The use of community service has been criticised after criminals were filmed drinking tea and smoking illegal drugs.
The government's victims' commissioner said it was a "holiday camp for offenders" which had to be changed.
The undercover footage from three areas in England followed an investigation by ITV1's Tonight programme.
It comes as Justice Secretary Kenneth Clarke considers plans to give more offenders community punishments rather than short prison sentences.
The victims' commissioner, Louise Casey, who helped develop the Community Payback scheme, said the current set-up was "disgraceful" and called for a revolution in the way it was implemented. Read more