Cornwall Neighbourhoods for Change, a charity that has been delivering welfare-to-work programmes for 10 years, has pulled out of the government’s Work Programme.
The charity had an income of £2.7m between January and December 2010, according to its latest accounts filed with the Charity Commission.
Third Sector understands the value of its Work Programme contract was several million pounds, based on figures for the scheme in Cornwall.
Work Programme providers are paid according to the number of people they get into work.
The charity’s welfare-to-work services will now be delivered by the private firm Prospects, which was its prime contractor. Fourteen of the charity’s staff will be transferred to the company under the Transfer of Undertakings (Protection of Employment) Regulations.
A spokeswoman for Cornwall Neighbourhoods for Change said she was unable to comment because the details of the contract were confidential.
The charity’s withdrawal comes days after Nick Harvey, the Liberal Democrat defence minister and MP for nearby North Devon, wrote to the employment minister, Chris Grayling, to say charities were struggling to deliver the programme because of its "tight margins".
Prospects and the Department for Work and Pensions were unavailable for comment.