Justice Reinvestment Research Paper

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While the idea of justice reinvestment (JR) has its origins in the USA, politicians, policy makers, and academics in the UK have shown a growing interest in its applicability over the last 8 years. The level of public spending on prisons in the UK does not yet approach that of the USA whose 2.5 million prisoners represent an imprisonment rate four times higher than in Britain. Yet the UK prison population, particularly in England and Wales, which is by far the largest jurisdiction, has more than doubled in the 20 years since 1991 to reach more than 87,500 in the autumn of 2011. Concerns about the cost and effectiveness of this vastly increased use of imprisonment have led to a widespread desire to find ways of curbing the spending involved or at least diverting it into more productive community-based measures.

The formation of a new coalition government in May 2010 led to a marked change of criminal justice policy with the new Conservative and Liberal Democrat administration aiming to halt the seemingly inevitable rise in prison numbers. The coalition’s program for government promised to introduce a “‘rehabilitation revolution’ that will pay independent providers to reduce re-offending, paid for by the savings this new approach will generate within the criminal justice system” (Cabinet Office 2011). The government has described this as “a radical and decentralizing reform which will deliver a fundamental shift in the way rehabilitation is delivered. It will make the concept of justice reinvestment real by allowing providers to invest money in the activity that will prevent offending rather than spending money on dealing with the consequences” (Ministry of Justice 2010).

It is too early to say what impact this form of justice reinvestment might have. Before it was under way, serious disturbances on the streets of English cities in the summer of 2011 led to demands for a tougher approach to law and order in some quarters but the need to cut public-spending acts as a restraint on those who would reverse policy and return to a the more expansionist prison-building program that the Conservative party favored in advance of the 2010 general election.

A new Justice Secretary appointed in 2012 has announced me acceleration of the introduction of “Payment by returns” with plans to open most probation services to competition. Savings will be used to expand community supervision of offenders released from short prison sentences. But reduced spending on prisons will be sought not by cutting prison numbers but through reductions in the unit costs of prison management.

Some Important Differences Between The USA And The UK

At the outset, it is important to recognize some important differences between the USA and the UK which make the idea of justice reinvestment more compelling to Americans than in Britain. The still vastly differing scale of imprisonment in the USA has created a large pool of prisoners who, on any reasonable assessment, could safely be released from prison. As a result of the comparative harshness of sentencing and sentence execution policies, there is inevitably considerable scope for prison-reduction measures. For example, mandatory and truth in sentencing policies have led to the long-term incarceration of large numbers of nonviolent prisoners. Reducing prison capacity potentially frees up sums for reinvestment (or indeed to translate into tax cuts) which are thus substantially higher across the Atlantic than in the UK. There are unlikely to be many “million dollar blocks” in England and Wales – residential neighborhoods where that amount is spent on imprisonment each year – although analysis in the northeast of

England found that in 2005 magistrates in Gateshead incurred over half a million pounds worth of costs in sending just over a hundred individuals to prison, on average for a few weeks. Crown court decisions generated substantially greater costs (Allen et al. 2007). A more recent study found that it cost the taxpayer £2.5 million in 2009/2010 to send nonviolent and nonsexual offenders from the London borough of Lewisham to prison for periods of less than a year. The authors concluded that funds that could be made available to local agencies to prevent reoffending through a process of justice reinvestment are therefore considerable (Lanning et al. 2011). But they are substantially lower than in the USA.

It is true too that America’s lack of welfare structures and the highly concentrated zones of urban deprivation mean that resources to strengthen housing, employment, substance misuse, and other services are likely to yield quicker and more visible positive impact on the resettlement of released prisoners than might be the case in the UK.

Nonetheless, there is considerable scope for enhancing measures to rehabilitate offenders in the UK. In England and Wales, prisoners sentenced to less than 12 months do not receive any supervision or support from the probation service on release. There are gaps in services even for those offenders who are being supervised in the community. The National Audit Office found in 2008 that “some community order requirements, for example alcohol treatment… are not available or rarely used” – this despite strong links between alcohol and offending. They also found long waiting lists for some order requirements, in particular group programmes on domestic violence” (NAO 2008).

