Appearing before the education select committee today, Zahawi was asked a number of questions relating to financial pressures on local services designed to support vulnerable children and families.
In January the Local Government Association warned that children could be left in circumstances of risk unless the government acts to plug an estimated £2bn funding gap. A separate study found that children's services are now the top financial pressure for councils.
In response to Emma Hardy, Labour MP for Kingston upon Hull, who warned that a lack of early intervention support for families is contributing to the increased number of children in care, Zahawi said: "Early intervention is important. On funding, we have got a piece of work with the Department for Housing, [Communities] and Local Government to look at funding properly, although local authorities have increased funding on children in care."
He went on to cite the example of work in Wigan where health workers are able to identify before a baby is born that that a family will probably need early intervention.
"If we get smarter, sometimes sharing data in government, then I think we can make a bigger difference."
"We are looking at the whole funding issue, although funding for this actual area has gone up in real terms since 2010.
Committee member Lucy Powell, a Labour MP and former shadow education secretary told Zahawi: "We are at a chronic crisis point now when it comes to demand and funding."
She said the number of children taken into care now is at its highest level since 1985, the number of child protection plans has doubled in the past 10 years, yet the most deprived councils have had their children's services budgets cut by a quarter.
"The overspend across local authorities in children's services is absolutely enormous - well over £600m.
"Is that not why council leaders of all parties are now saying we are at crisis point with demand and funding not matching at all?"
"We want to look at the evidence," Zahawi said.
"We have actually channelled more money into the system including £200m into the innovation programme and a further £20m for those authorities that are struggling.
"There is very little correlation, at all, between the cost in a local authority for delivering really good childcare, safeguarding and all the other good children's services in a local authority, and the amount of money they spend. Actually, much of the evidence suggests [the importance of] leadership.
"If I look at the councils that have turned around, Doncaster being one, it is about having a strong leadership, but not just strong leadership, it's about having a leadership that is actually consistent - i.e. that the workforce believes that that leadership will actually be in place for X number of years.
"There is not this constant change at the top with different priorities being set. Much of the workforce in Doncaster was there when the council was failing. Yet they are now the same people who are doing great. Much of this stuff is about really great leadership. I think simply focusing on let's just chuck more money at this and it will solve itself - it won't."
Labour had called on the government to use yesterday's Spring Statement to provide the necessary funding to place children's services on a sustainable footing by "reversing tax giveaways to large banks".