Governments are increasingly shifting from state-dominated criminal justice systems to models where state, private, and “third sector” organisations share responsibility, and funding, for service provision. This chapter focusses on the third sector, which we define as non-government, not-for-profit bodies such as charities, and voluntary organisations. Agencies such as the Salvation Army, Mission Australia, Brotherhood of St Laurence, the Smith Family, and a host of other national, state, and local entities feature in Australia’s third sector, delivering services to support a broad range of criminal justice activities.

The third sector has a long involvement in delivering services, with developed nations undergoing several transformations over the last century. The first wave of change occurred between the nineteenth and mid-twentieth centuries. While the former—marked by liberal ideas—considered individuals responsible for their own well-being, the latter transformed this responsibility to the welfare state (Braithwaite 2000). The second wave of change—sparked by economic crises in the early 1980s—led to neoliberal approaches that prized the free market, reduced the role of the state, and increased the responsibility of private organisations and individuals (Ericson et al. 2000; Mazerolle and Ransley 2005; Rose 1996). Another fiscal crisis—the Global Financial Crisis (GFC) that began in 2007—has driven a third wave of change. In this post-GFC era, black-and-white ideas of a public–private dichotomy have been replaced by a floating, flexible marketplace for services to communities. In this marketised environment, public, corporate, charitable, and voluntary sectors compete for funds to deliver social services, with the principal roles of government now being to set policy directions, award contracts, and monitor performance.

This chapter examines the rise of marketisation in criminal justice and the increasingly important role of third sector organisations in this market. We begin by providing a brief history around criminal justice marketisation and the roles in it for various state and non-state entities. We then focus specifically on third sector agencies, defined as non-state, non-private sector bodies such as charities, not-for-profit groups, and voluntary organisations and individuals. This is followed by a survey of the types and extent of third sector involvement in contemporary criminal justice and key current trends. We examine the advantages and disadvantages of this development, before finishing with a brief discussion of implications for the future of criminal justice.

A Brief History of Markets in Criminal Justice

Throughout the mid-twentieth century in countries like Australia, New Zealand, the UK, the USA, and Canada, governments had a virtual monopoly over the most important areas of criminal justice. Governments had established public police forces, courts, and prisons, in contrast to earlier, privately run alternatives (Braithwaite 2000). They set policy goals and were responsible for funding, employing, and administering criminal justice agencies. The safety and security of the community were conceived of as public goods and a prime responsibility of governments. During this era, limited third sector and private security services continued to exist, but their role was clearly subsidiary to that of government; they had no or few public powers or resources, and they received limited recognition for any contribution they made to public security (White 2010).

Neoliberalism transformed this position, as it did with other areas of government throughout the 1980s and 1990s. Governments sought to reduce the size of the state, decrease public expenditure, lower taxes, and share the burden of service provision (O’Malley 2001). For criminal justice, the signs of this transformation became most visible in the rise of privately run prisons and the expansion of private security. According to a 2014 report, Australia has the highest proportion of inmates in private prisons worldwide (Mason 2013). In policing, the number of private security personnel in Australia is conservatively estimated to be twice that of public police (Sarre and Prenzler 2011). In addition to corporate-run security firms—dominated by the same global entities that run private prisons—security is also provided by in-house employees, loss control and prevention firms, privately run CCTV operators, private investigators, and the manufacturers and retailers of security hardware (Loader 2000; Sparrow 2014).

The neoliberal era also transformed justice services outside of prisons and police. Private providers are used in arbitration and mediation services operating alongside mainstream courts. They also provide welfare and treatment services in areas like substance abuse, rehabilitation, housing, employment, and services for at-risk youth. For example, private hospitals deliver in- and out-patient treatment programmes, a plethora of law companies offer mediation services, and a host of businesses provide technologies and services to the government around interventions such as electronic monitoring and GPS offender tracking. Private entities bid for government contracts to deliver a defined set of services in the criminal justice system.

By the start of the twenty-first century, the combination of public and private elements was well-established in delivering outcomes for the criminal justice system. The state continued to operate police, courts, and prison services, but these were complemented by privately run operations, especially private prisons and security services. Public service providers were diversified beyond traditional corrections and police departments to include new agencies with crime control roles such as regulators, local authorities, crime commissions, and inspectorates. Private providers were dominated by global corporations, although a plethora of smaller firms and individuals operated local services. Bayley and Shearing (2001) refer to this as the “multilateralisation” of criminal justice. Prenzler and Sarre (2012) refer to a pluralisation of policing, and by extension of criminal justice service provision more broadly. In this era, policing, prisons, and criminal justice services were now provided by complex networks of state and private agencies.

