What economics can teach us about prisons
Value for money is particularly poor. UK government departments are routinely brought in front of the Parliament’s Public Accounts Committee to explain themselves if money is wasted. The Ministry of Justice, with an annual budget of some £7bn, should receive greater scrutiny. The average cost of keeping someone in prison is £30,000 to £40,000 a year – more than most expensive private boarding schools. Yet re-offending rates are nearly 60 per cent for those in jail for less than 12 months, and the cost to the economy from re-offending alone is estimated at some £9.5bn to £13bn a year.
Economics gives us the tools to evaluate policies to test correlations and prove causality. But we ignore the fact that most known forms of crime have been falling consistently. This is true both for crimes reported to the police and those that are outlined in the annual crime surveys. Why is this? It is not because we have doubled the prison population in the last 20 years. The decline is due to other factors. Getting richer helps: there is more to lose if caught. So is getting older as a nation: peak crime age is around 24. Better security technology also contributes: automated cash tills make it more difficult to commit retail crime and increased use of sophisticated locks and alarms acts as a deterrent. And so on…
In truth, people in prison are there in greater numbers because there are more offences now classified as meriting a custodial sentence and tighter sentencing policy has resulted in longer sentences. And yet there is no evidence that raising a sentence from say two to four months or from three to five years makes any difference to the likelihood that someone will commit the relevant crime. What the evidence does suggest is that the only thing that might affect the willingness to commit a crime is the absolute certainty of being caught. This implies much more money spent on detection. This will not be easy as resources are being cut back aggressively.
Alternative solutions, such as community sentencing are less costly and have a much lower re-offending rate. Even more important is understanding what does reduce crime. Offenders tend, on average, to be under-educated and much more likely to be unemployed than the rest of the population. Women prisoners are known to have already been vulnerable before committing crimes with 50 per cent of them victims of domestic abuse and one in three victims of sexual abuse. Many are drug and alcohol dependent. Furthermore, whereas only 1 per cent of children are in care in the UK, about a quarter of adult prisoners have been in care at some point in their lives.
And then, on leaving prison, life chances decrease. It is harder to get a house, to obtain credit or insurance, and to get a job. Only 25 per cent of prisoners enter employment on release – and their children who had been separated from them are more likely to offend too at some stage.
Keeping people in the community, tackling mental health issues and better education and employment are key to reducing crime. That is what the economic evidence suggests and where the emphasis of policy should be.
Vicky Pryce is the author of ‘Prisonomics’, Biteback Publishing, and is a patron of Working Chance, a charity that finds quality jobs for women ex-offenders.