The report points out that a young person in the criminal justice system costs the taxpayer on average over £200,000 by the age of 16, while one given support to stay out costs less than £50,000. Yet only 7 per cent of Youth Justice Board funding is specifically dedicated to prevention.
The Committee says a more effective long-term prevention strategy must focus on early intervention with at-risk young children and their parents. Children exposed to the most acute combination of risk factors -which include family neglect, poverty, school under-achievement and a lack of positive role models - are between five and 20 times more likely to offend than those who are not.
The Government has made a good start in this area, particularly through the Sure Start initiative, but needs to go further, ensuring that support reaches the most vulnerable and is available throughout the childhood years, including at the point of transition from primary to secondary school.
However, being at-risk does not inevitably lead to offending and crime is committed by people from all walks of life. Therefore the Government must be careful not to place too much emphasis on predicting who will offend at the expense of reducing opportunities to commit crime.
The Committee suggests that more sophisticated crime data analysis can enable Government to spot and tackle emerging crime trends sooner, and says progress in this area has been too slow so far. Such information would better encourage and enable businesses to make offending harder or less appealing to criminals by "designing-out" crime, something which they may not see a benefit in doing otherwise.
Chair of the Committee Rt Hon Keith Vaz MP said:
"It may seem a bit of a truism now but the fact is that when it comes to preventing crime, all the value for money comes from investing in communities, in social programmes, in activities and mentoring for young people, in health, in technology - rather than spending on the criminal justice system.
"This Government has been tough on crime but not tough enough on the causes of crime. It is clear that prison, and especially short custodial sentences, do little or nothing to prevent offending or aid rehabilitation. And yet perhaps because of lack of investment, alternatives to custody are not yet working properly.
"Programmes such as Sure Start are particularly valuable and this type of programme should be extended to provide support further into the childhood years. We are also far from maximising the valuable possibilities offered by technologies that can "design out" crime.
"It took some pressure on the car industry but innovations that design out opportunities for crime have contributed to a 65 per cent reduction in vehicle theft since 1995.
"Obviously again - just investing in removing the opportunity for committing a crime is so much more effective, so much better value, than dealing with the financial and social costs of a crime once it has been committed."