Demand Forecasting - Building a case for Corrections

The Challenge

In the last few years prisons around New Zealand have at times been operating over capacity, with more prisoners than they have beds.  The number of inmates is expected to continue to increase.  The Department of Corrections is building new prisons, which will help alleviate the pressure, but they also need to make sure they have funding for their staff to manage the extra workload. Corrections approached Datamine to help them build a robust business case for Treasury, estimating the extra staff funding which is needed to cover the expected increase in the number of prisoners.

Corrections had observed a fairly linear relationship between the number of inmates and prison officers, up to a certain point.  However, when the facilities are close to full, more staff time is needed for activities like finding temporary accommodation and co-ordinating prison transfers.  This was being managed through overtime, which is costly and not sustainable.  When prisons are operating over capacity, staff costs rise rapidly.

Corrections asked Datamine to help them quantify the number of prison officers required to manage the 2005 – 2008 prison population, as forecast by the Ministry of Justice.

The Solution

Datamine recommended a data-driven, evidence-based approach to ensure a sound business case.  We used payroll data, comparing the actual number of hours worked with the number of inmates and the capacity of each facility. Together with the forecast from the Ministry of Justice, this was used to predict the future staff costs associated with the increasing number of prisoners.

The Result

Staff costs increased from less than $380 per prisoner per week when occupancy was below 99% to over $420 per prisoner per week when occupancy rose to over 102%. When the prisons are nearly full, a 3% increase in the number of prisoners results in a 13% increase in staff costs. Quantifying these costs allowed a clear case to be put to Treasury.

To help Corrections continue to manage the increasing prisoner numbers, and to allow early warning of expected increases; Datamine developed an easy-to-use forecasting tool.  This gives a six-month long forecast of the expected number of prisoners. Corrections are now using this application in-house to help them plan and manage their operations.