A revolution in the head: The spending review and criminal justice reform

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A revolution in the head: The spending review and criminal justice reform

Boris Johnson preparing for appearance on the Andrew Marr show

This autumn, the Government will publish its Spending Review, which will set the amount of money various government departments will have to spend over the next three years. On paper, the Spending Review involves dispassionate analytical rigour, clear goal setting, demand projection and financial management all coming together into a level-headed, ultra-rational process, producing an objective set of spending plans that would make Robert McNamara proud.

However, this calm model of the exercise is far from the reality. Over the course of the summer, officials and Ministers are sweating it out, engaged in fiery multiple-person, multiple-round, multi-strategy negotiations right across Whitehall. One on side, officials in the various departments of state will be fretfully trying to demonstrate to the Treasury that they have credible answers to questions like how much do and will public services cost; how much is demand for them projected to grow over the period; what is the relationship between spending and outcomes? From the Treasury’s side, the spending teams, operating in the cool shallows away from the public gaze, and staffed by officials indoctrinated from birth to view proposed budgets with scepticism, lie in wait to savage loose thinking from what they pejoratively call ‘spending departments.’

Much of the heat in the Spending Review is generated because it is an inescapably political exercise. The feverish politics of the Spending Review, where heated political manoeuvring, passionate lobbying and intense brinkmanship, fundamentally alter its outcomes. For example, we know that, in 2015, Secretary of State for Department of Culture, Media (and also) Sport Maria Miller was reported by the Financial Times to refuse to accept any cuts to her department initially. When a leak from the Treasury revealed that they were discussing abolishing her Department entirely, the Culture Secretary agreed a 7% cut, slightly better than average, only two weeks later.

Moreover, each Spending Review always emerges blistered by the fire of ministerial ambition – each Spending Review is just one of a series of negotiations where the people involved have long memories. Ministers often have their sights set on higher office, and political capital can be gained by opting for larger pain now for jam tomorrow. This a standard principal–agent problem: agents are motivated to act in their own best interests, which are contrary to those of their principals. In this case, it is hard to motivate an aspirant politician to act in the best interests of the department she is temporarily in charge of, if they can see political gain for themselves in the future.

One would hope that the cold, cool rationality of data and analysis would cut through the sweltering heat of this political furnace. But necessary data is often absent, assumptions are often wrong and modelling often fails to grasp with the complexity of the world outside the departments. In a recent appearance before the Justice Select Committee, the outgoing Permanent Secretary, Sir Richard Heaton, revealed to MPs what has long been known about the 2015 spending review: ‘The whole of the 2015 spending settlement was insecure… (the Treasury) were having to bail us out… Twice a year we had to go cap in hand to the Treasury and it was not a great position for the department to be in.’

And to all of this burning energy is trapped in the pressure cooker of time. Officials are often asked to move from proposing incremental changes to existing policy and practice to make predictions on big things (prison population, demand for court hearings) with often only with a few days’ notice. I have personally had to write spending bids with 24 hours’ notice, on a policy area I only dimly understood, with pretty hazy cost data. In those circumstances, the difference between sticking my finger in the air and the superficially reasoned memo I sent was pretty negligible.

Insufficient data, limited understanding of demand, vaulting political ambition and low level skulduggery and crazy deadlines all combine to produce a set of judgements that, nonetheless, set policy, and a train of events, that can be the difference between whether a hospital waiting time is four hours or more, whether a family struggling will get assistance or not, or whether a victim will have their day in court, or not.

Red Cell: Patrick Maguire from Proof magazine, issue 4


No good advice

After huge outlays of public spending to deal with the covid-19 crisis, this coming autumn has the prospect of being a moment of reckoning in criminal justice reform— the backlogs that covid-19 has exacerbated are producing bulges in demand in a system that was already coping poorly with the rising complexity of demand it was being asked to deal with. Adding in a further 20,000 police officers is only likely to increase the demand on the system. A promised White paper on sentencing, likely to be announced before the Spending Review, is likely to set the future direction of demand.

