The Department of Health has been accused of causing "dismay" to voluntary and community groups after it stopped core funding for new applicants.
Many of the groups have been left facing uncertainty about their future after it emerged the Department's Core Grant Funding scheme for 2023/2024 would only be providing limited funding to existing applicants.
The scheme, which has £3.6 million to allocate, received 256 applications seeking in excess of of £25 million.
In a letter sent to those who made an application for the first time, the department said that the "budget situation has materially worsened to the extent that there is no guarantee that we will be able to sustain funding at the 22/23 levels.
"I have decided not to proceed with the current competition but to roll over current arrangements with the existing organisations that benefit from a core grant for another period. That period will initially be for three months until we have greater clarity on the 23/24 budget".
Sarah-Jane Campbell, Project Manager of mental health community hub, The Well in Kilkeel, which applied for funding for the first time, described the block on new applicants as "such a let down".
"The Well came about by the community and was built by the community because they were let down in the first place," she said.
"The statutory services are referring people to our service. That is so ridiculous. They are putting the pressure on the voluntary and community service because they don't have the resources to deliver what they should be delivering and they are funded".
She added: "Our service is saving lives. We are not only preventing suicides but we are getting people well and better".
Colin McGrath, SDLP health spokesman, said he is "seriously concerned" by the decision to stop new applications for health funding.
"Not properly funding these community and voluntary groups will actually result in even more pressure being piled on our existing health service and they cannot work at the current level," he said.
A spokesman for the Department of Health said: "The decision has been made to continue with the Department’s existing Core Grant Scheme for an initial three-month period, until we have greater clarity on our budget for 2023/24.
"Longer term certainty on this funding is, unfortunately, not possible at present.
"As announced by the then Health Minister in October 2022, the Department had sought to open the Core Grant Scheme to new applicants under a new competitive process.
"This competition was significantly over subscribed.
"It has been decided that a new revised scheme is required, to maximise the spread of the grant across the sector.
"It is intended to launch this revised scheme in Autumn 2023, subject to the budgetary position".
