“I think there is an increasing recognition that we have gone down the route of increasing sentences to an extent that it’s doing nothing to reduce crime but it is causing significant costs,” Gauke told the Times.

“This is not about being soft on crime, it is about more effectively reducing crime.”

The government has already released 5,500 prisoners early in an emergency plan to free up cells and stop the justice system collapsing, and has also announced a sentencing review aimed at providing more non-custodial sentences.

The policy is due to be reviewed in 18 months.

There are currently 85,877 people in prison across England and Wales, according to latest Ministry of Justice figures released on 23 December. The current operational capacity for prisons is 88,688.

The Ministry of Justice has promised to find a total of 14,000 cell spaces in jails by 2031.

Some 6,400 of these will be at newly built prisons, with £2.3 billion towards the cost over the next two years.

But earlier in December, Justice Secretary Shabana Mahmood told Radio 4’s Today Programme that just building more prisons will not solve the overcrowding crisis.

Asked whether the estate would be short of cells within three years, even with 14,000 extra places, Mahmood said: “We will run out because even all of that new supply, with the increase in prison population that we will see as a result of that new supply, doesn’t help you with the rise in demand, because demand is still rising faster than any supply could catch up with.”

Gauke has also said that building more prisons is not the answer and a more “strategic” approach is needed to free up space.

The sentencing review is expected to make its recommendations in the spring.

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