The Prison Family Support Alliance, made up of the Prison, Advice and Care Trust (Pact), Nepacs, Pops, and Jigsaw, also aims to develop the practice base around providing family support services.
Andy Keen-Downs, chief executive of Pact, said family support workers in prisons can help address safeguarding issues with the children of prisoners and support family relationships to help reduce reoffending rates.
He estimated it would cost around £6m to place family support workers in each of the 124 prisons and YOIs in England and Wales.
But this investment could reap savings of more than £70m in terms of reducing parental reoffending and the number of children taken into care, he added.
“Our view is that prisons and YOIs should have at least one dedicated family support worker to deliver effective casework to deal with safeguarding issues and, where appropriate, support the maintenance and strengthening of family relationships.”
Currently, there is no automatic check on the welfare of children left behind when a parent or sibling is sent to prison.
Breakdowns in family relationships upon release from custody have been linked with negative outcomes for children and contributing to high rates of parental reoffending.
“The Ministry of Justice has accepted that prison-based family support workers are a commissionable service,” Keen-Downs said.
“The difficulty we have is the government’s approach to commissioning these services is that they are optional and to be funded and commissioned locally by prison governors and local commissioning bodies.
“In these times of budget cuts and austerity that is very challenging.”
There are an estimated 95,000 children in England and Wales who have a parent in prison.
Speaking at the launch of the alliance, Justice Minister Jeremy Wright said: "We know that families can play an important role in supporting an offender to make and sustain those changes which reduce re-offending.
"This is one of the reasons why we recently announced the location of 70 resettlement prisons across England and Wales.
"Prisoners will now be sent to prisons close to where they will live on release so they can keep in contact with their families and begin working towards their rehabilitation in the community.
"This alliance will work with prisoners and their families and help support our reforms to tackle our stubbornly high reoffending rates.”