It is also the case that the aspects of the structure of American governance lend themselves to JR approaches. The shared responsibilities exercised by counties, states, and the federal government in running and financing imprisonment provide opportunities to introduce financial incentives to control or, as well as (as has been the case), to expand prison numbers. A variety of fiscal arrangements have been introduced which reward counties which develop measures that reduce demand for custodial places at state level. A virtuous circle is created in which state savings on incarceration are reinvested in local alternatives which in turn further reduce demand for expensive state placements. This process has been seen, for example, in New York State where four closed facilities for juveniles have been closed with resources invested in family therapy and other alternative programs in New York City (Solomon and Allen 2009), but the approach has a history going back to the California probation subsidy scheme in the 1970s. Federal grants have also been used to encourage reductions in custody particularly in respect to disproportionate minority confinement.

In England and Wales, the costs of custody are met almost entirely by central government through the National Offender Management Service, an agency of the Ministry of Justice. There is a modest exception in the case of juvenile custody. Local authorities are currently required to pay a third of the costs when a court orders a child under the age of 17 to be placed in secure care during a remand period in criminal proceedings. This local liability applies in a relatively small number of cases – most juveniles who are remanded into custody are not placed in secure care institutions but in prison establishments which are paid for centrally. However, as part of their program of criminal justice reform, the government is seeking to make local authorities financially responsible for the costs of all secure remands of young people under the age of 18 wherever they are placed. Although responsibility for commissioning and placements will be retained by central government, the aim is to “simplify current arrangements and provide a powerful incentive for local authorities to invest in alternative strategies for this group of young people” (Ministry of Justice 2011). The legislation to introduce this change is currently being debated in Parliament.

The system of American governance also gives the executive a somewhat greater say over the size of custodial populations than in the UK where the courts play a more decisive role.

In juvenile justice, it is the executive which decides whether custodial placements are made in some states. In others such placements are in large part made following recommendations by probation officers. This provides a straightforward lever to change rates of committal to custody. In the adult system, executives have often retained the right to adjust the proportion to time served and of course can determine the level of flexibility applied in cases of parole violations. Reintroducing or making more generous schemes for good time credits and introducing a little more discretion in responses to parole violations can have substantial impacts. Legislative change is not always needed to reduce the actual lengths of sentences served or the rate of recalls to prison. In England and Wales, these are the two key factors which lie behind the sharp rise in prison numbers in England and Wales since the early 1990s.

In short, in the USA, the extraordinary rise in mass incarceration has made JR a highly attractive proposition for cash-strapped states and provides numerous opportunities to scale back the use and cost of prison. In the UK, because the rate of imprisonment is lower, the opportunities are somewhat more modest.

Recent Policy Developments In England And Wales

Although the overall rate of imprisonment in the UK is much lower than in the USA – 155 per 100,000 population compared to 743, between 1992 and 2011 – the prison population in England and Wales more than doubled in size. About three quarters of the rise is accounted for by increase in the numbers sentenced to immediate imprisonment and about 16 % by an increase in those recalled to prison for breaching the terms of their release on parole or license. A recent Ministry of Justice analysis suggests that the reasons lie in tougher sentencing and enforcement outcomes (which is not in question) and a more serious mix of offenders coming before the courts (for which the evidence is more contested) (Ministry of Justice 2009). Rising prison numbers represent the costliest tip of a criminalization iceberg which has seen a large extension of the reach of the criminal justice system, during a period of falling crime. The creation of 3,000 new criminal offenses, the development of hybrid forms of social control such as Anti-Social Behavior Orders, and the introduction of indeterminate sentences form a pattern in which social problems are increasingly treated by way of punishment and control. Overseas observers express surprise that this trend should have occurred under a Labor government. Indeed as recently as 2002, in the White Paper “Justice for All,” the Labor government listed the record prison population, with its costs and poor outcomes as something that “is not working” (Home Office 2002).

