£4,000 a time on offer for councils that solve problem families issue

Local councils which succeed in tackling problem families are to be paid up to £4,000 for each household whose lives they turn around, the Government said.

Communities Secretary Eric Pickles said the payment-by-results scheme could produce significant savings for the taxpayer by reducing the £9bn a year currently spent on the 120,000 most troubled families in England.

Under the plan, local authorities in England will stand to gain if they succeed in getting the children into school, reducing youth crime and anti-social behaviour, and putting the adults back on a path to work.

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However they will only receive the full payment once they have delivered results and reduced the average £75,000 a year these families cost the taxpayer through their demands on public services.

For Birmingham, which has more than 4,000 problem families – the largest number of any local authority in England – it could be worth almost £14m over three years.

Other authorities that have signed up include Leeds, where £7.3m could be available over the three years, Sheffield, which could be in line for £5.6m, as well as Bradford, where the initiative could see the council receive £5.8m if the efforts succeed. Lancashire, Kent, Manchester, Essex, Liverpool, and Norfolk are also involved.

Mr Pickles said the scheme was designed to “incentivise local authorities to deal with the truancy, crime and worklessness that can be passed down from generation to generation”.

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The 10 local authorities with the largest numbers of troubled families signed following Prime Minister David Cameron’s announcement last year of £448m of Government funding over the next three years.

Mr Cameron appointed Louise Casey, ex-Victims Commissioner and Tony Blair’s former “respect tsar”, to lead the Troubled Families Team, overseen by Mr Pickles.

Since then, the Department for Communities and Local Government has reached an agreement with the Department for Work and Pensions which allows jobcentres to share data with councils in order to identify their troubled families.

Experts will be drafted in to assist families facing a range of challenges such as unemployment, mental health problems, children out of school, crime and anti-social behaviour and the troubleshooters will co-ordinate local support, secure extra funding and make sure the right action is being taken to resolve the problems.

The Prime Minister said he was committed to transforming the lives of families stuck in a cycle of unemployment, alcohol abuse and anti-social behaviour who were draining resources from councils.