The National Citizen Service today announced that it is changing its delivery model to allow more small organisations to take part.
The NCS Trust currently awards contracts to eight regional delivery partners, which then work with local delivery partners to offer activity schemes for young people.
But it plans to scrap regional delivery partners and work directly with local delivery partners.
The NCS said the move would increase the number of organisations involved, save money, have greater impact and remove duplication.
The National Audit Office, the government spending watchdog, said last year that costs for the scheme must fall by 30 per cent if the flagship £1.7bn voluntary sector programme were to stay within budget.
This month the Local Government Association called for NCS money to be diverted to councils to plug a shortfall in youth services spending if the scheme proved less effective than other youth programmes.
Michael Lynas, chief executive of the NCS Trust, told Third Sector it had been considering the new direct delivery model, which it describes as "NCS 2.0", for some time and had successfully tested it in south-west England for the past two years.
"We want to work with more great organisations that know how to get the best out of young people," said Lynas.
The trust will also test incorporating other areas of interest to young people, such as digital, sports, drama and the arts.
Three of the nine NCS regions – London, the south west and the north east – will adopt the new direct delivery model when current contracts with regional delivery partners expire next year.
The NCS will award another final batch of three-year contracts, with the option to extend to five years, in the other six regions.
Details on how charities in the new direct delivery model regions can bid for contracts will be available here from the middle of next month.
Lynas said most of the contract funding would be to deliver services, rather than payment by results.
He added that the new model would remove a management layer because trust staff would no longer have to deal with regional delivery partners.
He said it was "hard to say" if this would lead to job losses because the NCS was a "growing programme".
Lynas said procurement rules meant organisations from all sectors could bid to become local delivery partners, but he expected the vast majority to be voluntary or public sector organisations.
Fifty youth organisations, 43 sports clubs and eight councils currently help to deliver the NCS – but Lynas said he expected this number to increase considerably under the new direct delivery model.
"NCS has achieved so much already by helping to change the lives of nearly 500,000 teenagers, but we are ambitious for the future," he said.
A spokesman for the National Council for Voluntary Organsiations said it was a "positive announcement with the potential to enhance how NCS works", adding: "The test of the strategy will be in how well it succeeds in growing collaboration with the voluntary sector."
Nathan Yeowell, head of policy at the think tank NPC, said "refocusing the NCS to try and have more impact and better value for money is obviously a good thing".
Yeowell added: "We hope the government takes a joined-up approach and the evaluation of this pilot will feed into the design of its new £90m youth employment service, as announced in last week's Civil Society Strategy."