The research, commissioned by London Councils and carried out by PricewaterhouseCoopers (PwC), examined how much cash public bodies could save by using the Total Place approach to services, which is currently being trialled by the government in 13 local authorities.
Closer working between health and social services on chronic care cases in the capital could save more than £800m for every £5bn budget, the report found.
Cash could also be saved if local authorities integrated youth offending teams with local youth provision, education services and drug and alcohol teams, the report said.
It suggested the Youth Justice Board, the Home Office and the Department for Children, Schools and Families give councils a series of grants to tailor spending to local priorities.
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