The report Teenage Kicks, commissioned by the Laureus Sport for Good Foundation and produced by think tank New Philanthropy Capital, examined three projects, which use sport to engage young people in a wider programme of education and support.
One project, the Boxing Academy, was found to cost half as much to run as a pupil referral unit and generated lower re-offending rates among young people.
Report author Camilla Nevill said: "Cuts to sport and youth projects are a false economy. Sport combined with targeted support has huge potential to engage hard-to-reach young people, change lives and communities, and provide value for money."
Another project, Kickz, was found to create £7 value for every £1 invested by reducing costs to victims, police, prisons and courts.
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