The LGA said appropriate supported accommodation could mean vital savings for the public sector and reduce the likelihood of admission into hospital or residential care.

Cllr David Fothergill, chairman of the LGA's Community Wellbeing Board, said high quality supported housing meant ‘astounding savings' for public services, adding: ‘Councils need a sustainable, long-term funding regime for these projects, to allow councils to invest in solutions that deliver a net-good across local services and meet local need.'

A scheme highlighted by the LGA in Bradford achieved savings of up to £47,000 per person for the NHS while another in Medway helped 151 people with complex needs access employment or training over nine months.

Previous analysis has suggested investing £1.6bn in supported housing would achieve savings of over £3.4bn.

A recent LGA survey found almost a third of councils aren't confident they will meet their duties under the Care Act next year, meaning that a significant uplift in funding was needed in order for them to meet their statutory duties.

A Department for Health and Social Care spokesperson said: ‘We recognise that the health of the nation and our economy are inextricably linked. That's why we're taking bold action to fix our NHS and tackle the causes of sickness. 

‘Prevention is better than cure, which is why this Government will shift the focus of healthcare from simply treating sickness to preventing it in the first place. 

‘Whether it be phasing out tobacco sales, implementing restrictions on advertising junk food, or increasing diagnostic capacity through investment in scanners to get the NHS catching cancer on time again – we are committed to ensuring that people live well for longer and that we unleash the potential of our economy.'