So what strategies are open to the Ministry of Justice in the Spending Review? One strategy is to try to make things cheaper. This was essentially the strategy in 2010 and 2015. The prison service experienced deep cuts in spending but, instead of delivering this via having fewer people inside and closing prisons, what happened instead was a dramatic drop in staffing levels in prison (and consequent increase in prison violence). It was easier to pay for fewer staff than it was to close prisons. In other places, cheaper did not mean the same for less. It simply meant less. The Legal Aid budget was slashed, and the right to legal aid radically curtailed. The CPS was similarly cut to the bone. Over at the court service, a different story played out— investment in technology was accompanied by radical selling off of the court estate, a focus on ‘efficient’ court hearings, the halting of recruitment for magistrates and limits placed on sitting days. This strategy was cheaper in future through investment now.

However, the sum total of the cheaper strategy has this been that it has left the justice system pretty broken. Victims are waiting longer than ever to get justice in the courts, self-harm and violence within prisons are at record levels, and the reforms to the probation service, which were going to lead to a rehabilitation revolution, completed failed. The recent data around the shockingly low convictions for rape are just another example of a justice system that has suffered from the cheaper strategies adopted in 2010 and 2015 Spending Reviews. And this plague of crises across the justice system existed before COVID-19 struck, but the pandemic has exacerbated these problems still further.

Everything you ever wanted
An alternative strategy is to lobby for a large and general increase in supply to cope with this demand. The downstream agencies in the criminal justice system will need to increase their workforces and their capacity to handle both the clearance of the backlog but also the extra cases likely to arise from having more police anyway. Going for more money for everything you ever wanted is partly about dialling back the clock to the highpoint of resources experienced in the mid-2000s but also about equipping these services for the challenges of the 21stcentury through better technology.

Yet adopting this strategy is not a just case of increases so the system is able to cope with more cases. Demand is not necessary a linear, volume driven phenomena. As the first results of the Police Foundation’s strategic review of policing suggest, crime continues to be lower but ‘the nature of the threats, risks and harms to which we are exposed have become more varied and complex’. This complexity is likely to place particular demands on the costlier parts of the criminal justice system— namely it is likely to require more Crown Court trials (where the pre-existing backlog has been made even more acute by covid-19) and more prison spaces.

Yet the priorities of a government, intent on investing in the NHS, in infrastructure and in unanticipated and acute economic recovery may well feel that, outside of the additional prison and probation investments already made, that there is not the money nor political will for such an expansion of capacity. With some in Treasury already feeling like they’ve had their fingers burnt by spending on court reform which has not generated the promised savings or efficiencies, there may well be doubt as to whether investment in the hands of the Ministry is sending more good money after bad. The Chancellor has already indicated that the current size of the deficit is unsustainable: with the choice between either lower spending or higher taxes, it is not hard to see what his preferred choice will be. Justice will not be immune from this.

A Whole Lotta History
There is a third strategy which is demand reduction. In this strategy, the deal to be worked out between the Ministry and the Treasury would include adopting range of policy changes that would reduce the rising complex demand that was due to hit the justice system.

Of course, the strategy of demand reduction in the justice system has a whole lot of history itself. As the dust settled from the financial crash in the late 2000s, it was clearly going be a time of austerity for public services. At the time, optimistic prison reformers argued that we literally couldn’t afford the prison population we had. We needed prison demand reduction, they argued. Logically, the Treasury and Ministry should have argued with Number 10 that we needed fewer people in prison and fewer prisons, a sure fire way of reducing spending.

It did not happen. Which is strange. Looking at the issue solely in money terms, it seems odd that the prison population was allowed to rise at a time of austerity in public finances. At a Criminal Justice Alliance Conference in 2015, Sir Alan Beith, a Liberal Democrat and outgoing chair of the House of Commons Justice Select Committee, said: ‘We have known for years that we, as a country, have too many people in prison… With all the cuts we have had, where has the Treasury been in penal policy?’

