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There will be an emphasis on making prisons in England and Wales more purposeful and toughening up community sentences.
The justice secretary announced that there will be extra help to deal with inmates' drug and alcohol addiction and greater emphasis on treating mental illness. Unpaid work schemes undertaken by offenders will be more punitive, with activities becoming more physical and intense.
The Justice Secretary, Ken Clarke, said: "We need to get on with rehabilitating prisoners. It will stop the remorseless rise, the huge increase in the number of people in prison.
"I think the prison system is not doing some of the things it's meant to do. That's stopping us preventing the rise of a criminal under-class who commit more crime when they are out."
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