Independent assessors said they had found "evidence of young people's lives being turned around and a real sense of hope and community well-being" on the Wildmill Estate in Bridgend.
They added that police complaints about young people had fallen by 53 per cent and there had been a 61 per cent reduction in tenant turnover rates.
Wildmill is one of 21 deprived areas in England and Wales being helped by Youth Works, a charity partnership between Crime Concern, Groundwork and Marks & Spencer.
The programme began in 2002 with 65,000 in funding from six sources.
A further 185,000 from the now defunct Community Fund in 2004 enabled the scheme to flourish.
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