Local authorities are to receive £20m for a new homeless prevention strategy to pilot initiatives on the issue, the Department for Communities and Local Government (DCLG) has announced.

The funding pot, jointly announced by prime minister Theresa May and Communities Secretary Sajid Javid, comes from a new, larger £40m programme to tackle homelessness through prevention.

The £20m for councils is aimed at responding to the specific needs of communities and focusing on prevention at an earlier stage before families reach ‘crisis point'.

The scheme aims to assist those working with a wider group of at-risk people to help individuals and families before homelessness occurs through plans such as a new resident advice service and outreach work with landlords and private sector tenants.

Other elements not allocated to councils include a £10m support package for those at imminent risk, and another £10m for social impact bonds to assist the long-term homeless – including addressing mental health issues or substance abuse which may be factors in continually leaving the social housing system.

Mrs May said the funding was being allocated as a fresh approach was required to look at the underlying issues of homelessness, and builds on the £315m local authority homelessness prevention fund and central pot of £139m already allocated for the next four years on the wider issue.

She said: 'We know there is no single cause of homelessness but I am determined to do more to prevent it happening by supporting those facing challenging issues like domestic abuse, addiction, mental health issues or redundancy, whilst also being prepared to offer a safety net to catch those who might simply be struggling to get by.'

Communities secretary Sajid Javid said: 'It will fund different projects around the country, preventing people from losing their home in the first place and helping to ensure that rough sleepers have somewhere safe to stay.'