18/05/2016 09:28 BST | Updated 18/05/2017 06:12 BST

How Prison Entrepreneurship Could Break the Cycle of Reoffending and Save Taxpayers Billions

Despite the fact that reoffending by ex-prisoners costs the government and wider society at least £4.5 billion a year, success in reducing recidivism has been limited. Almost half of prisoners reoffend within a year of their release, with young and short-sentenced prisoners actually more likely to reoffend than not. At a time when the public sector is attempting to consolidate and become more efficient, the billions spent every year catching and imprisoning repeat offenders is an unacceptable waste. A new report by the Centre for Entrepreneurs - From inmates to entrepreneurs: how prison entrepreneurship can break the cycle of reoffending - puts forward entrepreneurship as the solution, proposing that prisons prepare their inmates for starting a business upon release.

Current rehabilitation, when concerned with employability at all, has focused on traditional employment. This is problematic for two reasons: the first is deep-rooted reluctance to hire people with convictions, with three quarters of employers willing to discriminate against applicants with convictions and only a third of ex-prisoners finding work two years after release. The second is the changing nature of an economy where entrepreneurship and self-employment are becoming ever more widespread - startup rates continue to scale new heights, while the proportion of the workforce that is self-employed has grown from 9% in 1975 to around 15% today.

Both research and common sense suggest that employment is one - if not the key - factor in reducing reoffending. Yet jobs for ex-prisoners are not forthcoming, which is why we believe entrepreneurship should be seriously considered as a viable alternative towards rehabilitation. Our argument goes beyond one of pure necessity: academic studies, as well as our own surveys of prisoners, strongly support the notion that entrepreneurial attributes and interest in entrepreneurship are more prevalent among the prison population. Our own survey of almost 100 prisoners in four prisons carried out in partnership with Catch22 and Tempus Novo revealed that 80% are interested in starting a business while 60% would like to take a business course while in prison. Equally impressively, when compared to high-growth entrepreneurs, slow-growth entrepreneurs and corporate managers on their entrepreneurial attributes, prison inmates came in second.

Nonetheless, unleashing the entrepreneurial drive innate in many prisoners will require more than just a little advice and education before leaving them to their own devices. While an exciting and fulfilling path, entrepreneurship comes with its own difficulties - including a lack of external structure, limited interaction with colleagues, and unpredictability of income - especially when starting out. In our report we argue that if entrepreneurship is not to become yet another dead-end for a highly vulnerable group of people, well-designed prison entrepreneurship programmes must be made available to every pre-release prisoner (75,000 per year) interested in starting a business.

What such a programme looks like will depend on the needs of particular groups of prisoners and the expertise of individual providers. In our report we discuss in detail the decisions and challenges any potential programme provider will have to face. While we are open to various ways of designing a programme, we believe there are certain things a programme must do if it is to be successful. These include offering grants rather than loans (prisoners' financial issues are well-documented), avoiding the pitfall - known informally as "cherry-picking" - of selecting those prisoners least likely to reoffend in the first place, and making sure that programmes follow prisoners "through the gate" by linking support inside prison with support outside.

While barriers such as restricted Internet access, limited day-release opportunities, reductions to the prison service budget and staff, and the overall difficulty of reintegration after prison have hindered the delivery of entrepreneurship programmes and rehabilitation in general, recent developments hint at a brighter future. Despite so far failing to live up to its promise, the Transforming Rehabilitation (TR) agenda is designed to give charities and businesses a greater role in post-release rehabilitation. Similarly, recently announced reforms to set up several innovative "reform prisons" and give prison governors more autonomy will - if implemented the right way - open up many more opportunities for innovative ventures within prison walls.

Any governor interested in reducing his or her prison's reoffending rates - something that will be measured in the forthcoming prison league tables - should seriously consider establishing an entrepreneurship programme alongside other core programmes addressing prisoners' diverse needs. The potential payoff is huge: we estimate that an entrepreneurship programme made available to every interested pre-release prisoner could save the government and wider society up to £1.4 billion annually at the comparatively low cost of £82 million. Our report makes a series of recommendations on how this might be achieved, including the creation of a government "prison entrepreneurship fund" and the formal recognition of self-employment in the resource allocation, official statistics and performance measures of the prison and probation systems.

Of course, not every prisoner is a born entrepreneur. But among those that are interested and capable of working for themselves, ensuring they get the support they need is a sure route to reducing reoffending. If successful, a greater emphasis on entrepreneurship will also help address ex-prisoner unemployment and welfare dependency, as well as create further employment opportunities while generating tax revenues. Most importantly, however, it will give ex-prisoners the fresh start they desperately need and surely deserve.