11/02/2013 14:18 GMT | Updated 13/04/2013 06:12 BST

Justice Reinvestment - Adding Up the Benefits

In the flurry of activity around the Justice Secretary's announcements on rehabilitation and the speedy roll out of payment-by-results in justice, some other potentially more interesting financing schemes are being overlooked despite very promising results. Justice Reinvestment, the shifting of resources from unnecessary use of prosecution and prisons to community based crime prevention initiatives, points the way to meeting the Coalition's twin aims of greater effectiveness at lower cost.

When Chris Grayling outlined his plans to shake up rehabilitation, many reflected that it was shame to halt pilots mid-way without learning the lessons before national roll out. However, two of the pilots had already demonstrated good results after year one and were themselves built on several years of research and evidence. In London and Greater Manchester justice reinvestment pilots are saving cash and preventing crime. Both are continuing, and when the final results are published later this year, I expect Police and Crime Commissioners and Local Authorities will be taking note.

Justice reinvestment refers to ways of redirecting funds currently spent on processing and dealing with offenders into community-based prevention that tackle the causes of crime. Savings to the criminal justice system (for example on police, prosecution, courts probation and prisons) are reinvested in local alternatives. Applied sensibly, these in turn further reduce demand for more expensive interventions, creating a virtuous circle which produces greater safety at lower cost. In times of fiscal constraint such an approach offers a potentially key lever for investment in local services to cut crime.

The Manchester and London pilots are delivering strong results. In the capital in the first year alone, savings downstream have meant £950,000 has been ploughed back into communities upstream, to spend on further initiatives to reduce reoffending. In Greater Manchester it has been over £2.6 million.

This success in not surprising given that evidence from abroad and in the UK for justice reinvestment is promising. Analysis in North East 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. A more recent study found that it cost the taxpayer £2.5 million in 2009/10 to send non-violent and non-sexual offenders from the London borough of Lewisham to prison for periods of less than a year. The authors concluded that considerable funds could be made available to local agencies to prevent reoffending.

Where next for justice reinvestment? With the election of Police and Crime Commissioners and commitments from the Secretary of State for Communities and Local Government to devolve greater powers to local authorities, the Criminal Justice Alliance believes now is the time to revisit the idea of justice reinvestment and give proper consideration to what it can achieve.

Previous governance structures in the UK have not lent themselves to this approach in the same way as, for example, in the US where the concept originated. As Rob Allen wrote in an essay published by the Criminal Justice Alliance "In the US the shared responsibilities exercised by counties, states and the federal government in running and financing imprisonment provide opportunities to introduce financial incentives to control, 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."

However, the situation in England and Wales has now altered significantly. The recent decision to hand financial responsibility for children remanded in custody over to local authorities has contributed to reductions in child imprisonment as local councils seek more effective and less costly alternatives. Similarly the creation of Police and Crime Commissioners and possibilities of further devolution present risks and opportunities, but in the changing landscape we need to ensure that local areas that prioritise crime prevention are rewarded for their efforts. Without structured investment, early intervention and prevention can so easily be relegated to the sidelines whereas they should be central concerns.

Finally, we need to go further in engaging the people most affected - those who reside in high crime areas and are the most likely victims of crime - in the decisions about how best to deploy resources to promote community safety. It is in the neighbourhoods that suffer most from crime that the final say should be taken about how savings from the unnecessary use of prosecution and punishment are put to more productive use.