G4S has lost its contract to run Birmingham prison after the facility plunged into crisis under the private company.
Both G4S and the Ministry of Justice said the decision was a “mutual agreement”, and HMP Birmingham will now be run by the Whitehall department.
The 15-year contract was meant to run until September 2026.
The government was forced to step in to run the jail, one of the biggest in the UK, in August last year after inspectors found “appalling” squalor and extreme violence.
In a scathing critique, chief inspector of prisons Peter Clarke at the time warned the prison had “slipped into crisis” following a “dramatic deterioration”.
The highly unusual intervention came as Clarke warned that levels of violence at the prison were the highest for any local jail in the country, with some inmates saying they felt unsafe even behind locked cell doors – while perpetrators could act with “near impunity”.
His assessment found blatant use of illegal substances went largely unchallenged amid a “looming lack of control”.
In 2016, more than 600 prisoners rioted and “took control” of two wings and set fire to records. It was thought to be the worst to outbreak of violence to affect a UK prison since the 1990 Strangeways disturbance in Manchester.
The government’s intervention last year was originally intended to only be for six months, which was then extended in February until the end of summer.
Prisons minister Rory Stewart said he was confident HMP Birmingham had made good progress since the “step-in”, but said that in order to build on this the prison needs “stability and continuity”.
“That is why we have mutually agreed with G4S that the public sector is better placed to drive the long-term improvements required and the contract will end,” he said.
“Our priority remains the safety of prisoners and staff but this move to restore and consolidate order at one of our most challenging jails will ultimately make sure that we are better protecting the public.”
He added: “We need to be absolutely clear that we still believe in a mixed economy of providers with some of our private prisons among the best performing in the country.”
He said G4S was running “excellent prisons” at Altcourse and Oakwood, and that the government “believes passionately that private providers should continue to play a crucial role in our system”.
In a statement, Jerry Petherick, G4S custodial and detention services managing director, said: “HMP Birmingham is an inner-city remand prison which faces exceptional challenges including high levels of prisoner violence towards staff and fellow prisoners.
“We believe that it is in the best interests of staff and the company that management of this prison is transferred to HMPPS and we will work closely with the Ministry of Justice to ensure a smooth transition over the next three months.”
Petherick said the company would continue to deliver services at the other four major UK prisons it manages.
It is the second time in three years that G4S has lost a major public sector contract.
In 2016, the controversial company was forced to transfer the management of Medway Secure Training Centre to the government following an investigation by the BBC which showed staff allegedly mistreating children held there.
Experienced governor Paul Newton, who took command of the prison last August at the time of the ‘step-in’, will remain in post to lead the prison and steer the transformation process.