Private companies and not-for-profit organisations who help offenders escape a life of crime will be rewarded with cash under new Government proposals.
Police minister Nick Herbert will unveil plans for a "rehabilitation revolution" to stop career criminals sliding back into the criminal justice system.
He will explain how a "pay by results" mechanism will create better support for ex-crooks by generating savings elsewhere.
Mr Herbert will outline his vision for criminal justice to an audience at the Policy Exchange, in central London. Attendees will hear how the system will be reformed to ensure offenders take "personal responsibility" for their actions.
Mr Herbert will explain how "actions have consequences" and more must be done to stop anti-social youths growing into criminal adults.
He will say: "We should be excited by the potential for unlocking the expertise of organisations, especially in the voluntary sector, which know how to work with offenders to get them back on the straight and narrow, whether through rigorous interventions to get them off drugs, mentoring, or preparing them for the world of work and responsibility.
"For too long we have done next to nothing to supervise or support offenders on short-term prison sentences who, on release, rapidly return to a life of crime.
"Now we have the opportunity, through rigorous payment by results mechanisms, to capture the savings to the criminal justice system by preventing re-offending, make effective rehabilitation services a reality, and cut crime."
The coalition has pledged to improve rehabilitation by paying independent providers to reduce re-offending, funded by the savings this will generate.
Earlier this month Justice Secretary Kenneth Clarke suggested millions could be saved from the £2.2 billion prisons budget by jailing fewer people.