CSV says the future environment for its work remains “extremely tough”, as its newly-published accounts reveal that its income plummeted by over £10m to £22.5m in the year to 31 March.

The volunteering charity lost £5.7m in funding when the government’s Future Jobs Fund ended in 2011. It also lost its £1.1m strategic partner grant from the Cabinet Office, along with other government contracts.

The reduction in funding forced CSV to make two directors redundant earlier this year, and significantly restructure its senior management team. As part of this its chief executive Lucy de Groot (pictured) took over responsibility for human resources.

The numbers of full-time equivalent staff across the CSV Group, which also includes its subsidiary Springboard charities, fell from 575 in 2011 to 489 in 2012, a reduction of 86 people.

However, the numbers of senior staff earning between £60,000 and £130,000 increased by one, and the highest-paid employee earned between £120,000 and £130,000, whereas the previous year she earned no more than £100,000.

The charity's spending reduced to £24.3m compared with £29.7m in the previous year. It posted a deficit at the year-end of just under £1.8m.

Its accounts advise that its delivery and performance of services have been affected by the reduction in public funding.

CSV has unrestricted reserves of £7.1m and is working on increasing this to cover three months of unrestricted expenditure.

Looking forward, the charity says the continued squeeze on public finances and the UK and European recession will put severe ongoing pressure on its social action and volunteering activities.

In response, it is looking to develop productive collaborative and partnership models of working.