Prisonomics (27 page)

As an economist I was staggered at the obvious reforms needed in such a tiny part of the government services. Clearly more work needs to be done to evaluate different approaches and the extent to which some of the issues relating to women also apply to many of the men who receive custodial sentences, but it is surely clear that the present system does not work. A politician who is able to find a way to explain why a different approach is needed and how it will bring benefits for the taxpayer and the economy as a whole, would be criticised by rent-a-quote colleagues who clamour for ever harder sentences and write to the police, ministers and CPS demanding action and imprisonment for anyone they don’t like. If such a
politician exists, he or she, like the great
parliamentary
reformers of the past, would have to take on all the conventional wisdoms about prison but in the end would render the country a significant service. He or she would have to point out that the cost–benefit analysis does not stack up – in its crudest form, despite an annual cost of £6bn for our judiciary system, the cost of reoffending alone is estimated, as shown by the various references throughout this book, to be anywhere between £9bn and £13bn. The other
indirect
costs of putting people away are enormous and in the imprisonment of mothers in particular we create more potential problems that increase the likelihood that their children will offend and become a cost to the economy themselves. Crime costs society dear. But the threat of a custodial sentence itself is not enough of a deterrent and there is evidence – as I have shown and as appears in more detail in the chapters that follow – that prison itself tends to lead to more rather than less offending overall.

So, finally, it comes down to leadership. Of course there are many pressing causes to tackle. As society grows more unequal and less generous, the welfare of a small percentage of people, such as women
prisoners
, may seem less of a priority. But it is obvious to me that in this strained financial environment we find ourselves in, prison reform that saves the taxpayer money in both the short and long term is a must – and surely only a win-win situation. And hopefully, armed with those facts, a real movement for change will emerge that challenges the clichés of those who dictate the public agenda. One day we will say with pride that our prisons are only for those who need to be locked away to prevent real harm. Home curfews, electronic
surveillance, education and training, support for jobseekers, and coordinated help for better parenting and mental and health problems will be more important to the police, CPS, judges and ministers than pressing the conveyor belt button that sends so many women (and men) to prison.

A
s an economist my professional life has been devoted to using economic analysis to suggest ways of achieving more and better output from poorly
allocated
resources. Often this has led to difficulties as the exposure of losses, bad management and poorly
allocated
capital reveals that a traditional time-honoured way of doing things is inefficient.

As the reader who has come this far will realise, I have been deeply impressed by the moral, social and – in a world where such qualities are undervalued and even scorned – the sheer do-gooding impulses of those who work on prison reform and those who help newly released individuals find work, a home or a meaning in life.

In the second part of this book, I want to explain why an economic evaluation of our prisons is not only long overdue but can contribute to a better system and so I ask the questions: are we receiving value for money and what does a cost–benefit analysis of the prison system reveal?

So, let us start with the costs. While tolerating the Whitehall-speak and abundance of acronyms, one
must be aware that each report, each academic
investigation
, each think tank publication can produce slightly different figures. Yet some grasp of the bare facts is needed. We know that the 2010 spending review undertaken when the coalition came to power required the Ministry of Justice (MoJ) to reduce its Departmental Expenditure Limit (DEL) from £8.3bn in 2010/11 to £7bn in 2014/15. Some £460m of cuts have already taken place, mostly by cutting legal aid and staffing levels, and by closing a number of courts. In total, the National Offender Management Service (NOMS) alone was told to achieve total savings of £650m from its budget of £3.4bn by 2015. To put this into perspective, the total NOMS spending on women’s prisons in 2011/12 was some £173.7m for a population of 4,154 women prisoners on average during the year.
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Cuts to the prison budget led to the Prisoner Officers Association warning in 2011 that prisons were being put at serious risk of riots,
jeopardising
the safety of both prisoners and officers,
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which echoed the opinions of a number of
independent
monitoring boards around the country. The Public Accounts Committee also raised concerns in March 2013 that the depth of the cuts may lead to greater reoffending.
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In addition the 2013 spending review announced in June demanded a further cut of between 8 per cent and 10 per cent in 2015/16 to the MoJ’s DEL. Ministers anxious to please David Cameron had already volunteered these cuts before the review figures were announced in detail. A good way to reduce budget pressure would be to reduce the number of prisoners to average west European levels. If doing the right things for a minority of prisoners can actually achieve
all these benefits and we then add to that the impact on mental health and the contribution to the economy made by the women themselves, the benefits can be much greater.

