Copy of a letter from WSC (Home Office) to Charles Hobhouse [Financial Secretary, Treasury]. WSC says that although he appreciates the need for economy in public service, he disagrees with Hobhouse's conclusions [see CHAR 12/4/32] on the cost of the prison services. He points out that the prison services often make unexpected savings; and that the estimates for 1910-11 and 1900-1 are misleading. WSC maintains that the true indication of a department's expenditure is through comparison of expenditure and details specific examples of policy changes which have contributed to a rise in expenditure. In the area of "gratuities", WSC says that the increase since 1900 has not been large and is due to increased numbers of discharged prisoners, and is not a great deal in relation to the state's legal powers in this area. WSC is glad that Hobhouse has been considerate towards these proposals, as the large numbers of persistent offenders demonstrates the inadequacies of the aid currently given to prisoners on discharge from prison. WSC concedes that he is prepared to discontinue the "gratuity" system. Unsigned typescript.