The £23m is from the Youth Sector Development Fund. Those receiving cash include Youth at Risk, which works with disengaged young people and the Brathay Hall Trust, the Home Office revealed today (11 December).
Beverley Hughes, children's minister, said often it was third sector organisations that were best at providing positive activities.
"That's why this funding today will help and support smaller third sector organisations to provide diversionary activities at a grassroots level for the most disadvantaged young people," she said.
The announcement came as a coalition to encourage young people to put down knives was launched. Figures from sport, music and business came together with families and community groups affected by knife crime to get young people to say "no to knives".
Jacqui Smith, home secretary also outlined a £4.5m fund for local community groups to run diversionary activities for young people in the 10 Tackling Knives Action Plan areas. The Home Office revealed that the number of young people carrying weapons has dropped by 27 per cent in the areas targeted by action programme.
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