorkshire, the Ministry of Justice said Thursday.
The firm will stop running the Wolds prison in East Yorkshire after its contract expires in July 2013, when the facility will move to public sector management.
G4S has also lost out in bidding for contracts to run prisons in South Yorkshire and Northumberland, the ministry said.
The announcement came as Justice Secretary Chris Grayling said that the cost of prisons was “too high and must be reduced.”
“We can do this by being more innovative and efficient, and without compromising public safety,” he added.
“That is why I have decided to take a new approach to how we compete prison services and reduce unit costs across the prison estate that will lead to better value for the tax-payer, linked to more effective services to reduce reoffending.
“This is a challenge the public sector must rise to. The approach I am announcing today does not rule out further prison-by-prison competitions in the future.”
G4S said it was “disappointed” by the announcements.
“We look forward to discussing the contract award decision with the MoJ within the next few days to determine why we were unsuccessful,” a spokeswoman added.
The announcement came as the firm said four of jail staff were injured in an altercation with an inmate at Birmingham prison, which it runs. Two staff suffered serious cuts and all four were taken to hospital for treatment.
Days before the Olympics started, G4S announced it could not completely fulfil its £284-million contract to provide 10,400 security staff for venues.
The government had to draft in 4,700 members of the armed forces to plug the gap.
G4S loses prison contract
