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Chris Grayling: "I want to capture the skills that exist across the public, private and voluntary sectors."
An overhaul of the probation service in England and Wales will see low-risk offenders supervised by the private sector, the government is to announce.
Justice Secretary Chris Grayling will unveil plans to let security firms and voluntary groups manage probation on a "payment by results" basis.
Prisoners serving short sentences will also have to undertake compulsory rehabilitation for the first time.
Trade unionists fear that the move could "compromise public protection".
Most released prisoners and people serving community sentences are managed by the public sector probation service - provided by 35 trusts across England and Wales.
But under the Ministry of Justice's (MoJ) proposals, responsibility for monitoring some 200,000 medium- and low-risk offenders will transfer to the private sector.
Private companies and charitable bodies successfully bidding for contracts will be paid according to their results in cutting re-offending.
However, the public probation service will continue to supervise some 50,000 high-risk offenders, including all serious violent and sexual offenders.
An MoJ spokesman said £1bn was spent each year on running community sentences, and that £800m of that was spent on probation.
According to MoJ figures, 47.5% of all offenders released from custody in 2010 re-offended within 12 months, and 57.6% of those sentenced to under 12 months released in the same period went onto re-offend within 12 months.
Matt, a repeat offender, is about to be released from HMP Peterborough. He is being mentored by One Service, a new six-year pilot programme aimed at reducing re-offending by short sentence inmates at that jail.
"They've actually helped me find accommodation for when I leave instead of me going to look for it myself, which has given me a bit more confidence and that's one step which means I've got more time to think about my next plan.
"They're going to help me get into either work, volunteer work, or further education, helping me find a CV, help me write it up properly.
"They helped me get my identification, a bank account. With the One Service they give you motivation and they help you to proceed in your plan, what you want to do. They don't force anything upon you.
"Probation kind of say 'right it's either this or prison'.
"Companies would only get paid in full if their efforts at bringing down reoffending rates were successful. But we are not putting a figure on any target spend on this scheme."
The spokesman added that there will not be any cuts made to the rehabilitation of high-risk offenders.
In an attempt to curb re-offending, Mr Grayling has also indicated that all those serving short custodial sentences will undergo rehabilitation following their release.
Prisoners serving under 12 months only currently undergo voluntary rehabilitation and are otherwise freed without support or supervision.
The MoJ says those serving more than 12 months have statutory supervision on release - this can involve regular meetings with an offender manager, curfews and a requirement to attend drug or alcohol rehabilitation courses.
A scheme is also being introduced where similar offenders are being met at the prison gates by a mentor offering support in finding accommodation, returning to work and coping with drugs or alcohol.
The new proposals would see all freed prisoners subject to both the mentoring scheme and also statutory supervision.
According to the MoJ, the government would look to security firms and voluntary groups to "innovate" in their efforts to bring down reoffending rates.
"We wouldn't tell them what to do, we would look to them to find the best way to reduce reoffending," a spokesman said.
Mr Grayling also said that offenders are currently released from prison "with £46 in their pocket, and no support at all".
"No wonder we have such high levels of re-offending. It is madness to carry on with the same old system and hope for a different result."
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Khan: "Recipe for disaster if things go wrong."
The government will offer £500,000 to voluntary and community sector groups to help them as they prepare to bid for probation contracts.
Shadow justice secretary Sadiq Khan said: "Payment by results in criminal justice is untested, and the Tory-led government are taking a reckless gamble with public safety."
Harry Fletcher of probation officers' union Napo said the "astonishing" overhaul was being "rushed through without proper thought to the consequences".
Juliet Lyon, director of the Prison Reform Trust, said: "Why not build on the success of joint work by probation, police and voluntary organisations, rather than break up the probation service and put the public at risk?"
Liz Calderbank, chief inspector of probation for England and Wales, queried how, for example, a positive result for someone on probation could be measured.
"If you have someone who's convicted of a serious knife crime and then they re-offend by stealing a jar of coffee, is that a failure or a success?" she said.
In 2011, a record number of offenders sentenced for serious crimes were found to have committed previous offences, according to government figures.
Some 90% of those sentenced in England and Wales had offended before - and almost a third had committed or were linked to 15 or more crimes.
Final reforms for the probation service are expected to be set out later this year and implemented across England and Wales by spring 2015.
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