UNION bosses say they had warned the Government that contracting out prison services was a recipe for disaster, following the collapse of the firm responsible for the upkeep of HMP Chelmsford.

Carillion, the UK’s second largest construction company, has fallen into liquidation after struggling under £1.5bn of debt. The firm has around 20,000 UK employees and is a major supplier to the Government - including holding the maintenance contract for Chelmsford prison, one of the most troubled jails in the country.

Following a weekend of crisis talks, company bosses met with creditor banks RBS, Barclays, HSBC, Lloyds and Santander, on Monday, to be told the lenders would no longer provide financial support.

The company is understood to have contracts worth £1.7bn, for catering, maintenance and construction at prisons, schools and hospitals.

The Prison Officers Association (POA) said it had warned the Government and senior management within Her Majesty’s Prison and Probation Service (HMPPS) that the contracting out of services and maintenance in prisons would compromise safety and security.

Steve Gillan, General Secretary of the POA, said: “We need to know the contingency plans to keep our prisons operational.

“During the time Carillion had this contract the level of essential maintenance and work that is outstanding has spiralled out of control. This has resulted in loss of prison accommodation and in-humane conditions in our prisons”.

The contracting out of work commissioned by HMPPS was supposed to realise more than £100 million in savings for the tax payer, but due diligence was not undertaken and the Public Accounts Committee exposed that no savings would be made.

Mr Gillan added: “When these contracts were let, the POA and other unions within the Ministry of Justice raised serious concerns and objections.

“Prison maintenance and repairs are essential in keeping prisons safe and secure.

“The Government and the employer have introduced change after change in an attempt to save money and today we face another real crisis due to poor management and privatisation”.

Following the collapse of Carillion, leaving thousands of workers worldwide with an uncertain future, leaders of the POA are demanding prison contracts are brought back in house.

Alex Mayer, Albour MEP for the East of England, said: “Carillion has been on the rocks for months, but the Government has buried its head in the sand.

“Jobs, vital infrastructure projects and public services are now at risk.

“We need urgent assurances that this collapse will not hit our prison service.

“Sooner or later the Government must call time on the repeated failures of the private sector.”

The Government says it has contigency plans in place and the prison will continue to run as normal.