The scheme follows Prime Minister David Cameron’s announcement lastmonth of a plan to turn around the lives of 120,000 families.

Eight suppliers from the Work Programme will be involved, along with local authorities, to help families with multiple problems overcome barriers to employment.

Support will include parenting advice, debt and money management guidance, help in tackling health problems and jobseeking techniques, such as CV writing.

Councils will decide which families are given the support. To be eligible, at least one member of the household will need to be receiving benefits.

The support plan is an extension of the Work Programme’s payment-by-results schemes. Suppliers will be paid in three stages, starting when they have agreed action plans with individuals, through to when they have moved into jobs.

Employment minister Chris Grayling said that the organisations taking part in the programme were ‘staking their own money on their ability to turn the lives of these people around’.

The eight Work Programme providers will co-ordinate the work of more than 200 local organisations, over 50% of which will be from the voluntary and social sectors, the Department for Work and Pensions said.

Grayling added: ‘This is our second big payment-by-results project, and demonstrates clearly that there is a real commitment out there to deliver social change and to help people do much better with their lives.

‘We now have a comprehensive programme, built on a partnership between national and local government, that I believe can make a real difference to these troubled families.’

A spokesman for the Local Government Association said that the new funding was a ‘step in the right direction in helping troubled families’.

He added: ‘However, we must ensure all this extra support gets to where it is most needed and is not tied up in endless bureaucracy and form-filling.’

The National Council for Voluntary Organisations welcomed the ‘very positive’ announcement that more than half of the organisations involved would be from the voluntary sector.

Chief executive Sir Stuart Etherington said: ‘We are pleased that the voluntary sector will play a central role in delivering the programme. Voluntary organisations have vast knowledge and on-the-ground expertise of working with marginalised groups, developing skills and confidence and helping people to become job-ready, so it is very encouraging that this scheme will enable them to play to these strengths.

‘As ever, the devil is in the detail, and we look forward to receiving further clarification on the degree of involvement for voluntary organisations within the programme, and how the payment by results system will work in practice.’