Charities fear they would struggle to run welfare-to-work programmes under the Conservative Party's proposed Work Programme because beneficiaries would have to be in work for twice as long as under existing programmes before charities were paid.
The party's policy document Get Britain Working says it would replace the New Deal, Flexible New Deal and Pathways to Work programmes with a single scheme designed to get people back into work.
Under the Work Programme, providers would be paid only once a person had been in work for a year or more, rather than the 26 weeks under existing Flexible New Deal contracts.
The document also says providers would be paid more for placing people who are "furthest from the labour market" into work.
A Conservative Party spokesman said the 40 per cent payment made up front on some Flexible New Deal contracts would be reduced, but the exact level of the payment would be decided if the party won the election.
Jonny Boux, head of employment programmes at Community Links, which runs projects in east London, said many third sector organisations were concerned about how they would find the capital to finance employment schemes for a year or more before being paid.
"The longer you have to wait for payment, the harder it is to put investment into people," he said. "At the moment, some prime contractors provide capital to the third sector groups they subcontract to, but it's not likely they'd do that if they had to wait a year or more for payment."
Rather than paying by results, said Boux, the party in government should monitor providers closely to make sure their schemes were successful.
Andrew Mills, chief executive of Jobsteps, a not-for-profit group that provides employment services for people with autism and other disabilities, said: "We would prefer to work within the existing funding mechanism, but if there are changes we'll try to accommodate them.
"Getting a higher fee for finding work for people with specialist needs would be a good thing for us and many other charities. But waiting a year for that payment would make cash flow a problem."
The Conservative spokesman said extending the 26 weeks would create sustainable jobs, and payment by results would improve quality. He said a Conservative government would be keen to work with voluntary groups.