During this period of multilateralisation, the state’s primary role was to set policy directions and to authorise services provided by a range of government agencies and other providers (Mazerolle and Ransley 2005). In reality, however, most services remained firmly anchored around state providers (Crawford 2006). In policing, this regulatory environment gave rise to initiatives such as third-party policing, where public police convince or coerce third parties to use their legal levers to take an active role in crime prevention (see Mazerolle and Ransley 2005, 2006), with the role of police still central. In corrections, the complex regulatory environment of the neoliberal era led to initiatives such as the establishment of sex offender registries and the use of firearms registries as a means for monitoring and controlling activities of re-entrants into the community post-incarceration (see Braga 2008).

As the twenty-first century has progressed, the roles and responsibilities of criminal justice have become even more complicated. Increasingly, government is described as marketised (Lippert and Walby 2014; Loader and Walker 2007; Maguire 2012; Whitehead 2015). This is characterised by the domination of market logics and disciplines (Loader and Walker 2007) including a focus on contracting out of services. This has not only reduced public expenditure (Dean 2014) but has also harnessed resources and skills from other sectors. Doing more with less became especially important after the GFC of 2007–2009 when many countries significantly cut funding to criminal justice services. In the UK, for example, police budgets were cut by 20 per cent from 2010 to 2015 (Millie 2014), and similar reductions were seen in many US jurisdictions (Sherman 2011). The Australian and New Zealand economies were less affected by the crisis, and impacts on criminal justice agencies have been less severe. Nevertheless, criminal justice services have been affected by other drivers of marketisation such as a focus on improving outcomes (Sherman 2013), ensuring value for money, and increasing community responsibility for solving social problems (Maguire 2012).

As with neoliberalism, a key driver of marketisation is the notion that services can be provided more cost-effectively outside of the public sector. Additionally, contracting non-government providers is seen as a way of transferring risks away from the state, including financial investment risks and non-performance risks (Whitehead 2015). The reforms to government services of the 1980s and 1990s had boosted the requirements for governments to be accountable for their expenditure of public funds, to show that they were spent both efficiently and effectively. Yet, governments have struggled to show effective outcomes, despite rising expenditures on education, health, and criminal justice. Increasingly, the problem has come to be seen in terms of how and by whom services are delivered. Government services are seen as monolithic, bureaucratic, inflexible, and centralised, unable to adapt to local and specialised needs. Opening up service provision to the market is seen as a way of overcoming these problems. But the objective is not just to save money, but also to achieve more effective outcomes, better suited to local communities and problems. If cost efficiency was the driving force of neoliberal reforms in the late twentieth century, more outcome effectiveness is the distinctive force driving marketisation in the twenty-first century.

The rise of the evidence-based movement around the turn of the century linked neatly into the marketisation of criminal justice interventions and demand for effective outcomes. The US-commissioned What Works in Crime Prevention report (Sherman et al. 1997)—also known as the University of Maryland Report—and the subsequent establishment of the international Campbell Collaboration in 2000 (Farrington and Petrosino 2001) were foundational events that increased a loud call for evidence-based crime and justice. At the same time, the Coalition for Evidence-Based Policy was established as a non-profit, non-partisan organisation that sought to increase government effectiveness through the use of rigorous evidence about what works in social policy, including education, poverty reduction, and crime prevention. The Crime and Justice Coordinating Group (CJCG) of the Campbell Collaboration was held up as an exemplar of the Coalition, overseeing “the preparation, maintenance and accessibility of systematic reviews of research [to synthesise] the effects of criminological and criminal justice interventions … designed to prevent or reduce crime or delinquency” (Farrington and Petrosino 2001, 39). More recently, the UK-funded What Works Centre for Crime Reduction (College of Policing 2016) and the worldwide network of societies for evidence-based policing—including the Australia and New Zealand Society of Evidence-Based Policing—advance the marketisation of effective crime and justice interventions through their advocacy of scientific evidence guiding crime reduction practice.

The Rise of the Third Sector in Criminal Justice Service Delivery

The rise of the third sector in criminal justice emerged alongside the government focus on evidenced-based policies seeking cost-effective outcomes from government-commissioned services. The conscious extension beyond the public and corporate sectors to seek charitable and voluntary third sector involvement was a deliberate strategy to meet local needs in a cost-effective, flexible manner. Both governments and large corporations were recognised as bureaucratic and inflexible. Third sector organisations, by contrast, were seen as closer to communities, more capable of assessing and meeting local needs, and more likely to be innovative and achieve better outcomes.

