The Home Office should allow all voluntary organisations "fair access" to bid for services for victims of crime, a National Audit Office report into the work of the charity Victim Support has recommended.
The public spending watchdog says until last year the charity was the only body funded by the Home Office to provide services to witnesses and victims of crime.
Funding to Victim Support doubled from £12.7 million in 1998 to £25 million in 2001 because of a new Witness Service in magistrates courts.
But the Home Office has failed to open up new services to competition from other providers.
The report recommends that funding arrangements are reviewed and all providers are given the opportunity to bid for services, although existing services provided by Victim Support will not be subject to competition.
The Home Office has said that a new service for victims of road traffic incidents will be put out to tender as will all future services.
The National Audit Office, while praising Victim Support services as "a notable achievement", highlighted a wide variation in the level of personal support to victims, partly explained by a decline in the numbers of volunteers available to Victim Support.
Two thirds of victims found contact with Victim Support to be "very" or "fairly helpful" but volunteer numbers have dropped by around 3,000 since 1996 and 53 per cent of local groups reported problems in finding enough volunteers to provide support.
"We share the National Audit Office's concerns about the difficulties of recruiting volunteers," the charity said in a statement. "Despite the apparent fall in numbers, we had a huge success in recruiting people during the expansion of the Witness Service."