Efforts made by prisons in England and Wales to cut re-offending are not working, according to an inspection report.
The damning report also claims the majority of prison staff do not understand what is required to meet the targets set under the Government proposals.
A study of 21 prisons by Liz Calderbank, chief inspector of probation, and Nick Hardwick, chief inspector of prisons, found little progress has been made in offender management and a fundamental review is needed.
It comes as the Government rolls out its Transforming Rehabilitation reforms, including plans for a nationwide "through the prison gate" resettlement service, which would see most offenders given continuous support by one provider from custody into the community.
In a joint statement, the chief inspectors said: "We have come to the reluctant conclusion that the offender management model, however laudable its aspirations, is not working in prisons.
"The majority of prison staff do not understand it and the community-based offender managers, who largely do, have neither the involvement in the process or the internal knowledge of the institutions to make it work.
"It is more complex than many prisoners need and more costly to run than most prisons can afford."
They said the pressures facing the Prison Service mean it would be unlikely to deliver future National Offender Management Service (NOMS) expectations.
"We therefore believe that the current position is no longer sustainable and should be subject to fundamental review."
Offender management involves the assessment, planning and implementation of work with offenders in the community or in custody to address the likelihood of them reoffending and the risk of harm they pose to the public.
Community-based offender managers and staff in prison Offender Management Units have joint responsibility for work with prisoners to address the attitudes, behaviour and lifestyle behind their offending.
The inspectors found organisational changes to offender management units failed to address a culture of poor communication or mistrust between prison departments.
It is the third report to be published from the joint Prisoner Offender Management Inspection programme and draws on findings from inspections undertaken between April 2012 and March 2013.
Juliet Lyon, director of the Prison Reform Trust, said: "When two highly respected independent chief inspectors of prisons and probation reveal evidence of failures in offender management across 21 prisons and seek a fundamental review, this must surely act as a wake-up call for government."
Justice minister Jeremy Wright said: "More than 600,000 offences were committed last year by prisoners who had broken the law before - despite a £4bn annual spend on prisons and probation.
"This is unacceptable and it's why we are introducing radical plans for change through our Transforming Rehabilitation reforms, which will see all offenders leaving prison receiving targeted through-the-gate support."
:: The following prisons were inspected for the programme: Buckley Hall, Bullingdon, Bullwood Hall, Canterbury, Channings Wood, Drake Hall, Forest Bank, Frankland, Full Sutton, Gloucester, Highpoint, Huntercombe, Leeds, Leyhill, Lewes, Lincoln, Lindholme, Northumberland, Onley, The Verne and Winchester.
:: Watch Sky News live on television, on Sky channel 501, Virgin Media channel 602, Freeview channel 82 and Freesat channel 202.
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