Chris Kirk lives in a hostel in Cambridge from which taxis refuse to pick up. The address meant a bank turned down his application for an account. Even the local library would not give him a card.

He is staying there because he was released from prison shortly before Christmas. Chris has little choice. He was given just two weeks of benefits when he was let out and, after serving five years, he was only told of the parole board’s decision two days before his release.

Given circumstances like this, it is little wonder that 69 per cent of prisoners are still jobless several months after their release. Some 55 per cent re-offend and are convicted within two years.

But Mr Kirk, 27, looks unlikely to join them. He is one of the lucky few being helped by Business Enterprise, Advice and Training, a new charity that gives inmates the skills to run a business and then helps them establish one when they are released.

The charity aims to help all disadvantaged people, including the unemployed and homeless as well as ex-offenders. But Mike Allen, BEAT’s chief executive, fears former prisoners in particular face a bleak outlook now that employers can check whether potential workers have criminal records.

Sir David Romsbotham, the former chief inspector of prisons, is one of BEAT’s two patrons. He says that a key part of preparing prisoners for release back into the community is training for potential employment.

Getting back into work is particularly hard for former inmates waiting to return to positions of responsibility, as professionals or managers. Sometimes self-employment is the only option.

The crucial difference with BEAT, Sir David says, is the support it provides for prisoners both on the inside and after release. “There is nothing more important than trying to ensure that prisoners, who are citizens like everyone else, are employed when they are released, so that they have an opportunity to support law-abiding and responsible lives,” he says.

Each former offender gets a mentor who Mr Allen says is crucial when the going gets tough. As Mr Kirk explains, it is often the little things that can prove to be major obstacles. He wants to set up a Web design and software consultancy, but living in a hostel means there is no way to connect his laptop to the Internet. The unsatisfactory solution is using a computer at a Cambridge library and downloading software on to dozens of floppy disks. But a rented flat where he can both live and run his business will soon be the answer to this problem.

Allen says that BEAT acts as a “business nursery”, opening a joint bank account with the person being assisted, with the mentor jointly signing cheques and providing help with day-to-day operations.

The charity has start-up funding from Foursome, an investment company, and is beginning to attract donations. But it is still only able to reach a fraction of Britain’s 68,000 prisoners. The prison population has been increasing dramatically in recent years.

Mr Allen says the Prison Service is failing in its duty to rehabilitate. It costs taxpayers about pound;27,000 a year to keep a person in one of Britain’s 140 prisons.

If the charity could prevent 68 people, 0.1 per cent of prisoners, from re-offending, it would save up to pound;1.8m a year, depending how much time would have been served in jail. Also, those people would be economically active instead of claiming benefit.

Take away the cost of paying three business advisers pound;40,000 a year and taxpayers are still more than pound;900,000 better off even before savings on benefits, for example, are taken into account.

The attitude to education and training in many prisons does not make BEAT’s task any easier. Mr Kirk says that he was fortunate to be allowed access to a laptop, without which he would not have been able to complete an Open University maths and computing degree.

Some officers resent prisoners taking courses, he says, and there is little incentive for inmates to do them, as it pays just pound;7 a week, half of what they could earn in the prison laundry.

Mr Allen is critical of prison education in general, saying those who need anything more than basic skills are failed. Mr Kirk adds that there should be more computer training, as there is such a demand for people with skills in the IT field.

Since its inception late last year, BEAT has worked with 70 offenders from 13 prisons including Belmarsh, Wandsworth and Pentonville.

It evolved out of similar organisations that helped almost 160 ex-prisoners to start a business in areas as diverse as agriculture, retail and scuba diving. Only two went on to re-offend.

One inmate came up with an idea for a submersible speedboat. Assistance from BEAT let him develop the idea after release. He now has an order for 17 boats from a Caribbean tourist authority.

A former homeless man it helped now runs a firm making replacement window frames.

For information about becoming a mentor or making a donation to BEAT, call 020 7793 4294 or email beatenterprises@aol.com