For “Advancing opportunity: routes in and out of the criminal justice system”, The Smith Institute, June 2008
Reducing reoffending – an offender-centric business model
This paper describes how an “offender-centric” business model would work to reduce reoffending. It is written as if the model already existed, in around 2015. An account is also given of how such an apparently radical model might come to gain acceptance.
The paper’s overall thesis is that if the government is serious about using the offender management system as a lever to drive down reoffending rates, it needs a new business model for the service which has the right kind of incentives.
To explore this further, let us introduce an imaginary private company called Reducing Reoffending plc.
Reducing Reoffending plc
Reducing Reoffending plc has been set up for one purpose: to reduce the level of re- offending in the UK population. It operates under a contract to the UK government and is paid solely by results. The company is financially rewarded if it shortens the average time it takes for first-time offenders coming into contact with the justice system to desist from reoffending. The pay of its chief executive and directors depends entirely on the extent to which this goal is achieved.
The incentive to reduce the average length of criminal careers means that Reducing Reoffending plc will continue to gain commercially from successful delivery even as its customer base shrinks.
Reducing Reoffending plc’s management team have been to business school, so they follow certain principles of good business strategy and management:
- Understand your customers
- Develop a tailored and targeted product range
- Involve customers in product design
- Design an organisational structure that supports your business strategy
We will now explore how the company might apply each of these principles to its offender management operation.
Principle 1: Understand your customers
Reducing Reoffending plc knows that it will generate a profit only if it is able to provide services to offenders who are ready to make a change to their lives and desist from crime. Supplying services to those who are not able or willing to change will generate no profit for the company. It has, therefore – in line with good marketing practice – segmented its customer base along attitudinal lines. An old-fashioned demographic or crime-type segmentation is not helpful for this organisation, because it needs to know about the likely behavioural response of its customers to the services it wants to provide.
Using available data and research on offending careers, criminogenic need and risk profiles, three segments are identified:
- those who can’t change(perhaps because they are drug abusers, or have mental health problems);
- those who could change but won’t change(because they choose to be criminals for whatever reason); and
- those who will change(in other words, those who do not want a criminal career and are willing and able to change).
The diagram below summarises how this simple segmentation might look, where ability and willingness to change are the two variables used to characterise the customers.
Figure 1: The segmentation of offenders along attitudinal lines
The early estimates of the percentage of offenders in each segment are: 50% can’t change, 25% won’t change, and 25% will change.
Principle 2: Tailor and target your product range
The company provides a different service offering for each segment. It has a screening process to identify which segment an offender is in.
- The Can’t Change market is offered no services direct from Reducing Reoffending plc, but is directed to other organisations that can address underlying factors such as drugs, mental health and illiteracy. This is a worthwhile investment for the company because it boosts the potential size of the Could Change group.
- The Could Change segment is screened to identify those who belong in the Won’t Change sub-sector. No services are offered to this market. Indeed, they are referred on to Punishment & Deterrence plc for processing.
- The Will Change customers receive most of the company’s attention. There is a substantial research and development budget deployed to develop products that meet the needs of this segment, and these customers are engaged in the process of developing them.
Principle 3: Involve your customers in product design
Reducing Reoffending plc knows that it is most likely to achieve its business objective and maximise profit if it co-designs its services in partnership with its customers.
Offenders in the Will Change group (those that have demonstrated that they are committed to changing their lives) are given vouchers that they can use to build their own rehabilitation service package.
- With the support of a company mentor, the customer designs the package that they think will work for them.
- Termination of an offender’s sentence will be contingent on them completing the co-designed rehabilitation package successfully (which is likely to have a restorative justice element to it).
- Engagement with a company mentor is required throughout the process, and non-completion leads to a reprofiling of the offender and a possible shift to the Can’t or Won’t Change segments (and a withdrawal of services).
Reducing Reoffending plc has built conditionality into much of its service, alongside other public behaviour changing methods. Thus, prisoner release depends upon successful conclusion of rehabilitation programmes such as literacy, numeracy, anger management or parenting programmes. The concept of indeterminate sentences for public protection (IPPs) has been shifted to indeterminate sentences for rehabilitation. This cuts both ways, as early completion of rehabilitation results in early release. This latter aspect was incorporated at the instigation of offenders involved in the service design. Conditionality served, in part, to counter the notion that the new approach was “soft” on criminals.
