Prison work is big business in the Northern Territory, but the Government's Public Accounts Committee is now putting the practice under the spotlight, amid concerns they unfairly compete with local businesses.

A number of Alice Springs business owners are worried about goods and services being produced behind prison walls.

Local businessman Steve Brouwer who sits on the Correctional Industries Advisory Panel said the prison can easily undercut businesses on labour costs.

"If they are producing goods and services behind prison walls they will have an advantage on their labour price," he said.

Mr Brouwer has commercial property interests in the town and understands the sensitive Alice Springs economy.

"If it takes one job out of the community, that's a problem for the community. We need to get as many jobs in Alice Springs as we can get," Mr Brouwer said.

Public Accounts Committee Chair Robyn Lambley has been overseeing the investigation into Northern Territory Correctional Industries (NTCI).

She wants prison businesses to be clear and transparent.

"Who is profiting from the correctional industries goods and services and how are people paying for the real costs of producing those goods and services out at the prison?" asked Mrs Lambley.

Mrs Lambley said the Government should not compete with private enterprise.

"I don't think anyone could compete with the prison," she said.

"I mean we have been told numerous times that the products that are made by NTCI are sold at a competitive price in the open market."

"But you're not paying all the overheads of employing people; you're not paying superannuation, you're not paying insurance, you're not paying payroll tax, you're not paying all those expenses associated with employing someone and that is a big saving," Mrs Lambley said.

Correctional Industries made $2 million profit last year

The NT Corrections Commissioner Mark Payne denies that the prison is trying to compete with local businesses.

"Our aim is not to, our aim is to provide no competition, no disadvantage and no exclusion," Commissioner Payne said.

"We look to correctional industries to earn $20 million a year, but we spend most of that $20 million a year, so virtually its about us breaking even as much as possible."

"I think total return in terms of any sort of profit margin was close to $2 million last year."

Commissioner Payne said the prison conducts regular reviews and holds public forums to encourage locals to voice their concerns.

"A competitive influence can be brought to our attention," Mr Payne said.

"We look at it and if we are providing any sort of competitive influence in the market, we stop doing that [work]".

While some are questioning whether Correctional Industries make a profit out of the goods and services they provide, Corrections argue they actually inject money into the local economy from buying locally sourced materials.

"Every year we spend on average about $6 million into the community to service our Correctional Industries."

Correctional Industries supplied merchandise to the Summernats car festival in Canberra last year. ( ABC News: Shuba Krishnan )

"So by example last year in Darwin we spent a little over $3 million buying goods and services for our industries and in Alice Springs just under $3 million and we're on track to do the same this year," Commissioner Payne said.

The Commissioner said that the goods and services produced by the prison only look to fill gaps in the local market.

"Where we can assist local industry, by providing an extension to their own operations, we would certainly do that," Mr Payne said.

"That's why we would ask local industry to come to us and talk to us about how we can help them."

The prison training and employment programs have had success at rehabilitating prisoners and providing them with real job opportunities once they leave the prison.

"Last year we had 33 that went into full time employment once they left, but at any given time in the NT there are 75 prisoners on average who are engaged in Sentence to a Job opportunities," Mr Payne said.

The Sentenced to a Job program has also been controversial for other reasons.

Escape controversy

Last year convicted killer and rapist Edward James Horrell escaped from the Datjala work camp in eastern Arnhem Land where he was completing his Sentenced to a Job responsibilities.

Edward James Horrell. ( Supplied: NT Police )

Horrell was at large for four days before he was recaptured.

This came despite earlier assurances from NT Attorney-General John Elferink that work camps would not house sex offenders.

In October last year a prisoner in Alice Springs jailed for unlicensed driving walked away from a work party at Ross Park Oval in Alice Springs.

Despite the controversy the Government has said it intends to persist with the policy.

The next PAC hearing is in April and the committee will look at handing down its recommendations shortly after that.

Correctional Services also plans to have an independent review of the industry conducted.