Deputy Attorney General Sally Yates
US Deputy Attorney General Sally Yates announced that the government would phase out its use of private prisons for federal inmates Kevin Lamarque/Reuters

The US Bureau of Prisons will phase out the use of private prisons for federal inmates, the Justice Department announced on Thursday (18 August). US Deputy Attorney General Sally Yates cited safety concerns and a decline in the federal inmate population as reasons for the phase out.

Yates explained that contracts with 13 private prisons will be reviewed and allowed to expire over the next five years, the BBC reported. She instructed the bureau to either allow the contracts to expire or to at least "substantially reduce" the number of beds that future contracts provide.

"They do not save substantially on costs and ... they do not maintain the same level of safety and security," Yates said in a memo to the bureau. She added that private prisons also provide fewer rehabilitative services that are "essential to reducing recidivism and improving public safety."

In the memo, Yates said that by May 2017, the bureau is expected to house just 14,200 inmates in private prisons – a small percentage of the approximate 195,000 federal inmates currently in the US.

The bureau will look to scale down inmate slots at private prisons from 10,800 to a maximum of 3,600, The New York Times reported.

A report released earlier in August 2016 by the Inspector General found that private prisons had higher rates of violent incidents and rule infractions compared to government-run prisons. The report identified three corporations as running the private prisons used by the government: Corrections Corporation of America, GEO Group and Management and Training Corporation.

Jonathan Burns, a spokesman for Corrections Corporation of America, argued that the Inspector General's report contained "significant flaws" and said other studies show privately owned institutions "to be equal or better with regard to safety and quality."

According to the BBC, private prison company stocks plummeted on Wall Street following the announcement. Corrections Corporation of America dropped by nearly 50% by the afternoon, while GEO Group managed to bounce back a bit to settle down 39.58%.

Advocates for prison reform celebrated the announcement. "This is a huge deal. It is historic and groundbreaking," David Fathi, director of the ACLU National Prison Project, told The Washington Post.

"For the last 35 years, the use of private prisons in this country has crept every upward, and this is a startling and major reversal of that trend, and one that we hope will be followed by others."

However, the directive only involved the 13 privately run facilities used by the federal Bureau of Prisons. Yates' memo does not apply to state prisons, even the ones that are privately run, and it does not apply to Immigration and Customs Enforcement and US Marshals Service inmates.

Since December 2015, private prisons have held 22,660 federal inmates.