NEEDY children in Hampshire are missing out on financial help because charities are not making use of Government cash.

Money put aside for good causes in the county could now be sent back to Westminster because of a lack of suitable takers.

The county's Winchester-based Local Network Fund has £550,000 to spend before March 31st, but organisers think strict conditions imposed by Westminster for awarding the grants might be deterring many.

But some charities claim the reason they have not applied is because they did not know about the fund.

Hampshire's LNF is one of many across Britain which are financed by the Department for Education and Skills (DfES).

Established in 2002, the fund has allocated more than £1m to projects across the county.

It provides annual grants of between £250 and £7,000 to charities offering services to needy children.

The youngsters must be from poorer neighbourhoods, rural areas without services, or have mental or physical disabilities.

Applicants must also be new charities, or established good causes that are launching a new programme. No cash is available to support existing services.

Bernice Heller, LNF grant administrator for Hampshire, said: "A lot of these groups just want money to keep on doing what they're doing, and that's the biggest barrier."

She added that in addition to the £550,000 it is to allocate before March 31st, it was expecting a further £800,000 in April, which must be distributed within 12 months.

A DfES spokesman said it was unusual for LNFs not to spend all its money.

He added that any surplus cash is reclaimed by Westminster and given to other organisations that are short of money.

To make matters worse, if the Hampshire LNF fails to allocate its cash, it may not receive all of the £800,000 anticipated next year, the spokesman said.

Mrs Heller hopes that such a situation can be avoided.

"What we want to do is safeguard the Hampshire money by getting it allocated."

Some cash is getting through. Earlier this month, £7,000 was given to the Bishop's Waltham Deanery to support a 'battle of the bands' competition.

The LNF has also given £6,000 to the Hampshire Special Needs Rugby Programme. The organisation teaches alternative versions of the game to pupils at special schools, including Osborne School in Winchester.

Matt Harvey, chairman of the programme, said the money would be used to employ extra coaching staff.

Despite the recent grants, some good causes are still missing out.

Jane Tabor, fund-raising manager at the Naomi House children's hospice in Sutton Scotney, said the charity was unaware of the LNF.

"We're talking to them again now, and hopefully, we might get something," she said.

The story is the same at the Dragonfly service at Winchester's Royal Hampshire County Hospital.

Supported by National Lottery cash, the organisation provides medical care to youngsters with severe illnesses, and emotional support to them and their families.

A spokesman for Dragonfly said it had not heard about the LNF, but would now consider submitting a bid.

Charities interested in applying for an LNF grant should call 0845 113 0161.