Voluntary sector representatives have expressed relief that existing contracts under the Department for Work and Pensions' Future Jobs Fund, which creates work placements for jobless young people, will be honoured.
Chancellor George Osborne announced on Monday that the programme would be frozen as part of £6.2bn of spending cuts.
Hundreds of voluntary organisations have received payments under the £1bn fund, created by the Labour government in 2009, to part-fund the six-month work placements. So far grants have been issued for 60,000 placements, many organised by the voluntary sector.
Existing contracts under the fund, including those delayed during the pre-election period, will be met. "For all organisations in receipt of grants it will be business as usual," a DWP statement said.
Stephen Bubb, chief executive of Acevo, said: "Getting the coalition government to commit to maintaining the existing contracts in these tough times was no small feat. We're glad that third sector organisations will continue to support the young unemployed in getting in to work this year."
Allison Ogden-Newton, chief executive of Social Enterprise London, said: "The announcement confirming that existing Future Jobs Fund contracts will be ‘business as usual' until March 2011 is welcome. This stuff is solid gold, so we will be scanning the horizon to see what new programme replaces it."
But Peter Holbrook, chief executive of the Social Enterprise Coalition, described the scrapping of the Future Jobs Fund as disappointing.
"I very much disagree with the government's description of the Future Jobs Fund as an ‘ineffective element' of employment programmes," he said.