Working Links, a private provider of probation services which manages thousands of offenders in Wales and south west England through three CRCs has gone into administration.

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

“There are eighteen 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. However, despite making huge cuts, profit has proved impossible to achieve.”

He added: “The collapse of Carillion only a year ago caused severe difficulties in prisons, that relied on the company for maintenance services.

“The government still refuses to learn from its past errors, which is verging on negligent behaviour.

“GMB does not support these services being run by the private sector and calls for all probation services to be brought back in-house as soon as possible.”

Napo, a union which campaigns for probation services to be returned to public ownership, said it had warned the UK government repeatedly 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.”