The troubled families initiative, where councils take an holistic approach to the needs of families, has the potential to deliver billions of pounds in savings.

It is estimated that nationally, the 120,000 troubled families cost the taxpayer £9 billion per year, £8 billion of which is spent purely reacting to their problems and the problems they cause, such as truancy, youth crime and anti-social behaviour.

Latest calculations by councils show the potential for savings. Barnet Council spends almost £100,000 on average every year on responding to each of its troubled families, compared with costs that can be as little as £10,000 per family for a successful intervention. Solihull Council spends 18% of its overall budget on just 3% of its families before it started working on the troubled families.

Similar savings are predicted elsewhere. Greater Manchester council is making an overall saving of £224 million from spending £138 million more effectively on their 8,000 troubled families. West Cheshire estimates that the average family costs around £7,795 to the local authority alone, while the average troubled family costs an estimated £76,190.

Communities Secretary Eric Pickles said: “The prize here is potentially huge, both in terms of reducing the financial cost on the public purse and the human costs on families and communities. The savings we can make for the taxpayer would far outweigh the extra money we are putting in.

“Momentum is building behind this work and we will do much more in 2013. We will start showing the communities around these families that things are changing for the better, with kids back in school, crime coming down and parents sorting out their problems and getting back towards work. And we will do all this in bigger numbers than ever before.”