Vicky Foxcroft, who is running as the Labour candidate for Lewisham Deptford in south-east London in the general election, said that attempts to get further information on NCS spending from the Department for Digital, Culture, Media and Sport had been ignored.
The Challenge, which employs 210 people, launched a £22m legal claim last month against the NCS Trust after losing the contract, with The Challenge claiming that the trust’s software system was "inadequate and/or not fit for purpose".
A statement from the charity said it had raised concerns about the NCS’s contracts with the DCMS 16 days before The Challenge lost the contract, but nothing had been done by the government in response.
Foxcroft said: "The Challenge has been in touch with the DCMS time and again to raise their concerns about the NCS and funding. These should have been followed up, but instead their concerns were shoved under the carpet and ignored.
"We now need urgent answers about how the NCS is going to deliver its programmes in the future.
"I have also sent in several requests to the DCMS under the Freedom of Information Act about where NCS money is being spent, but these have all been ignored. These are questions that need addressing."
Foxcroft tweeted to the outgoing culture secretary Nicky Morgan, asking why nothing had been done to save The Challenge, though she had been made aware of the situation by the charity.
@NickyMorgan01 - I know you're standing down but I can't believe you've just watched @TheChallenge_UK go into administration w/out even meeting to discuss concerns. 100s of youth workers are set to lose their jobs.— Vicky Foxcroft (@vickyfoxcroft) November 27, 2019
The NCS Trust pointed to a statement released earlier this year in which it announced that it was expanding its delivery network to include hundreds of new partner organisations and expected its delivery costs would fall by 30 per cent over the next five years.
The DCMS said it was unable to comment because of the forthcoming general election.