A radical plan to end the scourge of rough sleeping by placing homeless people in permanent housing before they have conquered problems such as alcohol abuse, drug addiction and mental illness is being considered by Theresa May’s government, following successful trials in UK cities and abroad.

In what would amount to a revolution in policy, involving upfront investment in housing places for rough sleepers with troubled lives, communities secretary Sajid Javid told the Observer he was keen to examine the scheme, under which people are placed straight into permanent homes with access to care and training to help them get into work.

The approach – known as Housing First – turns the existing “treatment first” policy on its head and works on the assumption that people make most progress sorting out their lives once in a stable home, rather than a hostel or shared temporary accommodation.

Housing First was originally piloted in the US with positive results before being adopted in Finland, where it has reduced homelessness. A major report by the Centre for Social Justice (CSJ), the thinktank formed by former cabinet minister Iain Duncan Smith, is now recommending this approach as a way to tackle rough sleeping and homelessness in Britain.

The CSJ is calling on the government to adopt Housing First nationwide by investing £110m to secure homes in the private rented sector for those who have suffered recurrent homelessness, and to provide wraparound care and advice once they are housed. It argues that the scheme would pay for itself within three years by cutting the costs of remedial treatment, which often has little positive effect.

Homeless people currently have to progress through different types of hostel and shared accommodation, where they must show they have undergone treatment for their problems before being awarded a tenancy. But the CSJ says that approach should be “flipped”, with the first priority being the provision of a permanent home.

Its report states: “Housing First prioritises rapid access to a stable home for someone, from which they can then begin to address other support needs through coordinated wraparound support and case management. Importantly, someone does not have to prove that they are ‘housing ready’ to access permanent housing and there is no requirement to engage in support services to continue to maintain a tenancy.”

Sajid Javid: ‘My department will be studying the recommendations closely.’ Photograph: Dan Kitwood/Getty Images

At present, people have to prove they are “housing ready” under a “treatment first” system that, because of the environment in which they live, the CSJ says, “has been found to make their lives even more chaotic, rather than acting as an incentive to change”.

In Finland, between 2008 and 2015, around 2,500 new dwellings were built for homeless people, supported by teams of trained advisers, with the effect of dramatically reducing homeless numbers and securing the vast majority in stable tenancies. It has also been piloted in Manchester, where 80% of tenancies have proved to be stable. There, the local authority has saved £2.51 for every £1 invested.

The number of homeless people has risen rapidly in England over the last six years, mainly as a result of private tenants being evicted by landlords seeking higher rents. Numbers have soared by more than 130% from 1,800 in 2010 to more than 4,000 in 2016 on any given night.

Each year, around 34,500 people sleep rough in England. The CSJ report acknowledges that many of the problems are the result of decades of failed housing and social policies, which have seen the stock of social housing reduced and people forced into homeless by a combination of rising house price and rents in the private sector, and squeezes on benefits.

Javid said he was attracted to the Housing First concept and would visit Finland to see how the system worked. “My department will be studying the recommendations closely, as this is a cause close to my heart. I’m particularly interested in Housing First as a means to ending chronic homelessness. I intend to travel to Finland to learn more about the approach.”

Andy Cook, chief executive of the CSJ, said: “Home is the secure base for the whole of life. Without this, people are unable to lead settled lives, maintain employment or provide an environment that will help their children escape poverty.

“The scheme offers a long-term solution for some of the most vulnerable people in our society. It is a smart, upfront investment that will save the government money and, more importantly, save lives.”