A total of £62.2 million was spent on treating teenagers who misuse substances in 2008/09, but the combination of short and long-term benefits will lead to savings of between £290 million and £522 million, according to the study by Frontier Economics.
These include an immediate 55-65% reduction in offending by young people receiving treatment, a 40% drop in deaths and hospital admissions, and long-term benefits for education, employment and health.
The immediate benefits alone total £120.1 million while the longer-term benefits could top £400 million over a lifetime, found the study for the Department for Education.
Overall, a conservative estimate found that every pound spent on teenager's drug and alcohol treatment could save between £4.66 and £8.38 over a lifetime, it said.
A record 24,000 young people received drug and alcohol interventions in 2008/09, the vast majority for problems with cannabis or alcohol, said the National Treatment Agency (NTA).
NTA chief executive Paul Hayes said: "Heavy use of cannabis or alcohol can lead to exclusion from school, family breakdown and crime.
"For those teenagers who seek help, substance misuse is usually one of a range of problems causing difficulties in their life, which is why treatment services must work with partners in youth services to offer a range of support.
"This research shows their efforts pay dividends for society as well as benefiting individuals, and underlines the importance of maintaining investment at local as well as national level."
Last year, the Government's drugs strategy showed a shift in focus from reducing the harms caused by drugs to recovery as the most effective route out of dependency, with users who are taking steps to become drug-free offered tailored support for their needs.
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