The £330,000 grant-funding will be distributed from April 2012 to encourage joint working between the voluntary sector and other organisations within the borough.
The move comes after a £2.3m cut to the integrated youth service budget was given the green light in July, taking the budget from £7.8m in 2011/12 to £5.5m in 2012/13.
Of the planned savings £300,000 comes from funding fewer activities such as trips or residentials; a further £400,000 from provision, including accreditation and youth sessions; £700,000 from the Connexions services; and the youth offending service was reduced by 31 per cent (£900,000).
However, the Labour-run council said the decision to maintain levels of funding to the voluntary sector will help protect front line services.
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