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The prison service is starting to recategorise the security risk of offenders to ease capacity pressures, Sky News understands.

It involves lowering or reconsidering the threshold of certain offenders to move them from the closed prison estate (category A to C) to the open estate (category D) because there are more free cell spaces there.

Examples of this could include discounting adjudications – formal hearings when a prisoner is accused of breaking the rules – for certain offenders, so they don’t act as official reasons not to transport them to a lower-security jail.

Prisoners are also categorised according to an Incentives and Earned Privileges (IEP) status. There are different levels – basic, standard and enhanced – based on how they keep to the rules or display a commitment to rehabilitation.

Usually ‘enhanced’ prisoners take part in meaningful activity – employment and training – making them eligible among other factors, to be transferred to the open estate.

Insiders suggest this system in England and Wales is being rejigged so that greater numbers of ‘standard’ prisoners can transfer, whereas before it would more typically be those with ‘enhanced’ status.

Open prisons have minimal security and allow eligible prisoners to spend time on day release away from the prison on license conditions to carry out work or education.

The aim is to help reintegrate them back into society once they leave. As offenders near the end of their sentence, they are housed in open prisons.

Many of those released as part of the early release scheme in October after serving 40% of their sentence were freed from open prisons.

They were the second tranche of offenders freed as part of this scheme, and had been sentenced to five years or more.

Despite early release measures, prisons are still battling a chronic overcrowding crisis. The male estate is almost full, operating at around 97% capacity.

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Sky News understands there continue to be particular pinch points across the country.

Southwest England struggled over the weekend with three space-related ‘lockouts’ – which means prisoners are held in police suites or transferred to other jails because there is no space.

One inmate is believed to have been transported from Exeter to Cardiff.

A Ministry of Justice spokesperson said: “The new government inherited a prison system on the point of collapse. We took the necessary action to stop our prisons from overflowing and to protect the public.

“This is not a new scheme. Only less-serious offenders who meet a strict criteria are eligible, and the Prison Service can exclude anyone who can’t be managed safely in a category D prison.”

A prisoner who has served 12 years in jail for stealing a mobile phone was unable to attend a psychiatric assessment because of a lack of staff, his family claims.

According to psychiatrists, Thomas White has developed psychosis as a direct result of being handed a controversial indefinite jail term called imprisonment for public protection (IPP), which was abolished in 2012.

His sister has been campaigning for over a year to have him transferred to a hospital, which would require him to receive sign-off from two separate psychiatrists.

Ms White said her brother, who experiences religious hallucinations, was placed in segregation and needed three prison staff to release him from his cell – but they were not available due to staff shortages.

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Sky News understands that Lord Blunkett, the former Labour home secretary who introduced the IPP sentence but now campaigns for reform, has asked prisons minister Lord Timpson to investigate.

What are IPP sentences?

Thomas White, now aged 40, was one of more than 8,000 offenders who were given an IPP sentence – a type of open-ended prison sentence the courts could impose from 2005 until they were scrapped.

The sentence – which has been described as a form of “psychological torture” by human rights experts – was intended for serious violent and sexual offenders who posed a significant risk of serious harm to the public but whose crimes did not warrant a life term.

Although the government’s stated aim was public protection, concerns quickly grew that IPP sentences were being applied too broadly and catching more minor offenders, partly due to the fact that previous convictions were taken into account when determining whether someone posed a “significant risk”.

Thomas was sentenced to two years for stealing the mobile phone in a non-violent exchange back in 2012 – but because he had 16 previous convictions for theft and robberies, he was given an IPP sentence and has served 12 years.

The coalition government scrapped the sentence in 2012, but the change was not applied retrospectively, meaning 2,852 prisoners remain behind bars – including 1,227 who have never been released.

The new government is under increasing pressure to act on the IPP crisis given they were introduced by Lord Blunkett – who has since said he feels “deep regret” about the way the sentence was used.

‘My brother is being seriously failed’

In an email to Lord Blunkett, seen by Sky News, Ms White said: “My brother had a psychiatric appointment on the 1 November to see if he could be admitted to an outside hospital as he has to have two signatures to be transferred to an outside hospital.

“The system is nothing but criminal – people like my brother are being seriously failed.

“We waited a long time to have Thomas assessed again by the psychiatrist. We more than likely won’t get the assessment again.”

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James Frith, the Labour MP for Bury North, said: “Thomas’ case highlights why these sentences were abolished over a decade ago.

“Thomas’s indefinite imprisonment has had a hugely detrimental impact on his mental and physical wellbeing. Thomas should be a patient, not a prisoner.

“We know the prison system is underfunded and overcapacity, but this is no excuse for failing Thomas. I have been working with Clara, Thomas’ sister, and I have written to the Lord Chancellor to raise Thomas’s case and the wider issues of IPPs.

“Thomas has been denied appropriate assessment and care for too long, we will not give up this fight for what is right.”

The Ministry of Justice does not comment on individual medical cases.

It is understood Lord Timpson will respond to Lord Blunkett in due course.