Since then, record prison numbers have like numbers of police officers become something to be trumpeted. Until 2010, the then Labor government relied on the analysis contained in a report they had commissioned from Lord Carter called “Securing the Future” (Carter 2007). In large measure, this offered a “predict and provide” approach to the supply of prison places. The report did contain one or two proposals to reduce or stabilize demand for imprisonment, but its scope was narrowly confined and was dismissed as “deeply unimpressive” by the House of Commons Justice Committee (Parliamentary Select Committee on Justice 2008). It ignored entirely the case for a comprehensive and wide-ranging strategy to reduce the resort to imprisonment and to develop alternative ways of dealing with offenders. Carter’s report stood in sharp contrast to the work of the Scottish Prisons Commission which was established in 2007. Its report “Scotland’s Choice” set out a vision of reducing Scotland’s prison population over time from 8,000 to 5,000 (McLeish 2008). Among its recommendations, the Scottish report called for progress “in developing services that are available nationwide to address the social and health related needs of many offenders” and called on the devolved government “to promote recognition across all departments, all public services, all sectors and all communities of a duty to reintegrate both those who have paid back in the community and those who have served their time in prison” (McLeish 2008).

Lord Carter’s report about England and Wales had by contrast nothing to say about social, educational, and health-care policies which are needed to prevent crime, rehabilitate offenders, and reintegrate those leaving prison. There is evidence that despite substantial investment in public services in recent years, major shortfalls in the availability of social provision remain particularly in the most deprived areas and among the most excluded populations in England and Wales. A separate government review of people with mental health problems and learning disabilities in the criminal justice system, for example, concluded in 2009 that for diversion into the health-care system to be introduced effectively, there needed to be sufficient capacity in mainstream services, as well as confidence in those services for those making decisions about offenders (Bradley 2009). While the review did not make a detailed assessment of the adequacy of services, it tellingly noted that in 2006, courts made use of their powers to add a mental health treatment condition to a community sentence on only 725 occasions. Such conditions represented less than 0.4 % of the 203,323 requirements imposed during the course of the year. Similarly, despite considerable investment in drug treatment, the number of residential rehabilitation places is still low compared to other countries. There are about 2,500 beds in England with about 16,000 individuals accessing residential services for substance misuse each year. Given that half of male prisoners and two thirds of women have used class A drugs in the 6 months prior to imprisonment, there is a strong prima facie case for increasing capacity significantly. Despite some progress in establishing community-based services for women offenders following a major review of women in prison, women are still receiving short prison sentences for want of constructive alternatives.

It is arguable too that the distorted priority given to increasing imprisonment has been encouraged by a costly centrally driven system of offender management, the child of an earlier review of correctional services undertaken by Lord Carter. The creation of the National Offender Management Service (NOMS), a central government agency responsible for prison and probation services (and to a lesser extent the Youth Justice Board) has produced a situation in which local health, education, employment, and social services can slough off their responsibilities for people in the criminal justice system, safe in the knowledge that their needs will be addressed by a central government agency. This is most starkly illustrated in the juvenile system where local authorities can shunt the costs of meeting the needs of demanding teenagers onto central government, but it is more generally the case that local mainstream agencies have little incentive to address and absorb crime and delinquency problems in the way that they might.

The formation of the coalition government in May 2010 brought an important change of emphasis in criminal justice policy. The Programme for Government which set out the key policy commitments included a commitment to more effective sentencing policies, an overhaul of rehabilitation, and an exploration of alternative forms of secure treatment-based accommodation for mentally ill and drugs offenders (Cabinet Office 2010).

Specific proposals for criminal justice reform were published 6 months later in the consultation paper “Breaking the Cycle.” This proposed a series of measures which aimed to result in “fewer crimes being committed overall, stemming the unsustainable rise in the prison population and ultimately achieving a reduction in the amount of money spent on the criminal justice system. There will be more payback to victims and communities and the public will be better served” (Ministry of Justice 2010).

During the period of consultation, some of the measures proved controversial – particularly a proposed increase in the sentencing discount offered to offenders who plead guilty at an early stage in proceedings. When it became clear that increased discounts would apply to serious crimes such as rape, there was something of a backlash. As a result of pressure from the Labor opposition and from harder line members of the Conservative party, policy on criminal justice assumed a markedly harder line in the weeks leading up to the publication in June 2011 of the government’s response to the Green Paper consultation and of the Legal Aid Sentencing and Punishment of Offenders Bill which gave legislative expression to the policy.

The post-consultation policy shows signs that the government has watered down its prison reform proposals on both the supply and the demand side. The response to the consultation makes it clear that the government is “not aiming to cut the prison population – and we are clear that there must always be places for those that judges sentence – but we will manage a stable, effective system rather than undermining it by endlessly and irresponsibly inflating prison numbers for their own sake” (Ministry of Justice 2011). This disappointed many reformers looking for reductions in the use of prison which was but not surprising given that one of the main mechanisms for reducing prison numbers – the increased sentence discounts for early guilty pleas – was to all intents and purposes abandoned.

