Sentencing change leads to £10m jail backlog

· Court told prisoners stuck in system for two years
· Inmate claims process breaches human rights

Ministers seriously underestimated the huge numbers of inmates who would clog up prisons under the new indeterminate sentences for public protection (IPPs) and will not be able to process them through the system for at least another two years, officials admitted yesterday.

In a statement to the high court in London yesterday, Anthony Robson, the deputy head of the public protection unit at the National Offender Management Service, also said that no new funds were made available to deal with IPP prisoners because it was wrongly assumed that resources would be released by a reduction in some other types of prisoners. Fixing the problem will now cost the government well over £10m.

The disclosure came during a case brought against the justice secretary, Lord Falconer, by a prisoner who claims the system is arbitrarily detaining people in breach of the European convention on human rights.

Overcrowding has meant that many IPP prisoners have not been able to access the programmes they need to persuade the parole board they no longer represent a danger. Because the "lifer" prisons that offer the courses are overflowing, many IPP prisoners are being held indefinitely in local prisons where they cannot get on the programmes.

The total number of prisoners with indeterminate sentences - IPPs and life sentences - was just under 9,500 yesterday, against only 5,475 before IPPs were introduced.

With prison numbers at an all-time high, 150 IPP prisoners a month are being sentenced but no extra funds have been made available to ease the overcrowding crisis, Lords Justices Laws and Mitting were told.

Tim Owen QC, for IPP prisoner David Walker, accused Lord Falconer of "irrationality" for having a policy that allowed prisoners to be released on the expiry of their tariff or minimum term if they no longer posed a risk but failing to provide the resources for them to prove it.

Mr Owen said Walker, who was convicted of a sexual assault when he was drunk and given a tariff of 18 months, had "not even got off the starting blocks" towards release. Although his tariff would expire next November, he was still in his local prison, Doncaster, where no offending behaviour courses were available.

To qualify for a course he had to move to a first-stage "lifer prison", where he would be assessed and then take the course - a process that would take about a year. Without successfully completing the course he would fail in his application to the parole board, said Mr Owen. He asked the judges to rule that keeping prisoners "warehoused" beyond their tariff amounted to arbitrary detention in breach of human rights. Officials admitted no new resources had been made available to deal with the prisoners whose cases would have to go to the parole board under the Criminal Justice Act 2003. This introduced the IPP, which obliged judges to pass what was in effect a life sentence on anyone convicted of a wide range of sexual or violent offences - some comparatively minor - if there was a risk they might do it again and someone might be subjected to significant harm. Half of IPP prisoners have received tariffs of less than 30 months.

Under the previous law they would have received a fixed sentence and been released halfway through the sentence without having to go to the parole board.

In Mr Robson's statement - which the judges ruled could be disclosed to the Guardian - he estimated that the prison service could at present satisfactorily deal with only 6,500 IPP prisoners. The government has set up an urgent review which is due to report in August, said Mr Robson.

"I estimate that it will take six months after the review reports before any practical measures can be implemented. Thereafter, I estimate that it will be a further 18 months (total period, two years) before a system which manages IPP prisoners effectively can be fully operative."

Robert Jay QC, for Lord Falconer, said: "The prison service is a spending department. There is only one department which hands out money. It's HM Treasury. That's the problem." He urged the judges to follow their traditional course of "judicial diffidence" in telling ministers how to spend their resources. "It is a very troubling case but that is the answer."

The judges reserved judgment.