There are swingeing budget reductions ahead for the network of agencies that make up the criminal justice system (CJS). By 2014/15 the Ministry of Justice budget will drop by 23% in real terms and Crown Prosecution Service (CPS) funding will fall by 25%. The government’s grant to the police will fall by 20%.

The CJS will need to change radically to deal with cuts on that scale. Without significant reform, there will simply not be enough people or money in the system after 2015 to maintain the current workload.

Like the Police Service, the CJS needs a clear-sighted debate about what it can do in the new financial order, and where it might withdraw. In a report earlier this year, Her Majesty’s Inspectorate of Constabulary urged police forces to make cuts in a way that does not impact on frontline policing.

More recently, in our report Stop The Drift: A focus on 21st-century criminal justice, HMIC issued a similar clarion call to the wider CJS – seize the opportunity to strip away bureaucracy and waste, and reshape a system that costs less and serves justice even better.

I am aware that the CJS has never been short of two things – bureaucracy and reports on how to cut it. No previous report, though, has coincided with unprecedented cuts after an era of relentless and often fragmented growth. Rather than offering grand solutions, HMIC has ventured some straightforward reforms which have the potential to save hundreds of millions of pounds.

Those working in criminal justice need a strong steer on what they are expected to continue doing and where they can cut back.

HMIC does not have a clear understanding of the flow of cases into the system, and why some offences stay out of court. It knows there is a roughly 50-50 split in England and Wales between in-court and out-of-court disposals, but lacks a truly in-depth knowledge. It cannot fully explain why, according to 2008/09 figures, some forces deal with nearly 50% of offences outside court while others handle fewer than 30% in that way.

If you do not understand what is coming in, you cannot distribute resources effectively and you will struggle to persuade the public and victims that the system is getting it right in most cases.

HMIC highlighted the risk that the public, in areas with higher rates of out-of-court disposals, might feel they get ‘inferior’ justice – a sort of justice post-code lottery. We did not comment on whether in-court or out-of-court were ‘better’ or ‘worse’, but noted that the public’s understanding of out-of-court justice is limited. Out-of-court disposals are generally cheaper, but it is important the public do not see them only as a cost-cutting expedient. HMIC will do further work in this area.

Another key recommendation by HMIC is to encourage the guilty to plead guilty earlier, mostly by getting them into court quicker. Most defendants (67%) plead guilty but 41% do so late in the day, when large quantities of paperwork have been prepared and victims and witnesses have arrived in court. A conservative estimate of the cost of this redundant work is £150m.

In general, we need more streamlined prosecution cases, which are proportionate to the offence.

A truly joined-up IT system for the CJS – the ardent wish of many down the years – could save millions. The police and the CPS are working more closely, with potential savings from shared locations and back-up services. The Metropolitan Police Service and CPS London have shown promising success in pooling resources. We estimate agencies could save more than £70m through joint working.

I do not dismiss the concerns of defence lawyers about speed. But speedier should not mean rushed. It should not mean injustice for defendants if it is handled correctly – if the streamlined evidence is reliable and defendants are properly represented, including in ‘virtual court’ appearances from police cells.

It is in everyone��s interests to respond to the looming cuts with reform which sharpens the system.

Dru Sharpling is HM Inspector of Constabulary