Just Solutions International caused a £1.1 million loss to the Ministry of Justice

29th January 2016

It now can be revealed that “Just Solutions International” – the Ministry of Justice commercial venture promoted by former Lord Chancellor and Justice Secretary Chris Grayling – caused an overall £1.1 million LOSS to the MoJ.

JSI was closed by Grayling’s successor Michael Gove last October.

From a National Audit Report [Edit: Now Online]:

The total income generated by JSi was less than £1 million. The main contracts delivered by NOMS, under the JSi brand, between 2012 and 2015 were for training Royal Oman Police officers (£255,000), consultancy on prison design in Libya (£128,000) and contracts in Nigeria (£130,000), Australia (£89,000) and the Seychelles (£34,000).

The cost of setting up JSi exceeded the income generated by completed contracts. We estimate that JSi’s costs were approximately £2.1 million from 2012 until its closure, including £239,000 on consultancy services. Therefore JSi made a net loss of approximately £1.1 million in this period. This is due, in part, to the decision to withdraw from prospective arrangements with Saudi Arabia and Oman. 

The NAO has now provided this press release:

Investigation into Just Solutions International

The National Audit Office (NAO) has published the findings from its investigation into Just Solutions International (JSi), which was the commercial arm of the National Offender Management Service (NOMS). JSi aimed to help improve justice systems across the world by selling products and consultancy services. In September 2015 the Ministry of Justice announced the closure of JSi. Shortly after this announcement the NAO received correspondence raising concerns around the transparency of JSi’s activities and requesting that we investigate.
The key findings of this investigation are as follows:

· Just Solutions International (JSi) was created in 2012 to exploit commercial opportunities arising from National Offender Management Service (NOMS) activities relating to IT, training and consultancy services. The target market was primarily overseas governments originally facilitated through the Foreign & Commonwealth Office (FCO) then directly with overseas governments from 2014. JSi aimed to make a commercial return on work contracted from overseas governments.

· JSi was established as a brand within the NOMS Commercial Development Group (CDG) after the NOMS board rejected a proposal to establish JSi as a company. A number of consultants were engaged from 2010 to 2014 to undertake pilots and develop business cases that formed the basis of JSi.

· In establishing JSi, NOMS followed the current guidance from HM Treasury, the National Archives and the Cabinet Office where this guidance was available. The Cabinet Office guidance is limited because it does not cover the question of whether a company is the most appropriate form for new operations.

· The total income generated by JSi was less than £1 million. The main contracts delivered by NOMS, under the JSi brand, between 2012 and 2015 were for training Royal Oman Police officers (£255,000), consultancy on prison design in Libya (£128,000) and contracts in Nigeria (£130,000), Australia (£89,000) and the Seychelles (£34,000).

· The cost of setting up JSi exceeded the income generated by completed contracts. The NAO estimate that JSi’s costs were approximately £2.1 million from 2012 until its closure, including £239,000 on consultancy services. Therefore JSi made a net loss of approximately £1.1 million in this period. This is due, in part, to the decision to withdraw from prospective arrangements with Saudi Arabia and Oman. The NAO also note that had JSi not been created, NOMS would have committed funding to support wider international engagement with countries to support FCO and wider Government objectives.

· In September 2015 the Secretary of State for Justice closed JSi and decided not to pursue any commercial activities in Oman. In October 2015 JSi withdrew from the bid for work with Saudi Arabia. This followed the launch of a judicial review into JSi and significant media and political interest in the proposed work with Saudi Arabia. There were no financial penalties for withdrawing from contract negotiations with Saudi Arabia.

· JSi is now closed and NOMS does not plan to perform further work for overseas governments on a commercial basis. NOMS will continue to receive visits and requests for assistance from overseas governments through FCO and other UK departments for the achievement of cross-government objectives.

Notes for Editors

1. This report is a National Audit Office Investigation. The NAO conducts investigations to establish the underlying facts in circumstances where concerns have been raised with us, or in response to intelligence that we have gathered through our wider work.

2. Press notices and reports are available from the date of publication on the NAO website, which is at the NAO’s website. Hard copies can be obtained by using the relevant links on our website.

3. The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Sir Amyas Morse KCB, is an Officer of the House of Commons and leads the NAO, which employs some 810 people. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services, and our work led to audited savings of £1.15 billion in 2014.

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