Statistics released by the Welsh government show that spending on youth services by councils fell from £40.5m in 2013/14 to £34.8m in 2014/15.
The statistics show there was also a decline in the number of youth work staff employed by councils with 931 full-time equivalent roles compared with 995 in 2013/14, a drop of 6.4 per cent.
The number of young people registered as members of local authority youth work provision also fell significantly.
In 2014/15 there were 106,450 young people compared with 117,196 in 2013/14 – a drop of 9.2 per cent.
Keith Towler, former children’s commissioner for Wales and chair of the Council for Wales of Voluntary Youth Services (CWVYS), said it is “worrying” that the spending on local authority youth services is falling.
“The voluntary sector and local authorities continue to work collaboratively to ensure that high-quality youth services are available to young people. However, diminishing financial resources create increased pressure at a time when young people need youth services more than ever.”
Emma Chivers, chair of trustees at Youth Cymru, said: “The reduction in funding, particularly for core frontline staff is concerning and is having an impact on young people’s ability to access and participate in youth work.”