The answer is, unfortunately, straightforward. The actions of those involved in the Spending Reviews of 2010 and 2015 knew the political risks they would be taking in proposing prison population reduction policies. It would mean letting people out earlier; it would mean reducing the sentence lengths for a range of offences. Penal policy has remained gripped in a political arms race for decades. Political parties have, almost invariably, when confronted with the sorts of decisions a Spending Review conjures up, sought to ‘get tougher ‘on crime, which, generally, has meant increasing sentencing and introducing new classes of crime, all of which have pushed the prison population up. Like any good arms race, politicians’ best responses (get tough) to their opponents’ likely strategies (get tougher) have all dictated a justice policy that has moved in one direction: more prison. Why? Because they rightly perceive that’s generally what voters want (or, at least, being painted as weak on public safety is electoral suicide).

At the same time, all of the principal actors knew the financial upside of prison population reduction policies was likely to be negligible. To be sure, the prison budget is two fifths of the Ministry of Justice’s budget, but it is only a fifth of the total Government spend on public safety. And when we step back from myopically looking at the criminal justice budget, we see how little we actually spend on prison compared to other public goods. When the Treasury engages in the Spending Review, arguing with every department in Whitehall about spending, the £3 billion we spend on prisons is tiny- about 0.0045% of all expenditure. We spend £222bn on social protection (mostly the state pension). We spend £140bn on the NHS, 46 times the amount spent on prison. In Treasury terms, the size of the prison reduction prize is relatively small and the Treasury has to pick its battles.

In this sense, prison population reform in 2010 and again in 2015 was simply not worth it – not worth the political fallout of adopting political unpopular policy choices and not worth the potential savings (even if they could be cashed). In 2010 and 2015, what we got was arguable a non-rational outcome at the macro-level— no measures to reduce demand, a plan for cheaper services and consequently worse outcomes— and yet each participant in the Spending Reviews was acting rationally with respect to his/her incentives. From a financial perspective, the macro-outcome may look irrational (prisons are expensive and almost everyone admits we send some people there who are just caught in tragic circumstances) but the decisions producing that outcome have been arrived at through people’s entirely rational decisions.

Red Cell: Patrick Maguire – from Proof, issue 4

One branch of mathematics, game theory, calls this a Nash equilibrium, after the famous American mathematician, John Nash. A Nash equilibrium is where each player is making the best decision that he or she can, taking into account the likely decision of the others. To stress this point a little further, this not only means that these are the best choices available, but also that, if no one else changes their strategy, no player can benefit by changing their own. As Dr David Craven, Birmingham Fellow and Royal Society Research Fellow in the School of Mathematics, observed about the Spending Review of 2015: ‘The game theory of a multiple-person, multiple-round negotiation is incredibly complex, with most successful strategies appearing to involve the people forming short-term and fluid coalitions as and when it becomes convenient… This is roughly how politicians appear to operate, and so from a mathematical point of view they largely behave rationally in their interactions. Although we might not think it at times, they might well be doing their best.’

Call the shots
Yet, just because demand reduction strategies have been mooted before does not necessarily mean it can’t work today in 2020. Indeed, the political factors at play in 2020 could be just the circumstances in which a fully thought through demand reduction strategy could be advanced. For the impact of austerity on justice agencies and the hammer blow of covid-19, when conjoined with a Government seeking to forge a new post-Brexit Britain that leaves decades of accepted thinking behind, a radical plan of demand reduction in justice matters may well have its time in the sun.

If the Home Office and the Ministry of Justice could work together and call the shots, it would mean not thinking about the rather narrow issue of prison population demand reduction, but demand reduction right across the criminal justice system. Our prison population is a consequence of the decisions we make well before someone is in front of a judge, facing years in custody. As Harvey Redgrave, former deputy director at the Prime Minister’s Strategy Unit, recently argued, the Spending Review is ‘a test of whether government truly understands how demand on the criminal justice system works… In order to succeed, the Spending Review must think about the criminal justice system as an integrated whole, rather than simply a collection of individual agencies.’

