Although I work in a YOI that contains some of the nastiest scum it is possible to encounter, I am no expert on criminal law (i am not a prison officer btw) However, If Venables has a 'life licence' I think that any transgression of that can lead him back to serve the rest of a 'life' sentence.
I wonder if I might comment on conditions in a YOI (the one where I work anyway).In an article referenced by snowychap, the author claimed that prisons in Scotland were harsh (or something like that). Where I work there a 3 categories:- Basic, Standard and Enhanced. prisoners can progress to Enhanced based on their behaviour. An Enhanced prisoner has his own TV in his cell and can have Playstation if he can afford it; also his own curtains and bits like that. There are no computers, thus no internet and no Sky tv, as is sometimes suggested in the press.
Personally, I reckon that the regime is too easy and suggest that many of them would spend all day watching tv and playing on a playstation if the were on the out ! Whether the above is suitable punishment for murderers and rapists I will leave you to decide.