Here comes the Hotstepper: Increasing financial inclusion and accessibility for offenders in the UK Criminal Justice System

Hotstepper is a Jamaican term for “someone on the run from the law”. It is used to highlight the irony of the predicament encountered by people who served or are serving their sentences.

Offenders and finance

Prisons and offenders are starting to be a part of the discussion around Environment Social and Governance (ESG). Ex-offenders make up a significant portion of the disadvantaged groups in the labour market. As a part of the equality and diversity commitments, organisations have been trying to be inclusive and recruit ex-offenders (Fletcher et al., 2001).

But what about offenders currently in custody?

Are banks and financial institutions providing sufficient support, inclusion, and access to those serving sentences in the UK criminal justice system?

Conviction, finances, and reoffending

Incarceration and loss of freedom may be the most severe consequences of offending in the United Kingdom.

From being convicted, going to prison, and serving a prison sentence to leaving prison and resettling into the community, the adverse effects of a criminal conviction on personal finance throughout the criminal justice process are apparent. A custodial sentence can upsurge financial exclusion and lessen personal accountability, causing issues with housing, insurance, job, and family relationships, thereby increasing the probability of reoffending.

In 2006, Data from the Offender Assessment System (OASys) suggested that offenders had a criminogenic need for financial management and income (Andre, Bonta & Wormith, 2006). Sheehan, McIvor, and Trotter (2007) investigated reoffending risk factors for women and reported that financial and debt assistance were two of the nine identified variables that impacted the risk of reoffending. Furthermore, more than half of short-term offenders, known for having a higher incidence of reoffending, stated that having enough money was a critical component in preventing reoffending (National Audit Office, 2010).

Even though Finance, Benefits, and Debt (FBD) needs were initially recognised as a key pathway in reducing reoffending strategy in 2004, the necessity of assisting people in prison with FBD concerns ahead of their release was emphasised again in 2018 HMPPS Through-the-Gate (TTG) as well as the Enhanced Through-the-Gate (ETTG) guidelines (Fahy & Enginsoy, 2020).

In addition to these changes, there is an opportunity for banks and other financial institutions to take an active part in alleviating the financial ramifications experienced during custodial sentences and better prepare offenders for resettlement after conviction. This piece will summarise problems encountered in custody and highlight opportunities to friction points.

Opening a bank account

It is nearly impossible to manage finances successfully in the twenty-first century without a bank account.

A Prison Trust Reform research revealed that one-third of those surveyed in prison indicated they did not have a bank account, and 31% had never had one. Of those interviewed in custody, 40 out of 47 had a bank account, but only three said they had direct access in custody. Four stated relying on their families to manage their bank account (Bath & Edgar, 2010).

In a recent evaluation, 14 out of 18 prisons reported supporting with opening bank accounts. However, this was only the case for those with proper identification. Offenders without appropriate identification could not open a bank account in 10 out of 18 prisons. Regardless of having a bank account, often offenders did not have a chance to manage their finances and relied on family and charity workers, who were dependent on location (Fahy & Enginsoy, 2020).

The current support for offenders without a bank account is more like a band-aid. A few charities try to offer solutions by acting as a bridge and linking in with a range of Credit Unions and High Street Banks to facilitate opening bank accounts. There was also an option to accompany ex-offenders to these banking appointments (Ingeus, 2021). These charity offerings are often location-dependent and available for a limited time. As helpful as this approach is for individuals released to the community, the limited scope of impact is evident for offenders in custody.

Debts

Previous research conducted in 2010 found that spending time in custody can influence the amount of debt an individual has (Bath & Edgar, 2010). Subsequent research conducted by the Prison Reform Trust (2018) found that many individuals who have been released from custody have accumulated debts while incarcerated. According to the report, these debts are frequently the result of a build-up of outstanding fines, rent, or mobile phone contracts. Furthermore, it has also been found that 48% of offenders have a history of poor money management and 41% of offenders in custody need FBD support (Impact Pathways, 2018).

Currently, FBD needs are addressed as a part of resettlement needs 12 weeks before release to the community. Suppose FBD needs are not identified at reception into custody. In that case, debt(s) can spiral out of control by the time resettlement support becomes available. As a result, it is critical to control and avoid debt at the point of entry into custody: benefits should be terminated/paused, current tenancies should be cancelled, and direct debits should be stopped (Fahy & Enginsoy, 2020).

Currently, there isn’t a national/unified pathway or procedure to prevent debt accumulation; it is within resettlement staff’s responsibility to contact the creditors and ask to freeze the debt, tackling a variety of differing policies.

Loans

The Prison Reform Trust (2010) also found that more than half of people in prisons have been rejected for a bank loan. Due to this, at least 8% of offenders have had to borrow money from a loan shark. Since loan sharks frequently operate as a driver towards further crime and accrued debt in prison, and loan rejection from a bank post-release can cause further complications and increase the chance of reoffending.

How can Capco help?

To play a part in reducing reoffending and augmenting the financial inclusion of (ex) offenders, Capco can partner with credit unions and banks that are providing support in prisons and enhance their offering. By conducting surveys and interviews, complemented by our Capco ID superpowers, we can create user journey maps, uncover further insights, and help design the optimal experience. Given the friction points reported above, Capco can play a part in increasing the financial accessibility and inclusivity of offenders. Here is how:

1. We can prevent debt accumulation by helping the credit industry create protocols for those going into prison.
2. We can reduce friction between prisons and banks by creating a portal that is easy to follow and speaks to both case/client management systems.
3. We can develop a secure process for opening bank accounts and managing offender accounts throughout their sentences.
4. We can provide extra support to current financial capability training courses, or create Capco’s own to better inform offenders, covering basic numeracy and budgeting, as well as modern financial services and products, with an extra benefit of good PR.
5. We can assist in creating an online debt counselling service for offenders to negotiate with representatives and creditors.
6. We can help develop loan and credit products for ex-offenders who do their best to integrate into the community.

References

Andrews, D. A., Bonta, J., & Wormith, J. S. (2006). The recent past and near future of risk and need assessment. Crime & delinquency, 52(1), 7–27.

Bath, C., & Edgar, K. (2010). Time is money: Financial responsibility after prison. London:Prison Reform Trust.

Fahy, K., & Enginsoy, A. (2020). A process evaluation of the enhanced through the gate specification, Final report. Ministry of Justice analytical series, London: Ministry of Justice.

Fletcher, D., Taylor, A., Hughes, S., & Breeze, J. (2001). Recruiting and employing offenders.

Impact Pathways (2018). ‘Why Focus on Finance, Benefit and Debt…?’ Impact Pathways.Org.

Ingeus (2021). Finance benefit and debt services evaluation. Company rehabilitation and evaluation series.

National Audit Office (2010). Ministry of Justice Financial Management Report, London: National Audit Office.

Prison Reform Trust (2018). ‘Prison: The Facts’, Bromley Briefings Summer 2018.

Sheehan, R., McIvor, G., & Trotter, C. (2007). What does work for women offenders?. What works with women offenders, 300–10.