Justice Secretary Shabana Mahmood (pictured) said extending technology such as electronic tags would see the creation of a ‘prison outside prison’ for non-dangerous offenders

Thousands of criminals a year are currently released from jail on ‘home detention curfew’ which requires them to wear an electronic tag and observe a curfew. (Stock image)

This type of ‘house arrest’ cannot currently be imposed as an initial sentence by a court – but the review may recommend introducing it as a substitute for jail.

Ms Mahmood said: ‘We have an opportunity now to reshape and redesign what punishment outside of a prison looks like.

‘Theoretically a judge could hand down a sentence of house arrest.

‘I’m interested in what punishment outside of ag prison looks like.

‘It still has to be punishment, they still have to have their liberty curtailed, people have to know and believe there are consequences to breaking our laws.’

The review is also likely to recommend an end to short prison sentences.

When he was justice secretary in 2019 Mr Gauke said short jail terms did not prevent reoffending and called for them to be scrapped in favour of tougher community sentences.

Labour remains committed to building 14,000 extra prison spaces, bringing capacity up to 105,000 in England and Wales.

Ms Mahmood is also understood to have been impressed by a scheme in Texas which gives well-behaved prisoners time off their jail sentence

Ms Mahmood said: ‘This review, along with our prison building programme, will ensure we never again have more prisoners than prison spaces.

‘I believe in punishment. I believe in prison, but I also believe that we must increase the range of punishments we use.’

The review will look at introducing ‘minimum sentences’ for serious crimes but it remains unclear how they could work.

Ms Mahmood is also understood to have been impressed by a scheme in Texas which gives well-behaved prisoners time off their jail sentence.

She plans to travel to the U.S. in the New Year to study the programme at first hand.

The new review will scrutinise ‘the point at which offenders are released from prison’, opening the way for some inmates to be freed earlier.

It will also look at how long they are supervised by probation officers in the community.

Offenders could be given electronic devices – such as smart watches – which vibrate to remind them to check in with probation teams or addiction specialists, it is understood.

The review will seek to come up with new ways to deal with prolific offenders and specific sentencing options for women, older offenders and young adults.

The way sex offenders are punished will be scrutinised by the review – potentially leading to changes – but the punishment for murder will not be within its scope.

Earlier this year prisons minister Lord Timpson said only a third of prisoners should ‘definitely’ be behind bars.

Another third ‘primarily require mental health support’ while for the remainder prison was ‘an absolute disaster for them’, he said.

There are currently 87,000 prisoners in England and Wales, roughly double the number 30 years ago when then Tory home secretary Michael Howard delivered his famous ‘prison works’ speech.

The average annual cost of a jail space is £52,000 a year, while a community punishment costs about £5,000 a year.

The review is set to be complete by the spring. Subsequent reforms will not be in place until March 2026 ‘at the earliest’.

Mark Day of the Prison Reform Trust said: the review was a ‘vital opportunity to reset the dial on decades of failure in penal policymaking’.