The flood of criminals entering prisons following the riots this summer has sparked the formation of new gangs in jails, according to Nick Hardwick, the new head of the prisons watchdog.

Launching his first annual report into jails in England and Wales, Mr Hardwick, the chief inspector of prisons, said on Wednesday that prison staff had been struggling to avert “potentially serious incidents” as gang activity grew steadily in the wake of the disturbances.

“In some places, young people in particular units have formed themselves into gangs or groups and some young people who have not been involved in gangs before have now joined gangs for protection,” he said.

Perpetrators of the violence and looting that swept through London and across English cities last month have increased the jail population by more than 1,000, according to the Ministry of Justice.

So far, 1,700 people have appeared in court over the disturbances and, of these, about three-quarters have a previous criminal record. About 25 per cent are thought to have an existing gang affiliation.

Mr Hardwick said that work over the past five years to improve the treatment of prisoners had been inconsistent. The resettlement of inmates had been too slow as a result of the financial squeeze on the voluntary organisations involved.

The inspector also found that there was too little focus on work, training or education – particularly for young adults – and that there was still an “unacceptably high availability” of drugs.

He criticised the “continuing high level” of untreated metal health problems in all forms of custody.

“For many short-term prisoners, the reality will be being locked up in a small shared cell with an unscreened toilet for 20 hours a day – with too much access to drugs and negative peer pressure and too little access to work and resettlement help,” said Mr Hardwick.

Sadiq Khan, Labour’s shadow justice secretary, said he was “deeply concerned” by the chief inspector of prisons’ findings.

“The public expect prisoners to be punished and reformed in prison – not recruited into gangs,” said Mr Khan. “Prison and probation officers have an important role to play in prisoners’ rehabilitation, but we are seeing thousands of frontline job losses in the prison and probation services.”

Separately, Nick Herbert, policing minister, announced on Wednesday that the government was exploring a new form of “neighbourhood justice” following the riots, which, he said, had demonstrated the potential “power” of community action.

Describing a system in which magistrates and volunteers could be given powers to resolve less-serious cries, Mr Herbert said the justice panels “could involve magistrates, returning them to a central role in their local communities, and volunteers working with the police”.

“This would not be an alternative to the formal criminal justice system, but a carefully guarded return of power and responsibility to communities to resolve less-serious crimes quickly and rigorously,” he told an audience of the Police Superintendents’ Association of England and Wales.

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