There are six areas of costs which need to be examined:

There are different calculations for costs incurred by prisons depending on any additional spend that may be needed and there are differences in costs between short-term and longer-term sentences. In general, however, the alternatives to prison are much cheaper. A written answer published in Hansard suggested that the average cost of a prison place for a woman was £56,415 in 2009/10, not including expenses on healthcare or education.
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The cost of a
short-term
prisoner is probably lower than this but it still compares poorly with the approximate cost of
providing
a community order such as curfews and tagging (without taking account of gender) of £2,800. The MoJ also estimates that the cost of providing holistic support through a women’s community centre is in the region of £1,360 per year.
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If a year in custody for a woman costs the prison service £56,000, then the average short-term sentence of three months costs some £14,000. If we then compare that figure with the average cost of
providing
a community order or a community centre (say, £2,000), the difference compared to three months in prison is approximately £12,000. Moving 1,000 women from prison into community service would therefore instantly save nearly £12m per annum, which is close to 7 per cent of what is currently being
spent on women’s prisons per annum. Even on the more expensive calculation of £5,500 per annum for intensive twelve-month community service,
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the difference in savings from the three-month custodial cost of £14,000 is £8,500 per prisoner per annum, so the saving for 1,000 women is £8.5m per annum. The savings one could make if one were diverting to community orders, say, 10,000 prisoners (men and women) could easily top one hundred million pounds. And this only considers the benefits of direct costs as a result of switching from custodial sentences to community orders, and nothing else, in other words any reduced reoffending, impact on children and wider societal benefits.

Business consultancy Matrix Knowledge Group calculates that if offenders with drug abuse issues are diverted from custody to community service with intensive supervision and drug treatment, society saves some £60,000 per offender in costs over the offender’s lifetime. Of course, not all drug offenders are suitable for transfers to other services. But Matrix calculates that if the offender is diverted to
residential
drug treatment instead, that can produce an even larger lifetime cost saving to society, which they calculate at £200,000 per offender. Matrix concludes that if such a move had been done for those offenders given a custodial sentence of up to twelve months in 2007 a saving of £980m could have been made.
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The current system clearly is not working. The figures show that in 2010, 45 per cent of women leaving prison were reconvicted within one year.
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This is particularly stark given that 26 per cent of women
in prison have no previous convictions. So sending women to prison has the perverse effect of increasing the likelihood of offending.
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According to the MoJ’s own statistics, when you compare similar offenders who have committed similar crimes, those who are given a short prison sentence (of fewer than twelve months) are 6.4 per cent more likely to reoffend than those given community orders, and 8.6 per cent more likely to reoffend than those given suspended sentences.
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Again, take the MoJ figures as before that show that the average cost of a prison place for a woman was £56,415 in 2009/10, not including expense on healthcare or education.
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The approximate cost of providing a community order (without taking account of gender) is £2,800, while the MoJ estimates that the cost of providing holistic support through a women’s community centre is in the region of £1,360 per year.
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If we assume for a moment that the length of a community sentence were to equal the length of a short prison sentence, that means that by using short prison sentences instead of community sentences, we are currently paying in the region of twenty to forty times more, to increase reoffending by 7 to 8 per cent. This may not apply to all people currently receiving custodial sentences but considering that the total cost of reoffending is estimated to be between £9.5bn and £13bn per year
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and that custodial sentencing increases the reoffending rate by 8 per cent more than community orders, then by ignoring the alternatives on offer we could be costing society dear.

