As they're massively overcrowded, surely we should be keeping existing prisons open and building new super prisons?

No they are planning to release many into the arms of companies with the objective of keeping them out of prison.

Stupidity of the highest order.
We already have the situation where violent/sex offenders are let out early due to overcrowding, and many non violent criminals run up a rediculous number of convictions without being sent down.