Disappointing too for reformers was the decision that the government would not push for community sentences to be used instead of prison. Instead, the government has decided to try to “transform community orders into more credible punishments that stop offenders getting to the point where custody is the only option. Non-custodial sentences need to be tough and demanding. For too long, they have fallen short of what is required” (Ministry of Justice 2011). Simultaneously making community sentences more demanding while moving them lower down the tariff of sentencing options no longer looks like a strategy for prison reduction. It rather spells the danger of escalating offenders towards custody by increasing the risk of failure to comply rather than diverting them from it.

The government’s commitment towards rehabilitation and a more measured use of prison has also been put at risk by the public disturbances in English cities in August 2011. Although the government has sought to use the fact that large numbers of rioters appear to be heavily convicted to remake the case for better rehabilitation, courts have adopted a harsh line on the remanding and sentencing of riot-related offenders. The prison population reached record levels in five consecutive weeks in September and October 2011.

2012 saw a new Justice Secretary appointed who published radical proposals to reform the delivery of offender services (Ministry of Justice 2013). The aim is clearly reduce spending by cutting the unit costs both of prison and probation and not by reducing the number of prisoners.

Justice Reinvestment In The UK Developments And Proposals

Policy

Notwithstanding the important differences between the USA and UK, a range of specific policy proposals drawing on JR have been produced in Britain in recent years. Attention was first drawn to the possible application of the concept in the UK in 2004 (Allen 2004), and since then, there has been a range of ideas put forward by academics, think tanks, and charities which look to apply various of the key elements of justice reinvestment. These include suggestions for:

(a) A much more locally driven system of so-called primary justice which would involve shifting control of prisons and key supporting services away from Whitehall to a local level and the creation of a local “safety and justice” budget to fund local prisons and neighborhood policing. This pot of money would be used to commission local services, either from existing providers or by setting up new local services. A local budget could include approximately 35 % of the prison budget, the administration budget for magistrates’ courts, local policing, and probation (LGIU 2009).

(b) An extension to the remit of locally based Youth Offending Teams (multiagency professional teams which deal with juvenile offenders) to the adult age group (LGA 2005; Allen and Stern 2007).

(c) More locally based management of the prison system by abolishing the National Offender Management Service (NOMS) which is the central government agency responsible for prison and probation services and replacing it with a network of Community Prison and Rehabilitation Trusts (CSJ 2009).

(d) Using funds earmarked by the government for prison expansion to strengthen measures in the community such as restorative justice which could reduce demand for imprisonment (RCP 2008).

The most thorough-going proposals have come in the House of Commons Justice Committee’s substantial report “Cutting Crime – The Case for Justice Reinvestment” (Justice Committee 2010). The report focused attention on not only how much is being spent on imprisonment but what alternative which uses the public money consumed by prison could be put if demand for prison places could be reduced. It also drew attention to how people going to and returning from prison are disproportionately drawn from the poorest neighborhoods and how targeted investment in these areas could help develop more initiatives both to prevent crime and improve reintegration of ex-prisoners. The report argued that the prison population in England and Wales should be capped with an objective of reducing it to two thirds of its then level. It coined the term “pre-habilitation” to argue that resources should be invested in the most deprived communities which produced the greatest numbers of candidates for custody and suggested that mainstream local agencies responsible for providing health, education, social care, and employment should be incentivized to do more to assist offenders subject to community sentences and returning from prison.

Building on the interest in places as well as cases, in 2011, a more detailed strategy plan was proposed by the influential think tank the Institute for Public Policy Research (IPPR) for the funds spent on imprisoning adult offenders for periods of less than 12 months to be devolved from central government to local councils so that they can put in place measures to deal with the causes of offending behavior. Councils would be charged back by the prison service every time someone from their local area was sent to prison for a period of less than 12 months. The IPPR also recommended that probation services should be decentralized and fully integrated into crime-reduction work locally, by placing it under local authority control (Lanning et al. 2011).

