The film, set a year before the final episode of the TV series, includes one of the last appearances by Richard Beckinsale, the actor who played Godber. He died in March 1979, a few weeks after its completion.
Life moves by at HM Slade Prison on a day-to-day basis, with the usual antics of the various inmates becoming usual form. The newly-arrived and violent armed robber, Oakes (Barrie Rutter) approaches the Slade Prison's Mr. Big, Harry Grout (Peter Vaughan), and using a cut from his last job before being caught, asks for his escape to be arranged. Grouty sets the price, then begins making arrangements.
Grout starts by forcing Fletcher (Ronnie Barker) to persuade the prison Governor to allow an inmates-versus-celebrities football match, to boost prisoner morale and 'put Slade on the map'. Fletcher gets new prison officer Mr Beale (Christopher Godwin) to make the suggestion to Tough officer Mr Mackay (Fulton Mackay), who approaches the governor and it is accepted, although all three claim the idea was theirs alone. Fletcher then becomes the prison team's manager and Grout next insists that Oakes be on the team.
The celebrity team arrive in a coach. During the match, Oakes feigns an injury and is taken to the changing rooms where he meets the coach driver, revealed as an accomplice. They exchange clothes and Oakes ties the coach driver up to throw off any suspision. Shortly afterwards, Godber (Richard Beckinsale) is concussed on the field so Fletcher takes him to the changing rooms. Taking no chances, Oakes forces Fletcher and a dazed Godber into the coach's luggage compartment at gunpoint then drives out of the prison under the guise of topping up the fuel.
Oakes meets further accomplices and they drive the three inmates away in another vehicle. Meanwhile, the prison officers have discovered the escape and the police are searching for the coach, though the prison officers attempt to help isn't well met, as no-one can explain how they let three inmates drive out the front door. Fletcher tells Oakes that they don't want to escape as he and Godber only have a short time left to serve, and that they won't tell anyone about Oakes plan because it's 'Them and Us'. Oakes releases them and they find a barn to catch their breath. Fletcher explains to Godber that there is possible way that being caught outside ends well for them, as any policeman they approach will claim the find for himself. Furthermore, he realises that once the Governor, Mackay and Beale start passing the idea of the match back down the line, it'll end up with Fletcher looking like the responsible one and he'll serve more time, meaning the only solution is to break back into prison.
Making their way through fields and villages, they steal a sextons bicycle, and manage to sneak back into the coach just as the police let the prison officers take it back to the prison. Once inside the prison walls, both convicts slip out of the coach and smuggle themselves into the prison officers' club storeroom, where Fletcher quickly consumes several bottles of alcohol to become inebriated enough to make their story pass: They stumbled on Oakes tying up the bus driver and he forced them down the delivery hatch, where they claim to have been since.
The story is believed by all, and life seems to return to normal. As the other inmates question Fletcher on what really happened, Grouty subtly tells him that he will be rewarded for his efforts and keeping his mouth shut. Later in their cell, Godber laments that Oakes got away, though Fletcher assures him that it won't matter: Oakes will hate being on the lamb. Fletcher reminds Godber that in a few months, he'll leave prison as well: the difference being he'll be free and clear. Mr Mackay visits them and tells them that, while the Governor believes they have been locked in the storeroom all day, it doesn't explain the mysterious UFO Sightings (Unidentified Fleeing Objects), and the various happenings they created on their journey. Realising he will never be believed, he tells them that he will always be watching, and that his day will come.
Unlike the television episodes, the film is not a BBC production and there are no references to the corporation on the DVD release (2003).
The budget for the film was £250,000 and it was backed by Lew Grade's company ITC Entertainment. It was shot mainly on location at Chelmsford Prison, Essex, which was unoccupied at the time because it was being refurbished after a fire in one of the wings. The escape sequence was filmed in Buckinghamshire, and Boxley, Kent. There is also a brief shot of the gates of Maidstone Prison. Sets were constructed for some cell and kitchen scenes.
Most of the filming took place in freezing conditions in January 1979. The resulting delays to the filming schedule meant that the part written for Tony Osoba had to be reduced because he had a commitment to appear in Charles Endell Esquire and his lines were given to other actors.
The opening credits of the film feature the hit "Without You" by Nilsson and "Hit Me with Your Rhythm Stick" by Ian Dury and the Blockheads. The closing credits contain a more upbeat song by Joe Brown, entitled "Free Inside".