Action for Children’s income fell by £6.6m in 2014/15, its latest accounts show, mainly because of a fall in its income from local authorities.
The charity’s accounts for the year to the end of March show that its income was £173.1m over the course of the year, compared with £179.7m in the previous 12 months.
The figures show that the charity’s income from its charitable activities, which would largely come from local authorities, was down from £156.1m in 2013/14 to £147.1m last year.
This was mainly because of a £7.6m fall in income for early years and family support.
The charity reduced its expenditure over the course of the year, from £168.5m in 2013/14 to £159.9m last year.
"We highlighted last year the continuing pressure on local authorities’ funds and a possible reduction in our income," the report says. "That has been the case in 2014/15."
It says that the charity has been working hard to make itself more efficient by making structural changes.
"Doing more with less is the new reality unless we substantially increase income from diversified sources to counter steep decline in statutory funding," it says.
"With demand for front-line services on the increase and further budget cuts ahead, our challenge over the next five years will be to continue to become more effective and efficient across all our activities.
"This year, data from across more than 650 local services reveals that, despite cuts, we continue to deliver a real and lasting difference for children and families across the UK."
It says that the total number of employees increased from 4,709 to 5,363, but the total number of full-time-equivalent posts fell from 3,781 to 3,478.
It says that its highest-paid member of staff, named as chief executive Sir Tony Hawkhead, received payments worth a total of £163,952, including pension contributions, over the course of the year.