Justice Secretary Kenneth Clarke has confirmed Lancaster Castle prison, which employs 300 staff, will close in March.
The closure comes after years of claims that the Category C men's prison, which has a capacity for 238 prisoners and is leased from Lancashire County Council, was overcrowded. (It is believed it currently has about 240 inmates).
Mr Calrke said prisoners will be moved to other prisons and staff will be offered a "voluntary exit" scheme or moved to neighbouring establishments. A document circulated among prison officers last July (Word format), posted to prisonofficer.org.uk, gave assurances that there would be no redundancies.
All prisoners will be securely moved to other establishments, appropriate to their category, when final decisions and timescales had been agreed.
"The decision to close any prison is a difficult one but one that we have had to make," Kenneth Clarke told MPs. "Closing outdated and expensive prisons is an important step in our strategy to provide a secure and modern, fit-for-purpose prison estate, while improving efficiency and value for the taxpayer."
Lancaster Castle, which sits on land owned by the Duchy of Lancaster, has been a prison since the 17th century. In 2006 the Lancaster and Morecambe Vision Board launched a consultation on the vision for the future economic prosperity of the district.
Formally adopted by the council as its Economic Regeneration Strategy, it recognised that Lancaster Castle had the potential to be transformed into a major tourist attraction which could attract significant complimentary private sector investment and that this would be a highly valued development for Lancaster.
Closure was first mooted last year, with the Ministry of Justice arguing the prison was both outdated and costly and its closure would allow the castle to be opened up to visitors and tourists as a permanent attraction, but local MP Eric Ollerenshaw said there was “scepticism” about how the prison service will terminate its lease at the castle and how the major work needed to convert the jail into a visitor attraction would be funded.
Speaking in the Commons in October last year, Mr Ollerenshaw said he wanted to broker talks between the Duchy of Lancaster, which owns the castle, the Ministry of Justice, which leases it as a prison, Lancaster council and prison staff to work out a way forward.
“The castle is not as big a tourist attraction as it could be,” he said. “There is a degree of scepticism about where the funding will come from to remove a prison from an ancient castle and to terminate a lease.”
His concerns were echoed by local Green councillors after a visit to the prison last year to meet staff and inmates and left impressed. Coun Melanie Forrest felt the prison was doing good things around drug treatment, education and rehabilitation, possible because it is small.
"Staff and inmates say they have not experienced that elsewhere," she told local press. "Prison officers are very concerned and fear for their jobs, they are not sure what's going on."
"Neither the city nor the county council have any money to make it into a museum," argued Coun Chris Coates.
"While it would be very nice to have public access to the castle, I can't see that it would happen so we could end up with an empty building."
In 2009, a survey by The Prison Reform Trust revealed the prison has 70 inmates too many and criticised the amount of time that inmates were locked up for and how many occupied each cell. The report made recommendations for keeping prisoner numbers down, including more money being spent on crime prevention, drug rehabilitation and mental health problems.
Ashwell prison in Rutland will also close in March, and Morton Hall women's prison in Lincolnshire, will be turned into an immigration detention centre "as soon as possible", the Ministry of Justice said.
• Lancaster Castle on Wikipedia
• Indigo FM News report, 27th August 2009: Lancaster Castle is overcrowded