An ethnic minority women's rights centre has been refused a grant by the Department for Education and Skills on the grounds that it includes overhead costs that the department deems to be too high.
Tania Bronstein, chair of the Latin American Women's Rights Centre, said: "The Government says it is in favour of full cost recovery but, when a small ethnic group like ours tries to claim it, we are told that our bid is too expensive."
The group had applied for a grant of £97,000 over two years. David Hunter, the policy and development officer at Acevo, which is campaigning for charities to be able to recover their full costs, called for a level playing field.
He said: "Voluntary organisations aren't always treated in the same way as those in the public sector. All service providers have a duty to be honest about costs."