The chair of the government spending watchdog has criticised the use of short sentences for young offenders as being inefficient.

At a Public Accounts Committee evidence session last week, Margaret Hodge said that the Youth Justice Board could ‘save a lot of money and get better value’ if the number of short custodial sentences for young offenders were reduced. The National Audit Office estimates that each youth custody place costs around £50,000 a year.

Youth Justice Board chief executive John Drew admitted at the evidence session that the board could do more to offer alternatives to custodial sentences.

The committee was studying a December report on youth justice by the NAO. The report found that the volume of crime committed by young people fell by a quarter over the last decade, but that serious offenders remained just as likely to offend again as they did 10 years ago. The report also found that the number of young people held in custody fell by 14% over the preceding five years, and estimated that young offenders cost the economy up to £11bn in 2009.

Drew said: ‘I believe that there are children in custody at the moment for whom we could do better. The consequence of that would be to see the number of children in custody reduced.

‘We are not doing as well as we ought to do as a system to offer alternatives to custodial remand.’

Helen Edwards, Youth Justice Board director general of policy, said that judges would find it hard to retain credibility if they did not give custodial sentences to repeat young offenders.

Hodge said that, on the whole, youth justice is an area in which there have been ‘welcome changes in the right direction’.

The government has proposed that the Youth Justice Board be abolished as part of its cull of quangos.