These proposals have so far had limited specific impact on policy makers, although the general thrust of the thinking that lies behind them – reduced use of prison and greater localism – resonates strongly with aspects of the rehabilitation revolution. There is however one specific current that underpins government policy on the provision of a whole range of public services which shares some features with JR – that is, payment by results or PBR. A number of government departments are moving towards an outcome-based system of payment for services. Funding for private or not-for-profit organizations involved in getting the long-term unemployed into work, for example, is paid exclusively or heavily based on delivering results – not just placing people in work but keeping them there, with payment made after results have been delivered. Similar initiatives are being piloted in respect to drug and alcohol treatment and have been proposed as a way of funding early intervention programs with children at risk.

In the justice area, the government has pledged to “pioneer a world first – a system where we only pay for results, delivered by a diverse range of providers from all sectors. This principle will underpin all our work on reoffending. This is a radical shift” (Ministry of Justice 2011). One aspect if this relates to diversification of the market – the government says they will no longer provide rehabilitation services directly without testing where the private, voluntary, or community sectors can provide them more effectively and efficiently. An Offender Services Competition Strategy was published in July 2011 which signals a series of competitions for contracts to run nine prisons and a range of community-based programs (Ministry of Justice 2011b).

A second aspect of this relates to the way contracts for the provision of services are framed. A key element of the approach to competition is to “continue to develop and expand a range of models where providers are paid based on the results they achieve. This will allow providers both to innovate and to ensure that value for money is achieved. Providers will be encouraged to put forward innovative models to focus more effectively on rehabilitation.. .” (Ministry of Justice 2011b). For example, a recently agreed contract to run Doncaster prison (which in fact predates the competition strategy) includes a 4-year payment-by-results pilot starting in October 2011. This contract, apparently the first of its type in the world, will mean that private provider Serco are held to account both for running a safe, decent, and secure prison and the reoffending of their offenders on release. For each year of the pilot, 10 % of the contract value will be placed at risk and will only be retained by Serco if they reduce reoffending by 5 percentage points. If they fail to achieve this target, then money will be paid back to the government. If they deliver more, then they will be paid more than the original contract price (Ministry of Justice 2011). Serco claims that the Doncaster prison scheme could see more than 15,000 fewer offenses a year if it hits its targets.

Practice

Alongside these developments and proposals for policy change, a number of practical pilot initiatives have drawn inspiration from aspects of JR. One of the first which claimed to be based on JR was the Diamond District initiative which operated in six London boroughs in 2009–2010. Multiagency teams including police and probation officers and local authority workers were located in neighborhoods with high numbers of people returning from short spells in prison. (The term diamond was coined to communicate the disproportionate value which would attach to reducing reoffending in these areas.) The teams offered enhanced resettlement support to prisoners returning to the neighborhoods. Although there was no obvious mechanism by which any savings to the prison system would be recouped into the communities concerned, the question has not been pursued since the £11million initiative did not find that the experimental group was reconvicted any less than a carefully matched control group – although interestingly the rates of reoffending for both experimental and control groups were well below the national rate. The evaluation of the project argued that “whilst the headline finding of the report is that there was no evidence of reduced reoffending as a result of the Diamond Initiative within the original cohort-this does not demonstrate that Diamond has failed as an approach: such a conclusion would be erroneous” (LCJP 2011).

Thus, despite the disappointing results, interest in justice-reinvestment-inspired schemes has not waned. Three pilot programs involving JR are under way at the time of writing each of which aims to reduce the demand for custody.

The first relates to juvenile offenders, for whom a Youth Justice Reinvestment Pathfinder Initiative was set up in early 2011. The Green Paper Breaking the Cycle proposed that local authorities should share both the financial risk of young people entering custody and the financial rewards if fewer young people require a custodial sentence. The pilots aim to test how this might be achieved.

Under the scheme, central government will be investing a proportion of the budget used to fund custodial places into grants for consortia of local authorities to commission alternatives to custody in four pathfinder areas. The aim is that as a result the use of incarceration for both sentenced and remanded young people in the pathfinder areas will be reduced by an agreed amount over a 2-year period. If the authorities fail to reduce their use of custody by the agreed amount, they will have to pay back the funding – or a proportion of it – to the Ministry of Justice. Pathfinders will be free to commission and deliver schemes in a way that best addresses their local needs and circumstances.

