A probation services provider has gone into administration after what union bosses called a “disastrous privatisation programme” under former justice secretary Chris Grayling.

The collapse of Working Links, which owns three Community Rehabilitation Companies (CRCs) delivering probation services in Wales, Avon and Somerset, and Devon and Cornwall, should be a “wake-up call” for the Government, unions said.

GMB, the union for probation workers, added that private companies’ involvement in the sector was an “expensive waste”.

And Unison, the UK’s largest union, called it “yet another catastrophe to be added to Chris Grayling’s growing record of failure”.

Under Mr Grayling, ministers overhauled the arrangements for managing offenders in 2014 in a partial privatisation known as Transforming Rehabilitation.

The National Probation Service was created to deal with high-risk cases, while remaining work was assigned to 21 CRCs.

The beleaguered Transport Secretary is facing calls for his resignation after a string of mishaps including the Brexit ferry controversy and train timetabling issues.

Unison national officer for police and justice Ben Priestley said: “He was repeatedly warned when justice secretary that privatisation would fail. The collapse of these contracts is proof.

“Despite the chaos, the Ministry of Justice is still planning to award more probation contracts to private firms.”

GMB national officer Kevin Brandstatter said: “The failure of three community rehabilitation companies in the South West of England and Wales should serve as a wake-up call to the Ministry of Justice.

“There are 18 other contracts, including a number held by Interserve – a company which totters from financial crisis to financial crisis.

“The involvement of private companies in the justice sector is an expensive waste; services remain undelivered while thousands of jobs are sacrificed in an attempt to deliver profits.”

It comes as a “deeply troubling” report by Dame Glenys Stacey, HM Chief Inspector of Probation, revealed that staff at one of the companies was “under-recording the number of riskier cases because of commercial pressures”.

Devon and Cornwall was the first CRC to be rated inadequate by HM Inspectorate of Probation in 2018-19, last November, when it was also found that staff were completing sentence plans to meet performance targets, without meeting the offender involved.

Dame Glenys said: “The professional ethos of probation has buckled under the strain of the commercial pressures put upon it here, and it must be restored urgently.”

The Government has agreed that Seetec, owner of Kent, Surrey and Sussex CRC, will take over the Working Links CRCs.

Napo, a union campaigning for probation services to be returned to public ownership, said it had repeatedly warned the Government of the situation.

General secretary Ian Lawrence said: “This is exactly what we warned the Government about from day one of this disastrous privatisation programme that has seen an award-winning service fall into total chaos in just four years.

“They admit it has failed and are ending the contracts early but the situation with Working Links is beyond the pale.

“They are avoiding their responsibility to staff and the public by not intervening and allowing the company to go bust rather than bring it back into public ownership and step up the liabilities of their own making.”

Justice Secretary David GaukeJustice Secretary David Gauke described Dame Glenys’s report as damning (Aaron Chown/PA)

Justice Secretary David Gauke said Dame Glenys’s report was “damning” and it was “unacceptable” if offenders were being classified on the basis of trying to meet a target.

“The actions there clearly unacceptable, it is right that … Working Links have gone into administration and their position is being taken over by another company that will be running that.

“But clearly it’s not acceptable what we’ve seen and it is important that we make changes in this individual case, which I think is particularly bad, but we also stepped in in the summer to make changes to bring these contracts to an end and to reform them.

“We’ve consulted on that and we’re considering our response to that consultation.”

Shadow justice secretary Richard Burgon said the system was “clearly broken”, adding: “This is yet another public service severely damaged by Chris Grayling and the Conservatives’ obsession with privatisation.

“We need a probation system that prioritises keeping the public safe rather than boosting the profits of private companies.”