Principle 4: Design an organisational structure that supports your business strategy
Reducing Reoffending plc specialises in designing and delivering rehabilitation support services to customers who are willing and able to change. Its staff are recruited and trained for this express purpose.
The company does not provide services in markets where it has no competitive advantage or operational expertise. This means:
- It does not compete in the custody and punishment market, where the public and private prison service providers dominate.
- It outsources highly specialised services – such as those designed to encourage customers to join and remain in the target Will Change group – to niche providers (some of which are from the voluntary sector).
- It forms collaborative partnerships and networks with organisations that can have an upstream impact on the size of the company’s target market. This includes organisations that help potential customers deal with their drug, illiteracy and other social problems.
Why might it happen?
The coincidence of many factors might produce the conditions for Reducing Reoffending plc to be born:
A new government with a new mandate
A new deal between the government and the electorate could cast the balance between tax and public expenditure not as investment versus costs but as money well spent versus money wasted. In these circumstances higher public expenditure would have to be earned by first delivering higher value for money. Taxation would in effect be capped at 40% of GDP unless or until public service performance were to improve noticeably.
Offenders as customers
The beauty of having a business for reoffending reduction would be the absence of emotion and history in deciding how to do it. Thus Reducing Reoffending plc could adopt best organisational practice specifically by organising around offenders.
While society is the customer for punishment and incarceration, the offender is the customer for rehabilitation, just as you or I are for our healthcare. Emotionally we find it difficult to divide our response to a street thug or burglar into a desire for retribution on the one hand and concern and care on the other. A business has no such difficulty, when given a clear brief and not required to deliver conflicting objectives.
The world is awash with private, public and voluntary organisations that have transformed the quality and efficiency of their services by concentrating on the attitudes and behaviour of their customers.
Sticking to one’s knitting
Although a technical rather than visibly political issue, another enabler of Reducing Reoffending plc might be the realisation that the prison service was not the right organisation to rehabilitate to any significant extent. The prison service has proved exceptional in terms of preventing prison escapes and housing a prison population well in excess of national capacity without major incident, and it has many rehabilitation programmes.
But, as extensive research and theory have demonstrated, organisations should “stick to their knitting” and be acutely aware of what they are good at. Just as conglomerates have failed, so it might prove impossible to have the culture, processes and systems for punishment/incarceration and rehabilitation in the same organisation.
Recognition that the criminal justice system needs new institutions
The criminal justice system has depended on new institutions for really significant change and improvement – the Bow Street Runners, police forces, magistrates courts and the introduction of prison as a liberal alternative to transportation, among others.
The 20th century saw, in the main, the development and consolidation of the criminal justice institutions. But their major reform and innovation in service slowed as the Treasury persisted with institutional funding. Leaders within and without the criminal justice system realised that the logjam in performance could be cleared only with new institutions.
High-quality analysis
While the data had existed for years (from police, court and offender records), it took some bright young analysts to turn it into information to shift ministers’ and civil servants’ thinking.
The first change might be to develop a far more differentiated – personalised – service offer. The old offender management system grouped prisoners into a small number of security classifications (category A, B, C prisons and so on), and the probation service used four classifications based on assessed risk and severity of sentence.
But other countries had developed far more sophisticated systems that allowed them to categorise – and hence deal with – offenders in a much more targeted way. The Netherlands, for instance, operated a system based on 40 offender types and 40 offender pathways, each with a different configuration of services designed to rehabilitate offenders.
The first customer segmentation in the UK distinguished between offenders who were “young thieves”, “career criminals” and “mid-life mistakes”, each demanding a very different response from the criminal justice system than did the essentially one-size-fits- all approach of the past.
Conclusion
This paper has described one possible future of a reformed system. The questions it raises are twofold. First, will it take a Reducing Reoffending plc to bring about the change needed, or is a milder, less challenging option realistic? Second, are the circumstances described above, or something like them, feasible?
The problem with the radical option described is that it overturns many existing power bases, jobs, roles and rewards. Big change is always destabilising. So a question arises about whether incentives from within to change are sufficient for customers’ interest to be put first. I would like to think that somehow vision will triumph from within the system. If it does not, the politicians must do what they are elected for.
