The update is among a number of findings published in the National evaluation of the Troubled Families Programme 2015-2020, which also reports reduced numbers of juveniles receiving custodial sentences.
The analysis compares families involved in the scheme to a control group which was not given the specialist help.
This includes support such as family coaching, domestic abuse interventions and positive activities for children and young people.
"The most striking finding is that the programme appears to have reduced the proportion of looked-after children," the report states, adding: "2.5 per cent of the comparison group were looked after compared with 1.7 per cent of the programme group, a 32 per cent difference for this cohort at 19 to 24 months after joining the programme.
"The impact on those on the programme is likely to have huge benefits to children's lives, contributes to managing children's social care pressures and provides significant savings."
According to the report, the encouraging results are consistent with the findings of a survey of staff, which found that 90 per cent of keyworkers "believe the programme is successful in helping families avoid statutory intervention".
It continues: "Case study research also noted that children's social care services were collaborating with early help teams to reduce the burden on social workers and deliver better outcomes for families."
Reporting on juvenile detention, it states that there were 38 per cent fewer after 24 months in the programme - with 0.5 per cent in this category, compared with 0.8 per cent in the control group.
The programme, launched by then Prime Minister David Cameron following the 2011 London riots, began work in April 2012 and was expanded in 2015 with an aim to reach 400,000 families.
It has previously faced criticism for its "accusatory" tone and also for being ineffective, with experts questioning Department for Communities and Local Government claims in March 2015 that 105,000 families had been "turned around" and £1.5bn of public money saved.
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