The agency's chief executive, Bob Pickersgill, said he was disappointed to have lost the contract and would now wind up the agency and de-register it as a charity.
From 1 September, the borough's youth service and five youth centres will be run by Prospects Services, which has won the 8.6 million 10-year contract (YPN, 6-12 August, p4).
Pickersgill said: "I am very disappointed - I think we had been running the contract very well for 11 years, but the local authority decided it wanted a larger organisation to run it."
He said there was an agreement with the local authority "on trust" that the agency's 77 staff would transfer to the new contractors.
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