The coalition is aiming to both reform the justice system and dramatically cut its budget. Filmmaker and criminologist Roger Graef, who has campaigned for reform of the system for many years, believes it is a crisis that should not be wasted.
Most people think we need prison as a deterrent, that tougher sentences mean less crime.
THE JUSTICE DEBATES
Listen to Roger Graef and Harvard criminologist Professor Chris Stone debate the issues surrounding criminal justice:
But Home Office research shows that many young offenders already think the penalties are higher than they actually are - and still do the crime.
For persistent offenders, who do most of the crime in the UK, prison isn't so much a deterrent as an occupational hazard.
The single biggest predictor of future offending is having a brother or parent convicted before a child is ten. That means each conviction increases the likelihood of a younger brother or son going into crime. Is that what we want from the justice system?
Time for change
The promised sentencing review by Justice Secretary Kenneth Clarke is not only a chance to reduce the prison population, but also to save money.
Many of those in the criminal justice system are repeat offenders
Both propositions have merit. The question is - how one will affect the other? Most criminal justice professionals agree that there is waste in the system. Even though crime is falling, it just doesn't work very well.
But the prospect of cutting £2bn from a £9bn budget is so radical that it calls for a drastic rethink of what we expect from the criminal justice system.
Given the failure of the War on Drugs, our overflowing prisons, and the high reoffending rate among those leaving prison, such a rethink is long overdue. Never waste a good crisis.
For a start, the Justice Secretary's plan to largely eliminate short sentences should reduce the prison population significantly.
Given the high reoffending rate, and the fact that many leave prison jobless, homeless, addicted and without family support or probation supervision, a community sentence that involves more positive handling of their offending and addiction must be a good thing.
Critics argue that keeping offenders off the street for a few months prevents them from committing crimes while inside. It's what Michael Howard meant when he said that "prison works".
But if that happens at the cost of their job, relationship or home, it merely defers for a few months the problem of what to do when they come out, making it more likely they will return to crime for lack of alternatives.
Another opportunity to change the impact of the system on victims and offenders lies in the government plans to expand the use of Restorative Justice, in which victims and offenders meet to discuss the wider impact of the crime than allowed in court.
Changes in the criminal justice system could free up police time
Although not all victims and offenders take part - and the offenders must plead guilty - both parties have a far higher satisfaction rate than with conventional trials.
The media and politicians often cast RJ as a soft option compared to tough sentences. But I know from research and filming it that most inmates find it much tougher than prison to face their victims, and to hear the emotional damage they have caused.
If the point of the justice system is to get offenders to take responsibility for their actions, and to support victims, Restorative Justice does a far better job.
What victims want is first, reassurance it won't happen again; second, an explanation as to why they were chosen; thirdly, an apology, and where appropriate, compensation. Fourth and lastly, comes punishment.
Restorative Justice provides victims with that order of satisfaction.
Conventional court provides only punishment, with occasional compensation, and only temporary relief from repeat victimisation. Indeed too often, offenders see themselves as victims of an unfair justice system, and seldom think of the real victims of their crimes.
To reduce the prison population, Clarke should also address the thousands of inmates serving sentences long beyond their tariff set by the court.
These so-called Indeterminate Public Protection sentences were designed to keep people inside if they were deemed still a danger to themselves and others. That judgement is made by the Parole Board.
Kenneth Clarke may have to close prisons to save money
But there are so many more IPP prisoners than first expected, and so few slots with the overworked Parole Board, the vast majority of these prisoners are left in destructive limbo.
At £40,000 per prison place per year, it is hugely wasteful of scarce prison resources, and deeply demoralising for prisoners and their families.
But here's the catch. To save money from the prison budget, Clarke will have to close whole prisons.
The running costs of staff and overheads are constant whether or not prisoners are in them. Indeed the prisoners are a marginal extra. So unless you close a prison, the savings from cutting the prison population are pretty minimal.
So there's the challenge to Ken Clarke. The 1989 Tory white paper said prison was "an expensive place that makes bad people worse". They were right then, and he is right now.
Let us focus the reduced prison resources on those who really are a danger and need that attention.
Let us move resources into the community for offenders who can be safely supervised there, and encouraged to meet and pay back to their victims and local people so that everyone benefits.
Roger Graef is a filmmaker and criminologist. His series of debates on the criminal justice system with Professor Chris Stone from Harvard begins on the Today programme on Wednesday 22 September and runs across the week.
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