The government is considering whether outsourcing firm G4S is in breach of contract after five men were arrested following allegations of abuse uncovered by BBC Panorama at G4S-run Medway Secure Training Centre.
The news of the government's action was announced today by prisons minister Andrew Selous in a written parliamentary answer.
Selous said: "An investigation into the allegations reported at Medway Secure Training College is underway by Kent Police and Local Authority.
"We are currently considering how to proceed including looking at whether the contract was breached. Decisions will be announced in the normal way."
G4S said it wasn't aware of any formal investigation, but a spokesperson told BuzzFeed News: "It stands to reason that serious allegations of this sort should be subject to a full investigation, and indeed G4S has already announced its commitment to a complete review of how this occurred and how we can ensure it doesn't happen again."
Since the Panorama story broke, BuzzFeed News has learned that an unspecified number of staff members were dismissed from the centre in 2013 after they described children in the centre on social media as "fucking cunts" and "fucking arseholes".
Details of the incident were reported in a small story in Private Eye magazine three years ago, but it wasn't picked up by other media.
The magazine discovered that a custody officer posted on Facebook that he'd suffered burns after a child threw a hot cheese sandwich at him.
One member of staff replied: "The fucking cunts. Now this is a whole new level!" Another wrote: "Fucking arseholes!" The magazine concluded: "Just the people to provide ... self proclaimed 'child care best practice'".
A G4S spokesperson told BuzzFeed News: "Our training centre team is in a position of trust and responsibility and where they don't uphold the standards of professional conduct required we will always take action. As a consequence of this incident a number of people were dismissed – and others were issued with final written warnings as appropriate."
The BBC's report this month appeared to show guards at the private youth prison apparently slapping an inmate, using restraint techniques unnecessarily, and attempting to conceal their behaviour from CCTV cameras by standing under them.
G4S's managing director for children's services, Paul Cook, said the company fully supported the police investigation: "This morning's arrests send a strong message that any allegations of wrongdoing will be thoroughly investigated and we are grateful to the police for their swift action in this case," he said.
In spite of the police action, there are currently 48 children still being held in Medway.
Earlier this month, BuzzFeed News revealed there may have been even more historical incidents of abuse at Medway, but a lack of CCTV evidence has hurt investigation of the complaints. The Howard League for Penal Reform said its lawyers had dealt with numerous concerns raised by or on behalf of young people at the prison "dating from at least 2008".
Frances Crook, chief executive of the Howard League for Penal Reform, said: "The Howard League has been calling for a much more robust scrutiny of justice contracts, so we welcome a first, if somewhat tentative step, towards holding companies that profit from punishment to account.
"We hope that the Ministry of Justice will not just respond to media revelations of child abuse to undertake such scrutiny in future, but will oversee these contracts properly to prevent abuse and financial shenanigans."
Jo Stevens MP, Labour Shadow Minister for Prisons and Probation, said: "Labour has called for the Government to take immediate action to put all G4S-run prisons, STCs and detention centres into special measures, and send in management teams to work alongside existing staff. Michael Gove should review his contracts with G4S to make sure the company is not considered for bidding during that process."