After school last Wednesday, a crackle of anxiety ran through the children gathered outside the Bollo youth club in south Acton. Gang members from Tottenham, 15 miles across the capital, had been spotted in the area. They had a violent rivalry with a local gang, so posed a threat. Part-excited, part-scared, the Acton kids weighed up how to react. One boy wanted to chase and hopped over a wall ready to go. There was nervous chatter about who recognised whom. It was easy to see how within seconds the two rival groups could miscalculate and career towards confrontation. Then one of them poured cold water on the hotter heads by reminding them they were unarmed.

The reason they were unarmed matters right now as politicians, police and worried parents clutch for answers to the UK’s rising knife crisis. It was because they were at the youth club – whose users include gang members and drug dealers – which has a strict rule banning knives and any other weapons.

So the hot heads went back inside to the pool and table tennis tables, where a girl honed a promising singing voice and a lad in school uniform tried to compose music on a computer. A potential knifing had been averted.

The argument that youth clubs are an antidote to antisocial behaviour and crime can seem tired, pious almost. Cynics don’t believe that milling around a pool table in an echoey hall could help anything. But they are wrong.

Since the killings of the 17-year-olds Youssef Ghaleb Makki near Altrincham, and Jodie Chesney in Romford earlier this month, many of the ideas about how to stem the bloodshed have centred on increasing police numbers and more stop-and-search. But a longer-term plan is needed and the fortunes of the Bollo, and the country’s other youth clubs, show us why.

Rising knife crime coincides with deep cuts to the UK’s youth facilities, which have been shredded by austerity: 760 youth clubs have closed since 2012 and 4,500 youth worker jobs have been lost, according to analysis by Unison. Since 2010, English councils have slashed 62% from their spending on youth services – more than £700m. Havering, where Chesney was knifed in the back on a park bench, cut its youth service budget from £1.1m in 2012 to £350,000 by 2017, while over the same period Ealing, which funds the Bollo, lost £844,000 from its £1.4m fund.

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The Bollo has not been unscathed. The incident with the Tottenham gang happened on its first afternoon in new premises after a centre twice the size was closed to make way for a housing regeneration project: 3,300 apartments are being squeezed on to sites vacated by the demolition of a 1,860-home council estate. A large stand-alone club, with enough room for football goals and a big crash mat as well as a music studio and a large room for quiet discussion, has been crammed into a series of rooms at the bottom of a new block of flats.

The shrinking facility is a concern because the Bollo offers users much more than just a ban on knives. It provides space – to move and to think – which is in short supply in often unstable young lives. It provides a home away from often overcrowded and chaotic households (some users live eight people to a two-bedroom flat, others are homeless); a place to confide in youth workers about problems; a place to toy with who they want to grow up to be and think about how to cope with racism and class tensions. It is also a place to step away from a byzantine gang landscape that Colin Brent, the youth worker who runs the club, describes as like Game of Thrones.

“A lot of the gang stuff now happens in a world that is seemingly completely detached from the world a lot of us live in, with its own realities,” Brent said. “If you take away the youth clubs, you take away those places where people can touch base with someone else. You are just leaving them to work it out for themselves with all of the pressures they have on them.”

Those children have been set adrift by myriad social problems: housing shortages, rising school expulsions and racial tensions. The Bollo and youth clubs like it have shown themselves capable of picking up the pieces. “Primarily, young people just need a space to be young,” said Brent. “They need a space where they can play and where they can relax.”

They need it more now than ever. Ministers need to decide if £800m to return annual funding for youth services to pre-austerity levels is worth it. With the bloodshed showing no sign of stopping, the answer seems clear: yes.

• Robert Booth is the Guardian’s social affairs correspondent