There are over 1,110 inmates housed at Parc prison in Bridgend
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The presence of mentally ill prisoners in HMP Parc, Wales's only private jail is a "constant concern," according to a new report.
The Independent Monitoring Board (IMB) said it was also concerned there was no psychiatrist who specialised in young people with mental illness.
However, the report commended the company which runs Parc, Group 4 Securicor (G4S) on recent improvements.
Parc, near Bridgend, has around 1,110 places for adults and young offenders.
The IMB, which monitors the state of prison premises and the treatment of inmates, issued the report covering the period between March 2006 and February 2007.
Deportation
According to its findings, there were more than 80 referrals of prisoners with mental healthcare needs between March and November 2006.
Also in November 2006 a mental health team at Parc treated 52 cases, the majority of them adults.
Both the IMB and G4S voiced an "urgent need" for a dedicated "young offenders own interest" unit in south Wales.
John Homfray, chair of the Independent Monitoring Board at the jail, said the 15-place health care facility was used like a "cupboard" to keep mentally ill patients.
He told Radio Wales: "What happens is that if somebody goes on a normal wing and is found to be mentally ill - and therefore can't cope properly on that wing or causes terrible disruptions - then they get transferred to health care.
'In a cupboard'
"The health care facility is basically to deal with acute problems that arise in the prison, so then you get a warehousing situation in this very tightly-run, small, facility and they stay there.
"Because the prison copes well with them, to the extent that they're not causing any trouble elsewhere, they just stay there. Like in a cupboard."
The report also highlights the ineffective arrangements for the deportation of foreign national prisoners at the end of their sentences in the UK.
However, the IMB commended G4S on the "many improvements" at Parc since the chief inspector of prison's visit in January 2006.
It hopes the progress noted in the report can be maintained with the anticipated expansion of the prison in the next few years.
G4S has set a target date for a new block, housing up to 450 inmates, to be opened in 2009, at Parc.