So what could this radical demand reduction strategy look like? Some of these changes could quite simply seek to remove existing demand from the criminal justice system all together. The most obvious policies are things like the legalisation of cannabis or to decriminalise drug possession. This type of choice would seek to take a large chunk of cases out of the criminal justice system completely, freeing up resources for other types of crime reduction (as well as diverting some spending into treatment budgets). The advantage of legalising a drug like cannabis, of course, would be to bring into taxation a whole new industry. Given that there are individuals at the top of Government who advocated for this prior to taking up their roles, it is a plausible choice for this Government to make.

Akin to these policies, another demand reduction policy could also seek to switch demand from the criminal system into a cheaper dispute resolution mechanism. For example, a range of low level criminal offences, such as TV licence evasion and simple motoring offences, could be switched from criminal justice processes into an online civil system of fines. This would seek to dispense with the costs of criminal law enforcement, legal representation and criminal court prosecution. It would mean the civil courts having to hear contested cases but would nonetheless seek to both switch and reduce demand by applying a less expensive process that the criminal justice system.

For those offences that remain criminal, there are a range of measures the Ministry could propose that would shift demand from more expensive parts of the justice system into cheaper ones. For example, the Ministry could ensure that the expense of court prosecution of low level crimes like shoplifting is all largely moved into summary out of court interventions. By amending the tests applied in bail/remand decisions, the Ministry could raise the bar that courts have to meet in order to place innocent people in prison on remand.

More radically, the Ministry could rethink how our courts are organised and shift more cases from the Crown Court into the magistrates’ court by expanding the sentencing remit of the lower courts to handle cases that attract longer periods of custody, and remove the right to jury trial for some of the less serious offences. This would recognise that most other common law countries that have jury trials restrict their use for much more serious crimes than happens in England and Wales. For example, in New Zealand, the District courts do not hear jury trials in cases that attract 24 months or less.

In addition, there are a range of radical solutions the Ministry could embrace on sentencing, including the rapid expansion of electronic monitoring to provide yet further opportunities to hold people under house arrest, rather than send them to short prison sentences. The adoption of treatment court models, widely used in other countries, could help with keeping mentally unwell and people locked in the vice of drug addiction out of prison and helping them turn their lives around.

Revolution in the head
The adoption of a more fully fledged demand reduction strategy, and one that was not solely focused on prison reduction, would take political leadership right at the top of Government. For, ultimately, Spending Review decisions are made by Number 10 (under this Government arguably more than ever). A radical demand reduction strategy would require Number 10 to have the courage to adopt bold positions, some of which would upset traditional, conservative voters and the tabloid press, while catching liberals off balance.

The mercurial nature of today’s Number 10 means predicting approach is difficult. As already mentioned, there are individuals at Number 10 who have adopted positions aligned with the idea of demand reduction, albeit when they were not in Government. It would be a bold Number 10 that, operating in a very different covid-infected political landscape than the one they were elected into in December 2019, felt that taking these risky political decisions was going to be worth it in the long run.

It may be too much to hope for. There has already been speculation that the Ministry is considering abolishing the sentencing discount for early pleas. It would require a reversing policies to extend the automatic release points for certain sexual and violent offenders. The rightness or wrongness of these measures is not, at least here, up for question – what is clear is that they will both increase demand in the system and would both be right out of the old tradition of penal populism.

Yet, if not now, when? It is clear crime has and is changing. Our criminal justice system, designed largely in the nineteenth and early twentieth century, is creaking and losing the public’s confidence. If this Government genuinely wants to govern as a one nation Government, bold criminal justice system reform is one way of making sure that all members of our society can reach their potential – giving people the support they need to stay out of trouble in the first place, and dedicating resources to rehabilitation for those who have committed crimes, so they can add value to society rather than detracting from it. Making changes to the system now will allow us all to break with the past and improve outcomes for our communities and our country. A bold set of decisions now, a passion to challenge the orthodoxy and create a system that fits with a broader, post-Brexit future for the country, requires radicalism at the Treasury and at Number 10.

In short, it would take a revolution in the head of Government.