Some charity subcontractors involved in the delivery of the National Citizen Service will lose a quarter of their funding next year as a result of changes to the structure of the programme, Third Sector has learned.
One charity subcontractor that asked not to be identified told Third Sector it was paid £1,300 per place for delivering the pilot programme in 2012, but it was being offered only about £980 per place – a reduction of 25 per cent – by the prime contractor Serco to deliver the contract in 2013.
The government awarded a Serco-led consortium called the NCS Network six of the 19 regional contracts available for 2013 and 2014 in September.
The NCS programme offers 16 and 17-year-olds the chance to take part in projects including community work, physical challenges and residential placements over an eight-week period.
A spokeswoman for the charity said: "This is a huge reduction for a small organisation such as ours. If we deliver the programme, we will get tens of thousands of pounds less than last year."
A spokeswoman for the Cabinet Office said that some subcontractors would receive less money in 2013 because they would not have to perform certain functions, such as running regional marketing campaigns, which will "free them up to focus on delivering high-quality programmes for young people".
She said that most of the prime contractors delivering the scheme in 2013 and 2014 were charities themselves.
A spokesman for Serco said: "We do believe that we are bringing value for money to this contract. We are also working through a network of voluntary sector organisations that are skilled in this area."
The charity questioned the involvement of private sector firms in the contract. The spokeswoman said: "The only thing that Serco seems to be doing is helping with recruitment. But I fail to see how a four-person Serco team, working across a whole region, will make a difference to recruitment in this borough.
"The marketing campaigns that Serco plans to coordinate centrally will not engage young people living in temporary accommodation, young carers or young people with disabilities – the kind of young people we recruited this summer through spending time working with organisations that support them."
Joe Irvin, chief executive of local infrastructure body Navca, which has previously raised concerns about the role of the private sector in the NCS, said: "There is a danger in government awarding huge contracts to powerful private companies, without sufficient transparency, that charities will be taken for a ride and people get a poorer service."