Lock them up: whichever way you calculate the costs, prison is a bargain

The Times ^ | 12 May 2004 | David Green

[Kepitalizm]

THE Government is trying to cut the number of prisoners in our jails. Recently it persuaded Lord Woolf to lean on judges to stop sending so many offenders down because of Treasury concern about the cost. Successive home secretaries have found it difficult to persuade their colleagues to part with the money for extra prison places.

But is prison really too expensive? It is time the Treasury did some proper costings. It might be surprised by the results.

There has been a long debate in America about how to calculate the costs and benefits of prison. One study by Professor John DiIulio estimated that the annual cost of keeping a criminal in jail was $25,000 (£14,000). He compared this with the total cost to society (including policing, insurance, injuries, replacing stolen property, and household expenditure on security measures) of allowing the typical offender to remain at large: $70,098. The resulting cost-benefit ratio is 25,000: 70,098 or 2.80. On these assumptions he thought it worth jailing about 75 per cent of criminals, but a waste of money to imprison low-rate offenders, who impose a cost on their fellow citizens of less than $25,000.

Based on a similar estimate of the social and economic costs of crime, how many more prison places should be provided in England and Wales? The Home Office thinks there are about 100,000 persistent offenders who commit about half of all crime and that about 20,000 are in jail at any one time. Would it be worth incarcerating the other 80,000?

All such estimates are based on assumptions that can be tweaked to get the answer you want. Rather than opting for a single set of assumptions, let us explore a range. We know that it takes about £105,000 in capital costs to provide an additional prison place, an investment that can be spread over many years. In 2001 the running costs of a typical prison place were £23,063.

The cost to society of leaving prisoners at large depends on how many crimes each offender commits a year and the damage done. Take your pick from the different ways of working it out. Each time you do the calculation, the benefits of prisons get larger.

A Home Office study by Professor David Farrington of Cambridge University monitored for two years the reconvictions of a control group of young offenders released from custody in 1997 and 1998. They were convicted on average 2.57 times per year and the average cost of each crime in its broadest sense was £1,923, a total cost of £4,942. No serious scholar believes that convictions measure the actual rate of offending, and from police records, Farrington thought that this figure should be multiplied by at least five, producing 12.85 crimes at a total cost of £24,710. In this case, for every £1 spent we save £1.07.

However, when the Home Office made a similar calculation of the crime-reducing effects of one of its programmes it not only multiplied the number of convictions by five it further multiplied the result by 4.2 to correspond to the British Crime Survey, which has consistently revealed more crime than police records. This method produces a total number of 54 offences per year, which in turn produces a total cost of £103,842. For every £1 spent we save £4.50.

It doesn’t stop there. Farrington returned to the fray expressing doubts about the five multiplier and cited his own study of 18-year-olds in South London, which found that only about one in 30 crimes led to conviction. So the 2.57 convictions should be multiplied by 30 to arrive at the number of offences, 77. This produces a total social cost of £148,071. For every £1 spent we save £6.42.

But even this may be an underestimate if you use prisoners’ own reports of their behaviour. A Home Office survey of prisoners in 2000 found that the average offender carried out 140 offences a year. According to the Home Office, the average cost of crimes against individuals and households (excluding commercial crime) is about £2,000. An offender committing 140 crimes per year would, therefore, impose costs on society of £280,000. If true, for every £1 spent on prison, we would save £12.14.

Even if we make the highly unrealistic assumption that criminals commit only the offences for which they are caught and convicted, prison is good value for money. But when we make more accurate assumptions, based on official crime figures and Home Office estimates of the full social and economic costs of crime, incarcerating persistent offenders is not only good value for money, it is a bargain.

The author is Director of Civitas