Leadership and knowledge can fundamentally transform the justice system, a report released by the Office of the Prime Minister's Chief Science Advisor says.

Using evidence to build a better justice system: The challenge of rising prison costs was authored by Science Advisor to the Justice sector Professor Ian Lambie, with assistance from Chief Science Advisor Sir Peter Gluckman and other social sector science advisors.

It says prison costs in New Zealand have risen over the past 30 years and particularly in the last 12 years at a rate that far exceeds any other component of government expenditure. This is not due to an increasing crime rate, but because of successive policies that have been implemented so as to be seen to be "tough on crime".

The report says evidence suggests that potential victims are not being made safer by responding in a blunt and overly punitive manner. It says that to reduce crime, a better justice system requires evidence-based, cost-effective approaches to prevention, intervention, and rehabilitation - not just imprisonment.

It says the strong evidence base related to what fuels the prison "pipeline" suggests that prisons are extremely expensive training grounds for further offending, building offenders' criminal careers by teaching them criminal skills, damaging their employment, accommodation and family prospects, and compounding mental health and substance use issues.

Other countries such as Finland have significantly reduced their incarceration rates without crime rates rising. The report says there is strong scientific evidence for putting resources into crime prevention, early intervention, and a smarter approach to rehabilitation and subsequent social inclusion for those already in the criminal justice system - not for building more prisons.

"To assist in such an approach, there must be adequate investment in piloting and evaluating early intervention and prevention initiatives. With leadership and knowledge, we can fundamentally transform the justice system, reduce victimisation and recidivism and make prisons only a part of a much more proactive and effective systemic response to a complex problem," it says.