When Eileen Leyland, 20, gave birth to a daughter three years ago, she had no idea what to do. Declared homeless by her midwife, her child was taken into foster care. It was only, she says, when she was moved into supported housing for young mothers, run by a social welfare charity, that she was able to learn the skills she needed to raise her child.

Ms Leyland and Tiegan have now been reunited. But the centres run by Caritas – the charity that supported her for two years and provides 24-hour care for dozens of women like her – are all but doomed. Its Bolton unit, where Ms Leyland went, lost all of its local authority funding last year. It had to close temporarily, and another, in Manchester, has shut for good.

This is not an isolated case. Analysis to be published in the Lords tomorrow warns that children and young people's charities in England face disproportionate public funding cuts over the next five years. While the voluntary sector as a whole expects funding in 2016 to be some 7.7 per cent down on last year's level, young people's charities expect to lose 8.2 per cent. Over the next five years, they expect to lose more than £400m.

Ms Leyland was lucky, but experts warn that she is just one among a generation of young people who will be hit hardest in austerity Britain. "The report shows children and young people will be disproportionately hit," says Stuart Etherington, chief executive of the National Council for Voluntary Organisations (NCVO). "This will reduce the opportunities they have. There is already high youth unemployment; we are in danger of losing a generation. They won't have jobs, youth services, or anywhere to go. It could be catastrophic."

More than 34,000 charities in England work primarily with children and young people, a quarter of the entire voluntary sector. They secure an income of an estimated £3bn per year. But these organisations – which run services from day care and youth clubs to crime prevention programmes – face a funding cut of almost £129m in 2016 based on their funding in 2011, according to the National Children's Bureau (NCB).

The bureau believes this is a "cautious estimate", assuming that the proportion of statutory funds to children's charities remains the same over the next five years – 0.2 per cent of central government spending and 0.9 per cent of spending by local government.

Baroness Claire Tyler, chair of the Children and Family Court Advisory and Support Service, who is helping to launch the analysis, says: "This report gives us the best estimate of what is to come."

For Ms Leyland, who now takes care of Tiegan in their own home, the help she received after childbirth meant "everything, really".

"I learnt loads of things," she says. "I didn't know anything about looking after a baby – they taught me how. I left school at 15, when my mum was ill, but [at the centre] I took lots of courses, and passed maths level 1. If people having kids have nowhere to go, they won't get their children back. It made me a lot more confident – I am looking for a job at the moment."

But charities such as Caritas are more vulnerable to spending cuts than most, the report says. A greater proportion of the income of children's charities comes from the public sector – 52 per cent, compared with 38 per cent for the voluntary sector as a whole. The 37 largest charities account for 36 per cent of the total income, according to the NCB, meaning that people who rely on smaller, more local charities, are most likely to see their lifelines lost.

"These sorts of cuts, when affecting so many small organisations, can be the tipping point between viability and non-viability," says Hilary Emery, chief executive of the NCB. "We are very concerned about the effects on people's lives – we are already seeing it. What we have predicted are the smallest levels of cuts; if this is the minimum, then it is really, really dramatic."

The NCB is calling for the Government to develop a strategy for children's charities. Ms Emery suspects the effect of the cuts on their incomes will be "different across regional and local areas".

About half of government spending on the children's voluntary sector comes from the Department for Education. The bureau estimates cuts will be £10.7m in 2015 compared with 2011 spending; non-school charities, providing early childhood, youth and play services and family support, are likely to "bear the brunt of the cuts".

The Home Office is expected to cut more than £25m on children's services in the same year.

A Department for Education spokesperson says the Government is a "strong supporter" of the voluntary sector, and is investing £120m from 2011 to 2013 in its activities, including £34m to 18 organisations delivering "valuable services and support to young people who need it".

She adds: "We want to see voluntary and community sector organisations take full advantage of the opportunities that are becoming available to them through the opening up of markets, a new payments-by-results environment, and increased access to social finance."

But for Mr Etherington at NCVO, the next few years will undoubtedly see "serious reductions in the levels of services: youth clubs will close, youth workers on the streets won't be as effective, and there will be more people with nowhere to go.

"It's hard to draw a correlation between cuts and riots, but if there is more probability of young people getting bored, the likelihood of them turning to street activity is greater."

Case studies...

Caroline Johnston

A charity researcher, Caroline, 43, lives in Horsham, Sussex, with husband, Colin, and her three boys. Her middle son, Henry, nine, has Down's Syndrome and has been attending Springboard's Grasshopper kids club once a month for four years. Having lost £50,000 of public funding last year – 20 per cent of income – its future services are uncertain

"Henry finds it more difficult to access most things in the community, because he needs extra support. It would be difficult for him to go to a party on his own, but he's got to know and love Grasshoppers, which holds all sorts of activities. It's a regular thing for him, like other kids have Brownies or Scouts.

"He gets support from volunteers who allow him to have a certain independence, build his confidence, and let him play and socialise. He's made friends. It feels like a home from home for him. It would be terrible if he couldn't go any more. It's very important. Life for children is not just about schooling; all the other things are so important, too. It makes you feel part of your community and stops you being trapped in your own home."

Edson Rabole

Edson, 19, joined St Andrew's, Westminster, believed to be the world's oldest youth club, eight years ago when he was 11. Now, he is taking his football coaching qualifications and is training new members, aged nine to 18. Mr Rabole works as a part-time coach at Chelsea FC's foundation and says he dreams of being the country's youngest professional football coach. He says his mentors at St Andrew's, which lost £40,000 in public funding – 10 per cent of its income last year – showed him everything he knows

"It's taught me a lot. I have gained qualifications which I couldn't have afforded on my own. It's definitely kept me out of trouble and I have learnt a lot. I have gained experience that I can put on my CV – if I was to go to a professional club, they would see I have managed before.

"If the club was to lose just one night a week of football, then one team wouldn't be able to play. They might leave and hang around in the street. I've had friends who have come to the club and I can see the big difference between them and the others."

Tania Massey

Tania, a 36-year-old teaching assistant, lives with her husband, Guy, and her two children, aged three and 15, in Nottingham. The family regularly attends Playworks, a charity that supports around 15,000 children in play and youth services. She says the street activities and scrap store, where the family can make crafts together, gives the children a break from a city often marred by poverty. The charity has lost all of its local funding – more than £100,000 – and is facing possible closure

"I come here with my three-year-old, Ben, and it's like an adventure for him. We walk around with a shopping basket and put all the recyclable items, whatever he wants, into a basket. I know it's only going to cost me £2, and we can play creatively and engage with other people.