People who stay in touch with their families and
have proper relationships tend to reoffend far less than those that don’t. For most mothers (and some fathers) not being separated from one’s children also reduces the need for children to be taken into care, potentially saving hundreds of millions a year. The issue of care itself is not insignificant. A 2011 study into the unit costs of health and social care analysed four case studies of children in the care system with additional needs.
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These case studies provided
illustrative
examples of the broad costs of children with additional needs ranging from low to high using standard examples of typical cases. What these case studies showed is that the economic costs to society of imprisoning women with children stretch far beyond the basic prison costs related to the female offender. The studies show that the costs of placing a child in state care can range from c.£40,000 (over a
fourteen-month
period) for a straightforward uncomplicated placement of a child with no additional needs to c.£525,000 (over a twenty-month period) for a child with highly complex care needs.

Between October 2011 and December 2012, 12,251 women were received into prison.
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A conservative estimate by the Home Office suggests imprisonment results in approximately 17,240
separations
of mothers from children per year.
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If 12 per cent of separations result in local authority care, that would suggest 2,040 children per year enter the care system as a result of imprisoning mothers. If each of these generates a cost of £174,642, then this adds up to a total of £356m. If we take the minimum costs of £34,284 per child per year, then the total is still £70m. Although all these children may not stay in care for a whole year, many do because of the difficulties faced
by mothers attempting to secure a care order to regain custody after imprisonment.

Furthermore, this is just for one year, and does not take into account the long-term possibility that the child will enter the criminal justice system – 24 per cent of prisoners were taken into care as a child. Neither does it take into account the biggest cost, which is that it vastly increases the child’s likelihood of becoming a NEET (not in employment, education or training). Indeed a report by the New Economics Foundation calculated that imprisoning women who have committed non-violent offences incurs costs for the state of £17m over a ten-year period because of the children who become NEETs. Children in care also have a much higher propensity to become
offenders
themselves.

The prison population for England and Wales reached an all-time high of 88,171 in December 2011. At the same time, Scotland’s reached a record high of 8,420 (a higher proportion of their population). However, the figure for England and Wales has come down slightly in the most recent figures, for the week ending 30 August 2013 to 84,066, 3 per cent lower than the year before.
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This is a good sign, though the numbers in prison are still large having risen
steadily
since the Second World War. A sharp increase in the prison population since the 1990s has led to the current bursting point – on average it has increased by 3.6 per cent each year since 1993.

And it really is at bursting point. At the end of May 2013, seventy-two prison establishments were deemed
overcrowded – that’s 57 per cent of the estate – with nine operating at over 150 per cent of their certified normal prison capacity. We send more people per 100,000 of the population to prison than any other country in western Europe. This makes no sense. There needs to be an urgent review to ensure that the substantial increase in prison numbers can be reversed and returned to the levels experienced some twenty years ago, where the numbers were half of what they are now, and perhaps continue then to decline. The increase in the amount of prisoners has made no sense at a time when crime rates are decreasing; the larger number of prisoners mostly reflects changes in custody rate and longer sentences imposed on offenders.
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Not only is there a direct correlation between
education
and offending which demonstrates the large return on the £100m or so a year that is spent by the Department for Business, Innovation and Skills (BIS) but a link now seems also to exist between paid employment and offending. What is more, the impact of the reduction in benefits that people at work no longer need and the taxes they would pay, which will flow into the exchequer both through work and also through VAT as purchasing power increases, is rarely considered. And the economy will benefit from higher productivity; those that can work should not be wasted. The improvement in mental and physical health because of employment also has obvious benefits.

Indeed, if society was serious about reintegrating
offenders, it would be sensible to take the ‘criminal’ label off people who commit crimes who are not a threat to society. This would ensure they re-engage with their communities a lot more smoothly, incentivise them to educate or re-educate themselves and therefore become productive members of their community.

In a study undertaken by Kevin Lockyer in 2013, Policy Exchange argued that much could be saved by
closing
old prisons and replacing them with fewer ‘mega’ prisons, each one housing many more prisoners than at present. A lot more could be saved by selling the real estate prisons occupy in a move akin to the army selling its barracks as it slims down. This could raise substantial sums for investment in local prisons while some of the ‘horrid’ ones, as Nick Hardwick describes Holloway, could be sold for their prime locations in the centre of towns. Other places, such as smaller local ‘resettlement’ prisons, could be acquired by private operators and charities or leased to provide community support for offenders, ex-offenders and other women in need of help and guidance and mentoring.