A Hindu charity has pulled out of the Diamond Jubilee year faith-based volunteering initiative, A Year of Service, after a £65,000 grant was made to the group leading the scheme.

Sewa Day yesterday announced it was stepping down from the scheme after Mitzvah Day, which is the lead partner on the initiative, received a £65,000 from the Department of Communities and Local Government for what Sewa Day believes was an unspecified purpose.

A Year of Service (AYOS) is an initiative tied in with the Diamond Jubilee year in which faith groups work together in community volunteering. Every month each of the country’s nine main faith groups host different volunteering days, coinciding with their own religious festivals, and invite people of other or no faith to join in.

Sewa Day chair Arup Ganguly on a blog post wrote: “Due to concerns that we have regarding the financial governance of AYOS, we have decided to step away from our involvement in this project.

“£65,000 seems an overly generous amount of funding given the scope of the project. Especially given that all of the AYOS group members are funding their own AYOS activities, it’s puzzling that the government has allocated such a large amount of taxpayer money to the project organiser. Indeed, we organise Sewa Day for a fraction of the cost.”

The Department for Communities and Local Government disputed claims from Sewa Day that they had ignored or delayed responding to the charity’s requests for information about the purpose and management of the grant.

A spokeswoman for the Department said: “The A Year of Service initiative is already proving to be a great way for faith groups to mark the Diamond Jubilee. In the first four months there have already been around 20 multi-faith volunteering projects, from visits to old people's homes to wrapping gifts for the homeless.

“DCLG has always replied promptly to all private communications from Sewa Day and has answered parliamentary questions on A Year of Service. We are continuing work with all the other faith groups involved in A Year of Service to ensure it is a success and very much hope that British Hindus will play a part in that."

A Mitzvah Day spokeswoman said: "Mitzvah Day is extremely sorry that Sewa Day has withdrawn from A Year of Service, citing a lack of transparency regarding funding.  On 21 May Barry Gardiner MP asked a Parliamentary Question regarding the grant made to us for the administration and promotion of A Year of Service.  A full and frank answer was provided and information was also sent directly to Sewa Day.   

"We hope that the British Hindu community, such a significant presence in local communities and sharing our core values of giving and doing good works, will embrace the unique opportunity that A Year of Service offers for inter faith social action during this Jubilee year."