The former work and pensions secretary, Yvette Cooper, has criticised the coalition government for failing to consult the voluntary sector on its decision to axe the Future Jobs Fund.
The Chancellor, George Osborne, announced last month that the fund, which creates short-term work placements for young people, had closed to new applications as part of the government's £6.2bn programme of spending cuts. He said existing contracts would be honoured.
In last week's House of Commons debate on economic affairs and work and pensions, Cooper, the Labour MP for Normanton, Pontefract and Castleford, said the coalition had broken election promises by cutting the fund.
"There has been no consultation with the voluntary sector", she said. "So much for the big society; this is, in fact, just a big sham.
"There has been no consultation with young people and no listening to the thousands of young people who are getting their first chance because of the Future Jobs Fund."
Iain Duncan Smith, the work and pensions secretary, replied: "We face a nightmare in which we have to look at the spending to make sure that whatever we spend delivers real-life change."
A spokesman for chief executives body Acevo said: "There is no point bickering now. The crucial thing is that the third sector remains central to the government's future welfare-to-work programmes."
Peter Holbrook, chief executive of the Social Enterprise Coalition, said he hoped the most successful elements of the fund would be retained.
"In particular, we would want to make sure that contracts under any new scheme are flexible and local enough to allow social enterprises to compete," said Holbrook.