The second initiative known as the Financial Incentive Model has also been developed by the Ministry of Justice to test the extent to which local partners can work together more effectively to reduce crime and reoffending. This approach is being tested in six local areas: Greater Manchester and five separate London boroughs (Croydon, Hackney, Lewisham, Lambeth, and Southwark). The project covers both adult and youth aspects of the criminal justice system. The basic idea is that the Ministry of Justice would pay local authorities and service providers if they were successful in reducing court convictions and court disposals for adult and youth offenders in the local areas. Sharing the savings that accrued to the Ministry of Justice from the reductions would enable the local authority to reinvest further in crime prevention activity at the local level in line with their priorities.

The rationale for the project is based on the hypothesis that giving local partners more financial accountability for the demand placed on criminal justice services, such as courts, prison places, and probation services, will provide them with an incentive to work more effectively to reduce crime and reoffending locally and thereby to reduce that demand. Under the model, the local partners are free to implement plans to reduce crime and reoffending, targeting their resources on specific groups of offenders in line with the local priorities and crime patterns. Demand on criminal justice services will be measured using a series of metrics focused on offending that results in short custodial sentences and less severe sentences. Demand will be measured across two consecutive 1-year periods, with the measurement period starting on 1 July 2011 and closing on 30 June 2013.

The third initiative, which has attracted significant attention in the UK and internationally, is a novel form of financing services to resettle prisoners leaving Peterborough prison after a short custodial sentence – the so-called Social Impact Bond (“SIB”).

A Social Impact Bond is a contract with the public sector in which investment is raised from socially motivated investors and used to pay for a range of interventions to improve social outcomes. As improved social outcomes result in savings to government and wider benefits to society, the government agrees to pay a proportion of any savings back to the investors if the interventions succeed. The payments from government cover the initial investment plus a financial return which depends on the extent to which outcomes are improved. If the outcomes do not improve, investors lose their investment. The term “bond” is a misnomer because all of the capital is theoretically at risk should the project fail to make any impact.

In the Peterborough project, which was officially launched in September 2010, £5 million has been raised from 17 investors – mainly charitable foundations interested in a “mission-aligned” investment opportunity – to fund the provision of services to 3,000 prisoners returning to the community having served a sentence of less than 12 months. Investors stand to make a return if the three cohorts of offenders eligible for the service are reconvicted 7.5 % less frequently than a matched control group of prisoners from other prisons. Nationally about 60 % of short-term prisoners are reconvicted within a year of release, and few of these prisoners have access to support which might help them find a stable home, a job, and assistance with other problems which left unaddressed can rapidly lead back to crime. The funds are being used to commission not-for-profit organizations to provide intensive help before and after release – so-called “through-the-gate” services.

The attractiveness of the SIB to a range of stakeholders is clear. For government a SIB removes the financial risk that they pay for services that prove to be ineffective at addressing social needs and improving outcomes. For investors a SIB offers a potential return on investment – if reconviction events are reduced by 10 % across all cohorts, investors are expecting an annual internal rate of return of around 7.5 % up to a maximum of around 13 %, depending on the scale of the reduction in reconviction events (Disley et al. 2011). The SIB also offers the chance to use capital in a socially useful way. For service providers a SIB provides up-front funding for the delivery of services (so they do not carry the risk of not being paid). For the public and service users, funding raised through a SIB may pay for services that fill a gap in existing provision.

The first evaluation report on lessons learned from the planning and early implementation of the SIB at Peterborough did not find it possible to draw conclusions about or comment on any outcomes from the scheme. It raised a number of questions about its complexity of and the costs of establishing it – the intermediary who arranged the SIB, Social Finance, estimated that it has invested approximately 2.5 person – years of its resources, and more than 300 h of legal advice (provided pro bono), as well as specialist tax advice, in developing the SIB. The report also pointed out that the scheme is too small to deliver substantial “cashable” savings – “The ability of the SIB model to lead to identifiable savings for government is yet to be tested, if the SIB model is implemented on a larger scale” (Disley et al. 2011).

