The report is not talking about sexual predators, or any contact offences.
The reality is that offences relating to viewing indecent images take a very long time to investigate. If the police seize your computer equipment because they suspect you of downloading such images, every single file on every device seized has to be checked. That is 100s if not 1000s of man hours for EACH person. I think it was said they arresting several hundred a month.
At the same time, there has been a huge rise in allegations of historic sexual abuse following on from Savile, Yewtress, more recent cases connected to youth football etc. I think it was said there have been 70,000 allegations, all of which have to be investigated.
In terms of indecent images, after 1000s of man hours have been spent and every image catalogied, the offender is charged. Unless there are aggravating factors (pleading not guilty, offender is a teacher or community figure, previous offences, real risk of escalation to contact offences) then it is very unlikely they will get a custodial. Instead they'll get probation, put on the Sex Offender's register, and have to attend counselling/ therapy.
One force is therefore piloting a scheme to visit offenders', warn them and help them get treatment. Given that treatment and not a custodial penalty is the likely outcome anyway, the argument is does it not make more sense to use those 1000s of man hours spent cataloging images and use them instead to investigate historic allegations or other crimes? I can see the sense in that line of reasoning given how impossible it is for someone viewing these images to get help absent police involvement.