Private firms are better at running prisons than the public sector and all jails should be subject to open competition, an independent think-tank has said.
The Government would be wrong to limit the role of private companies within prisons to small contracts such as maintenance and catering, the right-leaning group Reform said.
Some 10 out of 12 privately managed prisons have lower reoffending rates among offenders serving 12 months or more than comparable public sector prisons, Reform found.
Reform researcher Will Tanner, who penned the report "The case for private prisons", said: "Twenty years of private prisons have created an effective market which is ready to grow. Evidence shows that a greater role for the private sector will advance the 'rehabilitation revolution' which ministers want to deliver."
Private firms have been managing prisons since 1992, but in November last year Justice Secretary Chris Grayling signalled a move away from wholesale privatisation as he decided four prisons, including G4S-run HMP Wolds, should be run by the public sector.
Policy groups, including Reform, said the decision amounted to the end of competition for prison management between the public and private sector, although Mr Grayling insisted it did not rule out further prison-by-prison competitions in the future.
Looking at Ministry of Justice data, Reform said some seven out of 10 privately managed prisons have lower reoffending rates among offenders serving fewer than 12 months, compared to comparable public sector prisons. Furthermore, Reform said private prisons outperform their public counterparts in four of the performance measures used by the MoJ.
In the report, Mr Tanner argues: "Private contractors outperform comparable public sector prisons on both cost and quality, delivering better value for money for the taxpayer. In addition, the vast majority of contracted prisons have lower reoffending rates than similar public sector prisons for both long and short-term prisoners, a key Government objective."
Justice Minister Jeremy Wright said: "This simplistic analysis does not tell the whole story - a wide range of factors contribute to reoffending including previous criminal behaviour, drug and alcohol dependency and the support offenders receive on release from prison. This is why we are committed to introducing significant reforms that will bring down our stubbornly high reoffending rates."
Prison Reform Trust director Juliet Lyon said Reform's report masked "decidedly mixed results" as some private jails have proved effective but others have been criticised: "It is almost impossible to compare the performance and reoffending rates of one establishment with another, partly because prisons hold different categories of offenders and also because prisoners often serve their sentences in a number of different jails."
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