Deborah Orr: The criminal justice system is in a mess. And Labour's panic over it isn't helping

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David Cameron is just scaring me now. Did he really do the impossible? Did he really manage, in just a couple of sentences, to make the national identity card scheme sound like a bargain? Cameron argues that if the £5.75bn scheme were to be binned, then his party could spend all the money on halting the recently introduced practice of letting non-violent prisoners end their sentences 18 days early. If he had set out graphically to illustrate just how incredibly expensive it is to keep people in jail, I can't think of a way in which he might have done better.

I don't really blame him, though, for his lack of sophistication. Labour has had a decade in which to transform the tenor of the public debate on criminal justice. Instead, it has continued to foster political populism, in actions and in words, while seeking behind the scene to revolutionise criminal justice quickly and on the cheap.

Right now, over at the Ministry of Justice, it is becoming apparent that this approach has simply wasted time and money. Four years of frenetic policy-making and scattergun attempts at reform, in the form of the National Offender Management Service (Noms), now lie in tatters. Leaks now suggest that the whole system, which has so far cost £2.6bn, and had got to the stage where it was proposing for itself the introduction of a 1,300-strong headquarters, is about to be scrapped. Noms has been a typically New Labour folly. The whole thing is just tragic.

Labour has been in a panic about criminal justice for a number of years now, and the Noms debacle is a monument to that panic. Initially, the party was hugely over-optimistic about what could be achieved by making progressive interventions. Having given early emphasis to the importance of rehabilitation, and having invested public money in bolstering in-prison programmes and probation services, there was disappointment among Blairites when this investment failed to have an immediate impact on re-offending rates.

Crucially, at the same time, Labour was unable to make any impact on the recent trend for custodial sentencing for trivial cases – or on persuading the public and the courts that this was a problem. More and more people were finding their way into the criminal justice system, and very few, once they were in, were avoiding recidivism. The "tough on crime, tough on the causes of crime" idea was that people would be processed into prison, where they would be transformed into citizens. Prison would really work. It would be good for people.

The reality was that even with increased budgets and retrained staff, the rise in numbers, and the necessity of having prisoners constantly on the move so that room could be made for new admissions, militated against the prospect of rehabilitation anyway. In truth, too much was simply expected too quickly. But instead of allowing reforms and changes of attitude to bed down and penetrate deeper, the Government sought out other strategies that might deliver the quick results it craved.

When Patrick Carter, a healthcare entrepreneur, submitted an independent report to the Government in 2003, suggesting that an amalgamation of the prison and probation services would fix everything, it was seized upon with astounding alacrity. There was little consultation prior to the publication of the report. Nor was the post-publication consultation period even as long as the recommended 12 weeks.

Carter recommended the establishment of the structure of the service within one year, with an emphasis on achieving efficiency savings and with it a stabilising of sentencing practice. Within two years, he suggested, Noms should be up and running, not only orchestrating the management of each and every one of the 200,000 offenders on the probation service's books on any given day, but also introducing "contestability", whereby it would contract out services to the public, private, voluntary and community sectors.

Within five years, he envisaged, "contestability" would have been introduced throughout the entire prison and probation service, with every offender accessed being commissioned by Noms. Sentencing guidelines would be "informed by government priorities to manage the demand for prison and probation".

Three years in, and none of the ambitions of Noms has been achieved. There was an initial attempt to force through a restructuring, with England and Wales broken up into 10 offender management regions. But in the end it was decided that the 42 probation areas would simply answer to them, along with the 141 prisons. All it did was introduce two new layers of bureaucracy to a couple of services which have already suffered from the loss of that local accountability that politicians of all stripes are supposed to love so much.

It should have been plain then that "efficiency savings" simply were not going to happen. On the contrary. Since then, the portents of failure have been coming thick and fast. Noms lost a really good chief executive in Martin Narey, who resigned some while back after clashes with Charles Clarke, and went off to the third sector himself as head of Barnardos.

More recently, Noms was severely criticised by Andrew Bridges, the chief inspector of probation, who said it was having a detrimental effect on the ability of probation officers to do their work.

This summer, Noms was forced to freeze funding for the development of the computer system it needed in order to track all those offenders, and now risks a £50m penalty if it cancels. Finally, far from giving the Government more say over sentencing guidelines, it has inadvertently given the courts more say over government budgets. It has, by combining prison and probation funds, simply created a simple equation whereby the more people there are in jail, the less money there is for probation.

The organisation's inability to provide rehabilitative programmes was exposed in court by two men given the recently introduced indeterminate sentences that have proved so popular in the courts, yet unable in their particular prisons to access the treatment programmes they needed to complete in order to apply for parole. The difficulty prisoners have in accessing treatment programmes, even when they are told that they need them, was the very thing that started getting ministers agitated about the prison and probation services in the first place. Noms, it is clear, has had very little impact on the initial problem at all, while at the same time it has created many more.

What sort of an opposition, you have to ask, watches all this unfold, and says virtually nothing? Why has Cameron alighted on one tiny and inconsequential detail when two entire services are in chaos? Mainly because he knows as well as Labour that the latter's early instincts and early policies were correct, but that, given the choice, he would have done the same as Labour anyway. Both parties stick with political populism because it is cheap. In every possible way.