The Conservatives may employ voluntary organisations to work with young offenders and reward charities for cutting reoffending on a payment by results basis.
Nick Herbert, shadow justice minister, told delegates at a Conservative Party conference fringe event yesterday that the move was being considered as part of a current youth justice review.
Under the plans, voluntary sector providers would be responsible for ensuring that young offenders did not reoffend within two years.
Many custodial sentences too short
Hebert said that many custodial sentences were too short to have an impact and criticised the effectiveness of many community orders.
He said that payment by results would mean somebody was accountable for those children and young people who offended.
"This is about transferring money that is already spent but on social failure and investing it in other interventions," said Herbert.
Payment by results 'difficult'
Chief executive of Barnardo's Martin Narey said he believed the charity could successfully work with children who had offended but admitted payment by results would be "difficult".
He added that community sentences were often breached because young people were left to complete them without help from parents and that many short custodial setences were futile.
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