Who are the 120,000 "problem families" and how much do they cost?

"Last year the state spent an estimated £9bn on just 120,000 families." Prime Minister David Cameron, 15 Dec 2011.

Problem families are "costing the economy over £8 billion a year". Eric Pickles, Secretary of State for Communities and Local Government, 18 Oct 2011.

The figure of 120,000 problem families, or at least one like it, is hardly new. According to one report: "In 2008 the government estimated there were 110,000 families living in chronic crisis. Many experts estimate the figure is closer to 150,000."

Nevertheless, it has been surprisingly hard to run down and has left many wondering where the figure has come from. 

Who are these 120,000 problem families and do they really cost £8 or £9 billion to support?

Analysis

The coalition's first Child Poverty Strategy, published this April, said that "it has been estimated that there are around 120,000 families in England with multiple problems."

It cites a Cabinet Office (2007) report - 'Families at Risk: Background on families with multiple disadvantages' - and explains that: "Having multiple problems is defined as having five or more problems from a basket of seven indicators including being in a workless household, overcrowding, maternal mental health problems, long standing limiting illness, low income and ability to afford basic items of food and clothing."

We tracked down that report from the now-defunct Social Exclusion Task Force which explains that "approximately 140,000 families with children experience five or more disadvantages."

It cites the "Social Exclusion Task Force's own analysis of the Families and Children Study (FACS)."

A Department for Education FoI disclosure explains that the 117,000 figure (rounded to 120,000) is an estimate of how many of the 140,000 families in the UK as a whole are based in England.

That at least shows that the figure has roots in credible social research. Unfortunately, as the Social Exclusion Task Force no longer exists, it is hard to ask them about their methodology.

One instant cause for concern is that that 140,000 estimate specifically relates to 2004. They say that their analysis "shows that around 2 per cent of families with children in Britain experience five or more disadvantages. In 2004, this represented around 140,000 families."

It is not clear that it is fair to assume that the numbers have not changed since 2004, either as a result of policy measures to improve the situation, or as a result of difficulties associated with the current economic climate. It certainly isn't clear that it is a figure for "last year" as the Prime Minister claimed.

There is also the less important danger that people unfamiliar with the source of the figure will not realise it applies to England alone.

As we discovered earlier this year, the estimate of £8 billion costs associated with these families is an extrapolation from estimates made of a smaller group of 46,000 families. The Department for Work and Pensions at the time stressed that this is only an estimate and it is not clear what level of confidence the Department attaches to it.

While David Cameron today placed the cost of these families at £9 billion, several of the morning's papers were still reporting the £8 billion figure we had spotted Eric Pickles using in October. We're keen to know why the cost seems to have risen by a billion pounds since breakfast, and have asked Number 10 for more information.

Conclusion

The Prime Minister and many others who are using this claim are raising a sound issue, namely that a relatively small proportion of families require significantly more resources than the rest, and that therefore this is a sensible place to look for improvement.

However, the figures behind it appear to be dated, so although the thrust may be correct, the apparent precision may be misleading.

Update 15/12, 2pm: Number 10 have told us the extra £1 billion refers to the amount spent on targeted interventions. They provided us with the following quote in reference to the £9 billion figure:

"£8 billion of this is spent on reacting to the troubles of these families with £1 billion being spent trying to turn around their lives in a targeted, positive way."