The Finance Minister is standing by the Government's decision to contract British-based firm Serco to run an Auckland prison.
His comments follow overnight reports that the company is under investigation in the UK over some of its practices.
The Guardian newspaper reported that Serco Group, which operates a wide range of outsourced services for the UK government, is under investigation for allegedly providing unsafe out-of-hours GP service
The company was subject to a surprised inspection by the National Health Service in Cornwall last month after whistle-blowers claimed it manipulated results where it failed to meet targets.
Appearing on TVNZ's Q+A programme this morning, Minister Bill English said the Government still has confidence in Serco despite the claims.
"We've signed a contractual agreement with them, it's a very tight contractual agreement. For the first time it's aiming public money at getting results," English said.
The Serco organisation won the bid to manage the Auckland Central Remand Prison, in Mount Eden, in late 2010.
It took over managerial duties of the prison from the Department of Corrections in May 2011.
In addition, the firm was recently selected as the preferred bidder to privately operate the new Wiri prison in south Auckland.
This morning, English said the contract with Serco is "cutting edge".
He said Serco is incentivised to reduce prisoner reoffending, saving the Government $90,000 a year for each ex-prisoner that ceases to reoffend.
"We have confidence that as it's put in place we can actually make a difference, get results," English said.
"This year we will be closing prisons for the first time in a generation."
However, just last month a Department of Corrections report of the prison highlighted several failures in Serco's operations.
The report indicated the British firm had failed to meet 40% of its performance targets, including random drug testing and prisoner management plans.
It was also fined $150,000 after one prisoner escaped, as well as fined tens of thousands of dollars for accidentally releasing one prisoner early, and for failing to file progress reports.
Annually, Serco can earn up to approximately $3 million in incentive payments.