HINDMARSH Shire Council will lobby the State Government to reassess its application for Engage funding.
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Council chief executive Tony Doyle said since 2006, the State Government granted council $150,000 every three years towards developing programs for young people in the shire.
Council's application for funding for 2015 to 2017 was rejected.
Mr Doyle expressed his disappointment about the decision at last week's council meeting at Rainbow.
He said the State Government had made a mistake and that he was particularly frustrated by the decision to award the funding to many urban councils.
"At those urban councils, if they don't get the funding there are many other organisations to pick up the slack and provide programs for young people," he said.
"In Hindmarsh, if we don't support youth there is no one else who can do it.
"For three years our youth will be in a void because we can't re-apply for the grant again."
Mr Doyle said Engage funding went towards employing an early years officer to run programs to support youth.
He said council would retain its early years officer, but said it would be virtually impossible to undertake any meaningful activities without the money.
"We try to engage youth by running programs with them to ensure they aren't marginalised in our community," he said.
"It hits our shire particularly hard because a number of people here are from a disadvantaged socio-economic background.
"It is our first priority after the election - we cannot spend three years with no support for our shire.
"We've made that point strongly to the current government and we will continue to advocate for funding after the election is over."
At the meeting, a deputation of students from Rainbow Primary School and Rainbow Secondary College told council there were not many activities available in the municipality during the school holidays.