The involvement of the third sector in criminal justice in itself is not new. Citizen volunteers have a long history, especially in policing. Examples include special constables, night patrols, neighbourhood watch groups, volunteers-in-policing, and crime-stopper organisations (Ayling 2007). This involvement expanded with neoliberalism, to save public funds and to make communities more responsible for their own safety. Charities and welfare agencies have been similarly active, especially since the early twentieth century that gave rise to welfarism and rehabilitation services. Many of these third sector agencies combine a service delivery function with an activist or campaigning role, publicly arguing for criminal justice reforms pertaining to decarceration, drug decriminalisation, and greater expenditure on community welfare. British examples include the Prison Reform Trust and Howard League aimed at reforming and reducing imprisonment (Tomczak 2014). In Australia and New Zealand, religious and other charities run treatment and welfare services to address addiction, homelessness, and other criminogenic factors. They also enter into public policy debates. For example, the Salvation Army plays a role in the areas of court and prison services, and alcohol and drug treatment along with public advocacy (Salvation Army 2016), and Mission Australia in substance treatments and youth support services (Mission Australia 2016).

While charitable and volunteer services have long been involved in criminal justice, marketisation has seen governments seek to increase the scope and extent of their roles (Ilcan and Basok 2004). The most comprehensive structure internationally for marketisation is seen in the UK, where successive governments have developed the Big Society initiative, the “Modernising Commissioning” Green Paper, the “Breaking the Cycle” Green Paper, and the “Transforming Rehabilitation: A Strategy for Reform” policy documents (Tomczak 2014). These initiatives focus on establishing systems to create a broader market within criminal justice services. This market is seen as extending beyond the public and large corporate entities to involve a range of smaller providers including charities and voluntary organisations, all of which compete to provide a much-expanded suite of activities in criminal justice. This has led to plans for the contractual commissioning of probation services, allowing for corporate and third sector providers to bid for offender management and treatment services, in addition to more specialised services such as those that target substance abuse, housing needs, and unemployment (Maguire 2012). In policing, the UK introduced elected Police and Crime Commissioners in 2012, whose role includes the distribution of funds that were previously allocated to police for crime reduction purposes and may now be dispersed to a range of community organisations (Maguire 2012). In each case, the government explicitly seeks to involve local agencies—whether corporate or third sector—to develop better solutions for localised problems.

Just as neoliberalism saw the development of new processes and technologies to facilitate the privatisation, deregulation, and contracting out of government services, the marketisation era has also driven the development of new technologies, processes, and instruments in support of market-based approaches to social service delivery, including those in the criminal justice sector. Recent examples of such marketisation inventions include the Payment-By-Results (PBR) system, social impact bonds, and justice reinvestment.

PBR is a system whereby governments fund service providers for the outcomes of their services, rather than for their inputs (Fox and Albertson 2011). Tied to the more extensive commissioning of service provision, PBR is a developing tool of contemporary governments and is used to ensure cost-effective outcomes of government expenditures. In this setting, the incentives are to reduce reoffending rather than to increase the numbers of prisoners in facilities, to improve rehabilitation, and to reduce crime. The PBR system established in Britain is explicitly targeted at private and third sector providers, which are seen as more economical, innovative, and flexible than traditional public sector agencies (Maguire 2012).

Social impact bonds have been developed as a way to help fund PBR. Rather than governments funding services delivered by public, private, or third sector agencies, social impact bonds encourage the raising of private capital for this purpose. Investors—such as philanthropic trusts or individuals—fund services. If they deliver agreed outcome targets, such as reducing recidivism, they are rewarded with a specified return on their investment, funded from savings to government from reduced criminal justice spending (Neilson 2012). If they do not achieve the target, they get no return. The attractions for government of this model are clear. Funds previously spent on building and running prisons, probation, and community services can now be diverted to other demands. Payment is only required if targets are met and can be paid for from the unexpended up-front costs. The risk of failure, and public censure for failure, is transferred to the other party. Also, more flexible, local, and innovative solutions may replace bureaucratic measures that have not succeeded (Fox and Albertson 2011, 2012; Maguire 2012; Neilson 2012).

