The case for investing in better justice outcomes

In the handover notes for the incoming Prime Minister, there will surely be reference to the complexities of funding much-needed investment in our public services. 

The UK’s public finances remain stretched. But while it’s arguably less high-profile than defence, health, or welfare, the debate over financing justice – the culmination of the Justice for All event series – is central to keeping our communities safe.

The issue with justice is not just that it’s underfunded, though that remains a significant hurdle. There have been some significant increases in investment in recent years, but funding for the Ministry of Justice last year was 14% lower, in real terms, than 2007/08. Real terms spending per person (adjusting for population growth) has declined by 24% in the same period, compared with real-terms growth in other departments.

The other critical issue is how funding is targeted. Extra investment usually goes into dealing with crises – responding to the relentless rise in the prison population, the impact on the probation service and court backlogs – rather than preventing offending or improving outcomes. While there are signs of backlogs starting to reduce, there remains much to do. Delays in courts and tribunals are impacting the quality of justice; overcrowded prisons struggle to rehabilitate offenders, and excessive probation workloads can hamper effective supervision. 

There is also a massive cost to this. The overall resource cost of prisons in England and Wales in 2023/24 was £4.7 billion. Reoffending costs the country £18 billion each year in economic and social costs. 

Against this backdrop, the Justice for All series has been examining innovative financing models that can bring forward additional capital in ways that deliver results and unlock significant savings. There are examples of proven schemes that prevent offending, reduce reoffending, and help people get their lives back on track, which offer potential models for additional investment. 

These include: 

• Offender 2 Recovery – funded by the West Midlands Police and Crime Commissioner and supported by investment from local businesses. It targets prolific offenders, particularly shoplifters, whose offending is driven by drug addiction, and supports them by referring them into residential rehabilitation. The return on investment for successful rehabilitation is dramatic.
• The Skill Mill – a Social Impact Bond provided the funds for a programme targeting young people at risk of further offending, providing paid work placements on environmental projects, with a vocational qualification. The aim was to move them towards employment or further training and prevent reoffending, and 84% did not reoffend.
• Prisoners Building Homes – a scheme where prisoners and ex-offenders gain experience and skills building affordable, low-carbon homes on public and third sector sites. 89% of participants gain employment on release and the reoffending rate is 5%, with the scheme now seeking investment to scale up the model.

The government has committed to promoting the ‘impact economy’, including through the establishment of the Office of the Impact Economy and the launch of the Better Futures Fund: a £500 million fund to support improved outcomes for children, families and young people, including the prevention of youth funding. 

While funding challenges remain, there is a clear opportunity to build a pipeline of justice-focused investment that ultimately delivers better outcomes and lowers long-term costs.

Richard Hughes
Partner, PA Consulting