If this model were rolled out nationally, the report suggests that there could be incentives to “cherry pick” by prison or area – that is, for funders to choose sites for investment or indeed particular types of beneficiaries for the service who are likeliest to achieve improved outcomes – by implication leaving or “parking” as it is sometimes called more hard to reach people or places. More technical difficulties were also identified – for example, that future SIBs may face the challenge of sharing outcome payments across central and local government departments or other agencies who may stand to benefit from savings brought about by the intervention. Also SIBs in areas of work that currently receive statutory provision will need to devise outcome metrics that enable the government to isolate the effect of SIB-funded interventions from existing statutory services. Short-term prisoners do not usually receive any statutory help so the issue does not arise at Peterborough. The evaluation report also points out that using a Social Impact Bond to fund a new service in a field where no existing interventions are in place also “avoids the many difficult issues raised by the possible need to decommission statutory services in such circumstances – another possible challenge for future SIBs” (Disley et al. 2011).

Supporters of SIBs point to the fact that they provide a vehicle which could attract new money into underfunded activities like resettlement and community support for offenders. Over half the investment (by value) and half the investors (by number) in the Peterborough SIB are either using their endowment or investing in the UK criminal justice area for the first time.

Others are less convinced. The head of the Howard League, a leading penal reform charity reportedly described the system of payment by results for justice services as “nonsense.” “Using the example of a prolific burglar who has recently been released from prison, Frances Crook was quoted as saying: “You come out of jail, you’re sofa-surfing and you’re on drugs, but you clean yourself up, get a job and get a girlfriend. Who should be able to make money out of you? Public service is something which does great good and which we should value. If you introduce profit into public service it changes everything” (Civil Society Finance 2011).

Others have attacked the use of investment bonds more generally as “fairy dust, disguising short-sighted cuts that will do much social damage in future years. We get the social services we are willing pay for with our taxes: this is fool’s gold” (Toynbee 2011).

It will of course be some time before data is available to make an empirical judgment about the impact in criminal justice of the payment-by-results approach in general and the Social Impact Bond in particular. That has not prevented the government committing to applying the principles of payment by results across all services which reduce reoffending by 2015.

Conclusion

Justice reinvestment has come to have a range of meanings in England and Wales, and it is possible to identify three types of policy and programs.

First, there are relatively pure examples of initiatives that are true to what are generally taken to be the key tenets of the concept, aiming to transfer resources way from imprisonment and into community-based crime-reduction measures of one sort or another (Allen 2011). The Youth Justice Reinvestment Pathfinders and Financial Incentive Model fall into this category. Each is based at the local government level (albeit through consortia of local authorities in the case of the youth scheme), but it is not yet clear how much of a focus they will have in the particular neighborhoods whose residents are disproportionately imprisoned. These programs are all publicly funded with local agencies given incentives to reduce the use of custody through the opportunity to spend resulting savings but facing a concomitant risk of meeting additional custodial costs which might be incurred.

There is a second form of JR which involves the investment of funds from outside government into activities designed to produce positive social outcomes such as reduced reoffending. The Social Impact Bond is an example of a model which offers incentives and risks for investors; if the program succeeds, they will receive outcome payments from the government’s savings in prison spending produced by reduced reoffending. If the program fails, government pays for the prison places but not the unsuccessful attempt to reduce reoffending. The scale of likely investment in financial instruments such as this is not yet known. Nor is it clear whether Social Impact Bonds could practicably be used to replace existing activities rather than fund new pieces of work.

Some uncertainty also surrounds the third type of JR which is the approach to contracting based on payment by results. The hope is that attaching financial rewards to successful rehabilitation will promote innovation and that reduced reoffending will bring down demand for prison. But unlike the first type of JR, there is no commitment to reinvest any savings in communities. Unlike the second type, there is no outside funding brought into the system. Given the substantial budget reductions being faced by the Ministry of Justice, it is all too likely that PBR could prove a form of justice disinvestment rather than reinvestment.

Despite the range of JR-related initiatives in place in 2011, there are still possibilities for more extensive and deeper application of the approach. This is certainly the conclusion reached by the parliamentary committee which championed JR in 2010. In an inquiry into the role of the probation service the following year, the Justice Committee concluded that “the model of justice reinvestment explored by our predecessor Committee – of greater investment in a package of reforms to reduce the use of custody, including increased spending on probation services, allowing significant resources to be freed by halting the prison-building programme and enabling current inefficient prisons to close – has not been fully exploited; this will undoubtedly impede the pace at which capital can be transferred from prisons to community-based interventions and will therefore continue to leave probation services and local communities deprived of desperately needed resource” (Parliamentary Select Committee on Justice 2011).

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