The report, Reducing Re-offending by Ex-prisoners, suggests access to housing benefit for prisoners with existing tenancies to help cut re-offending rates, which cost the country around £11bn each year.
It said: "The homelessness directorate has identified financial support as an important element in preventing prisoners becoming rough sleepers on release."
Recommendations include ensuring benefit advice is arranged or housing is secured before release, and increasing the discharge grant given on release.
An SEU official said figures would not be discussed until the publication of the comprehensive spending review next week.
Home office minister Lord Falconer said his department would release a white paper on some of the issues shortly. The government's response is expected in the summer.
The going-straight contracts would initially be aimed at 18- to 20-year-olds. They could mean the difference between prisoners receiving tailored housing support both in and out of prison and the old system, which has no obligation to house ex-offenders.
Recommendations include ensuring benefit advice is arranged or housing is secured before release
Deputy prime minister John Prescott said: "We offer them the support they need to get over the problems that contribute to crime in the first place. This could include homelessness and mental health problems. In return, they have to take responsibility for their actions and work on their problems."
The report found a third of prisoners lose their homes due to imprisonment and a third about to leave prison have no fixed abode.
A pilot of the new Prison Link support scheme found badly housed ex-offenders were twice as likely to be reconvicted as those who receive housing support and 70% of their prison clients would be homeless on release.
Source
Housing Today
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