In the UK, the best-known example of PBR and social impact bonds is found in the privately operated prison at Peterborough, where a six-year pilot started in 2010. Offenders serving short sentences of less than 12 months, who would normally not receive post-release supervision, were offered pre- and post-release rehabilitation and mentoring services aimed at reducing their offending. To implement this, a philanthropic organisation, which raises funds from private, charitable, and government sources, established a social impact bond. If its intervention is found to reduce offending by 7.5 per cent or more, investors are to receive a return of up to 13 per cent, funded from savings achieved by the Ministry of Justice. The measure of success of the intervention is total desistance from reoffending for 12 months post-release. Interim results are said to be encouraging, although the pilot is yet to be finalised (Whitehead 2015). In this Peterborough example, actual service provision is sub-contracted to a charity. It is estimated that the government will save GBP 2 billion through the reduction in offending if the initiative succeeds (Fox and Albertson 2011, 2012; Maguire 2012; Neilson 2012; Whitehead 2015). Further prison-based pilots are occurring in both public and private gaols (Neilson 2012). The UK has also trialled similar schemes in probation services. Here, private and third sector organisations that provide probation services are encouraged to bid for partnerships and assume the financial risk of meeting defined outcome objectives, which mainly pertain to reduced reoffending (Neilson 2012; Whitehead 2015). Social bonds are now being trialled outside the UK, including in New Zealand (NZ Ministry of Health 2016), and in NSW (Office of Social Impact Investment 2016).

While PBR and social impact bonds have been dominant in the UK, attention in the US has focussed on what is referred to as “justice reinvestment”, which means reconfiguring investment in the criminal justice system by prioritising community prevention programmes over incarceration. Similarly to PBR and social impact bonds, it involves significant third sector contributions (Wong, Fox, and Albertson 2014). Justice reinvestment advocates argue for investment in evidence-based strategies to reduce offending that will achieve long-term savings in prison budgets. The idea was spurred by research that found a small number of neighbourhoods produced a significant proportion of people going to prison (Wood 2014). It was theorised that instead of spending more public funds building prisons, it would be better to invest in strengthening the social and economic supports available in those communities to prevent offending in the first place. Hence, the focus of justice reinvestment is on community and developmental approaches to prevent crime. As with PBR, it is assumed that many of these approaches are best developed and delivered through the third sector.

Implications of a Marketised Criminal Justice System

These marketised initiatives offer great promise. Yet, there are likely advantages and disadvantages from this recent transformation of how social interventions are delivered for the criminal justice system. Clear advantages for government include sharing the cost and financial risk of criminal justice services, greater involvement of community organisations, and community ownership of solutions, and improved innovation and flexibility of response. For the third sector, there is the opportunity to provide more tailored and appropriate services to their client groups, to achieve significant returns on investment, and to increase their impact on communities.

There are, however, some disadvantages. These include the potential for co-option of agencies, as they are given incentives to move away from their original focus to compete for contracts. For some, this could involve a decline in their advocacy or campaigning role (Tomczak 2014), especially where government contracts restrict this, or because of an expansion of their own internal bureaucracy as they become larger and more diverse (Maguire 2012). Some third sector agencies may exploit lower paid and less trained staff, while others may find their activities become fragmented. In the UK, global security corporations have formed partnerships with voluntary sector groups in order to improve the attractiveness of their corporate bids (Tomczak 2014). Charitable organisations risk objectives of compassion and welfare being displaced as they become agents of the state, involved in administering often punitive criminal justice policies.

Through the forces of marketisation, public agencies become increasingly dispensable, facing prospects of shrinking budgets and staffing levels and loss of expertise as trained staff transfer to other sectors. Since these agencies need to step in if market interventions fail, their ability to do so may be compromised. Further, a central question—that is more pertinent to criminal justice than to some other areas of public service—is whether certain core functions should remain in state hands. The state’s traditional monopoly of the right to use force and imprison its citizens entails fundamental obligations of due process, accountability, and care. Transferring these functions by contract may affect community perceptions of state legitimacy.

Regardless of the advantages and disadvantages, Fox and Albertson (2011) outline some of the challenges facing marketised initiatives, specifically PBR and social impact bonds. The first of these is achieving scale in any changes, that is, being able to move from small pilots to larger systemic changes. The pilots of PBR and social impact bonds are currently operating in small, local contexts. Even if they achieve their targets, transferring benefits from small pilot programmes to a wider system is notoriously hard to achieve, especially in contexts that may be very different to those of the pilot. What works in Peterborough may not work in the next suburb, let alone a different city or country.

