Does the state spend £8 billion a year on 120 000 "problem families"?

"Britain's Shameless families cost the taxpayer £8bn every year", 
Daily Mail, 18 October 2011

In the wake of the August riots, David Cameron pledged that the Government would step in to turn around the lives of 120,000 problem families.

Today the Daily Mail reports the the combined impact on the public purse of these dysfunctional families is more than £8 billion, highlighting why the Govenrment is looking to fund ways to provide help to these families.

But where did this £8 billion figure come from?

Analysis

The Mail sourced its claim to the Communities Secretary, Eric Pickles, who quoted the figure in a speech yesterday.

Full Fact's suspicions were instantly raised when, looking at Mr Pickles' remark, we found that the Communities Secretary had actually claimed that these 120,000 families were "costing the economy [our italics] over £8 billion a year", he did not reference the taxpayer. Could this, we wondered, mean the figure included such things as lost earnings to those who were unemployed?   Unable to find a breakdown of this figure, Full Fact contacted the Department for Communities and Local Government (DCLG). They informed us that this £8 billion cost of 117,000 families was, in fact, an extrapolation from calculations from the Department for Education that 46,000 families cost the state £4 billion.

As we can see then, this estimate is actually, as the Mail claims, referring to more direct expenses to the state, rather than the wider economic costs, as could be inferred from Mr Pickles' remarks.   There are of course questions to be asked about the extrapolation by the DCLG from the cost associated with the group of 46,000 families to that associated with the group of 117,000. The DCLG stressed that this was only an estimate. Full Fact has pressed the DCLG on the issue of this extrapolation, but as yet has received no further reply.
Conclusion   The Daily Mail's article is, on balance, an accurate representation of the DCLG's position, which has estimated that 117,000 families cost the state approximately £8 billion.   However, before we can be completely confident about the £8 billion figure itself, we will need more information from the Government as to exactly how it was produced.