How entrepreneurship can break the cycle of reoffending

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Identifying how to successfully prevent re-offending is a major challenge. In a recent report, the Centre for Entrepreneurs investigated the potential of supporting entrepreneurship to reduce reoffending. 


The prison system in England and Wales performs poorly in terms of reducing reoffending, with 45% of all released prisoners reoffending within a year. In a bid to explore alternatives in how the system can be improved, the Centre for Entrepreneurs investigated the potential of supporting entrepreneurship to reduce reoffending.

Below is the Executive Summary of this report. You can read the full report here.


The problem

  • The bulging prison population and 46% reoffending rate among ex-prisoners (at the cost of £4.5 billion annually) are a drain on constrained public finances and a waste of human talent.
  • An emphasis on security over rehabilitation and reductions to the prison budget since 2010 have made it harder to engage prisoners in productive activity.
  • While employment is one of the most important factors in reducing reoffending, ex-prisoners struggle to find jobs because of employer reluctance to hire those with criminal records. Two years after release, only a third manage to find formal work.


Entrepreneurship as the solution

  • Unlike traditional employment, entrepreneurship does not discriminate against those with criminal records – there is no application process for becoming an entrepreneur.
  • There are good reasons to believe that many ex-prisoners would make successful entrepreneurs. Studies show that prisoners and entrepreneurs score similarly on need for selfachievement, aspiration for personal innovation, desire to plan for the future and desire for independence.
  • Testimony from criminal justice practitioners and surveys conducted by the Centre for Entrepreneurs demonstrate a high level of interest among the prison population in starting a business. 59% of prisoners would like to take an entrepreneurship course in prison, while 79% of prisoners are interested in starting a business – compared to around 40% of the UK population.
  • In the full report, we use a broad definition of entrepreneurship, covering the entire spectrum from self-employed sole traders to high growth innovative businesses. When it comes to breaking the cycle of reoffending by encouraging ex-prisoners to become entrepreneurs, what matters most is gaining the self-sufficiency needed to resist a return to crime.
  • Because they understand the difficulties of finding work with a criminal record, ex-prisoner entrepreneurs are more likely to hire and mentor people with criminal records, as our case studies illustrate.


The prison entrepreneurship programme

  • Turning motivated prisoners into entrepreneurs requires support both in prison and post-release. We believe the best way of doing this is through externally delivered “prison entrepreneurship programmes” that provide tailored training, mentoring and grant funding for aspiring prisoner entrepreneurs.
  • Existing prison entrepreneurship programmes across the world have been highly successful at reducing reoffending, achieving recidivism rates of between 5% and 15%. Several are profiled in our case studies.
  • The economic case for prison entrepreneurship programmes is strong. Using a successful UK initiative as our model, our preliminary calculations suggest savings to the government and wider society worth up to £1.4 billion annually on the cost of ex-prisoner reoffending, at a maximum cost of £82 million – a 17x return on investment.


Key recommendations

  • Recognition: Self-employment should be recognised as an effective pathway towards rehabilitation and reduced reoffending for many ex-prisoners. This recognition should be reflected in the resource allocation, priorities and official statistics and performance measures of the prison and probation systems.
  • Public prison entrepreneurship fund: The government should create a ring-fenced fund for prison entrepreneurship programmes, with the aim of making them available to all of the 75,000 people leaving prison every year. Philanthropy has a role to play, but ultimately, stable, ongoing public funding for programmes is required.
  • CDFI loan fund: Post-release, there should be tailored access to loans for a small subset of ex-offender businesses with genuine growth potential. In order to pool resources and share best practices on lending to this demographic, we recommend that several community development financial institutions (CDFIs) join together with relevant partners (probation services, credit unions, Start Up Loans Company and charities/ businesses) to create a ring-fenced loan fund for ex-offender businesses.
  • Mentoring: We propose the creation of a mentoring scheme connecting prisoners and ex-offenders with successful entrepreneurs and business professionals. In our survey of entrepreneurs, almost 90% expressed interest in mentoring an ex-offender entrepreneur, while over 80% said they would consider speaking at a prison. The scheme would connect potential mentors with the charities, prisons and probation services training prisoners and ex-offenders in starting a business. The platform would be similar in structure to “Founders 4 Schools” - a platform that connects schools with leading professionals. 


Source: The Centre for Entrepreneurs 

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