A modular factory where one in three staff are prisoners on day release

At 5am, Mike leaves his Category D open prison in Lincolnshire to get to the factory in Peterborough. He finishes work at 5.30pm and returns to prison at 7.30pm. His hours are long and “a bit degrading”. Broadly though, he says, “I’m quite happy here.”

A trained pastry chef, he was unable to put his skills to use in prison. “It’s soul-destroying,” he says. “I had no hope.” Then last year he started a national vocational qualification that allows him to work on construction sites. “This has given me some kind of hope,” Mike says.

‘Offering another step forward’

Employment schemes such as Prisoners Building Homes are “offering another step forward” for offenders, Mike says. He believes there are “too many people in jail today due to lack of work”, while he also says that “a lot of lads in the system are reluctant to start work when they get out of jail”.

A portion of Mike’s wage goes to the victim surcharge, which supports victims of crime to recover from trauma. “I thought I’d get all my wages, but they take 40% off.”

He has a jaded but surprisingly existential view of the world. “Either way, I’m an asset to someone,” he muses, meaning he is either working for a house builder or he is a cog in the criminal justice machine.

Britain has a skills crisis and a prison problem. Over the next five years, some 207,000 people will need to be brought into the construction industry to meet rising demand and workforce churn, according to the Construction Industry Training Board.

Meanwhile, Britain’s prisons are at maximum capacity. When the Labour government was elected in summer 2024, one of its first actions was to release a record number of prisoners before the end of their sentences to mitigate prison overcrowding.

Lord Timpson, minister for prisons, probation and reducing reoffending, has long advocated employing ex-offenders. He told the Financial Times in May that “a lot of people who leave prison have the potential to live a crime-free life, get a job, pay tax, have meaningful relationships and contribute”.

Zed Pods is one of seven employers signed up to Prisoners Building Homes. The scheme was set up in 2021 by five police and crime commissioners in South West England and is supported by One Public Estate, which is a partnership between the Office of Government Property, the Local Government Association and the Ministry of Housing, Communities and Local Government (MHCLG).

The programme is currently delivering 82 homes across 14 sites, with further pipeline sites under review.

Local authorities sign up to the process and different financing options are available to councils, including Homes England grant, MHCLG funds for homelessness accommodation and the Brownfield Land Release Fund.

Developers do not receive grant funding; they self-fund their prisoner employees. However, Debansu Das, business development director at Zed Pods, says the scheme helps to address “critical skills shortages” by “creating a pipeline of trained workers for our factory familiar with modular manufacturing processes”.

Zed Pods was introduced to the scheme through one of its council clients in 2023. Since then, it has been partnered with North Sea Camp Prison in Lincolnshire. A total of 31 prisoners have worked in the factory and completed the programme, of which 30 then got jobs. Most of these jobs are not in Peterborough, as the prison system means they are relocated to where their families are when they are released. However, seven participants were offered full-time positions at the Zed Pods factory and four are currently employed there.

Prisoners can be involved in several ways, such as constructing the modular units or their component parts, either in the prison workshop or at the modular factory while on day release. After their release, they can also work on development sites.

Participants apply for the programme and are interviewed by the employer. Those on day release have been vetted and assessed as low risk by the Ministry of Justice; most are in open prisons and approaching the end of their sentence. They are employed on National Living Wage for 12 months and provided with construction training by the developer.

The employer arranges minibuses and a participant drives the others to work (the driver gets paid a little extra). Participants’ wages are processed by the developer with tax and National Insurance. They are not paid directly, but the wages held in a trust by the Ministry of Justice, which deducts a victim surcharge of up to 40%. This trust can be used to support participants’ families and resettlement post-release, such as a deposit to access a private rented home.

“From a security point of view, there’s a set boundary in a factory,” Mr Das says. This makes risk assessment easier than if the participants were working on a development site.

Of the 31 participants in the past two years, just one Zed Pods worker has reoffended since leaving prison. This is much lower than the national reoffending average. According to the most recent government statistics, over a third of adults released from prison or starting a court order will reoffend within a year.

“Prisoner employment schemes are one of the most powerful ways we can build safer, more hopeful communities,” says Helen Thompson, deputy chief executive of Calico Group, a charity and housing organisation.

Ruth Cox, director of services at homelessness charity Justlife Foundation, agrees. “So many of the people we support leave prison on the back foot, lacking in confidence, feeling out of touch with training and employment systems, worried about how they will be received in the community, missing the structure of prison life (however negative) and unsure how best to fill their time, while adapting to living in unsafe and unsuitable accommodation,” she says.

Robbie Cowbury, deputy chief executive at charity Back on Track Manchester, says: “Material things like housing and money are really important to prevent reoffending, but our experience over nearly 50 years is that these need to be combined with developing a new identity and feeling a sense of belonging.

“People get this in many ways, and employment can be one of the best. The sooner they have access to that, the more likely identity and belonging are to take hold.”

When Inside Housing visits Zed Pods, the factory workers are on their lunch break, kicking a football around outside in the courtyard. “Their presence has uplifted the morale of the existing workforce,” Mr Das says of the prisoners.