The second challenge is proving impact. The evidence base for most criminal justice interventions is weak (Farrington and Welsh 2005). Most interventions are not evaluated at all, or if they are, the evaluations lack scientific rigour. It is difficult to prove that specific interventions led to particular outcomes. Even defining the desired outcomes is complicated. For example, should reoffending be measured by reconvictions knowing that only a small amount of offending results in conviction? Should the success of substance treatment programmes be measured by abstinence, which is difficult to achieve, or should it be measured by socioeconomic factors such as employment (Fox and Albertson 2011)?

The third challenge for marketised criminal justice is achieving the promised fiscal returns. An important rationale for governments is achieving a certain level of savings by involving other providers and using those savings to fund contracts. This requires great accuracy in estimating economic outcomes and benefits. One of the biggest challenges in demonstrating the impact of these interventions is the lack of expertise, particularly within the third sector, around programme evaluation. Programme evaluation is typically uncoupled from programme implementation, and funds allocated to assess the effectiveness of the intervention are often inadequate. Evaluations, done under quasi- or randomised field trial conditions, remain rare in criminal justice (Farrington and Welsh 2005), which compromises the capacity to scientifically assess the relative effectiveness of the commissioned intervention.

Justice reinvestment meets some similar challenges. Austin and Coventry (2014) point out that there is no clear pathway to reducing incarceration, thereby releasing funds for reinvestment. Even if funds are available, there is no clear evidence about which programmes or policies could, in a relatively short time, improve unemployment, lack of education, dysfunctional families, drug addiction, and other causative factors that lead to high crime rates. As a result, they argue justice reinvestment has led to “equivocal and disappointing results” (Austin and Coventry 2014, 126). Wood (2014) notes further challenges for its introduction in Australia, namely the lack of fine-grained data on the specific communities from which offenders come, the lack of strong evaluation evidence on what interventions would strengthen those communities, and the geographical distribution of crime and social marginalisation in Australia, where—unlike in the US—the most disadvantaged areas are remote Indigenous communities, rather than decaying cities.

Conclusion

Third sector organisations play a significant role in the marketisation of criminal justice in the twenty-first century. In this marketised environment, public, corporate, charitable, and voluntary sectors compete for funds to deliver social services, while the principal role of government is reduced to setting policy directions, awarding contracts, and monitoring performance. These arrangements hold the promise of being more efficient, based on assumptions that non-government agencies are less expensive than state programmes. They are also suggested to be more likely to achieve effective outcomes, because the third sector is assumed to be more flexible and innovative, and better able to assess community needs, than state agencies. But we conclude that there are three major challenges for the third sector in participating in the multilateral market economy for criminal justice services.

Firstly, third sector agencies need the skills and capacity to undertake their own quality evaluations of their delivered services. In keeping with the evidence-based movement more generally, the demands to demonstrate scientifically defensible results will pose significant challenges for third sector agencies that lack skills in programme evaluation methods. Moreover, the tendency to short-change the evaluation process in favour of allocating funds to the actual programme will significantly undermine third sector efforts to benefit from the range of incentive tools, such as PBR and social impact bonds, which dictate demonstration of quantifiable beneficial outcomes.

Secondly, unlike public and private sector entities, third sector agencies are not subject to the same level of regulatory oversight (Bottiglieri et al. 2011; Grabowski and Hirth 2003). While the oversight of the third sector is principally focussed on financial accountability, the challenges for not-for-profit agencies will likely extend into oversight of practices to ensure interventions do no harm (see Steets 2010). The challenge for governments in awarding contracts is to balance the value of third sector agencies delivering highly-valued, localised services against the capacities of these agencies to make a positive difference in often very difficult circumstances (Hudson 2009).

Finally, the roles and responsibilities of marketised services pose some challenges for initiatives that involve bilateral or even trilateral partnerships (see Ross 2012). For example, Babiak and Thibault (2009), who report on a study of cross-sector partnerships in Canada, found structural problems with governance, roles, and responsibilities caused primarily by misalignment of missions, objectives, and the values placed on competition versus collaboration among various partners (Babiak and Thibault 2009). Similarly, Eid and Sabella (2014) found that partnerships have social, political, and ethical dimensions that are driven by individual organisational goals and are conditioned by the stakeholders’ socio-political and ethical practices. The challenges of aligning the various sector values and goals to achieve cost-effective outcomes for the criminal justice system are likely to grow as the marketisation of services becomes established as the preferred mode of service delivery.