Recent bed closures and growth in demand from children as young as 12 have led to wait times for programs provided by the not-for-profit Ted Noffs Foundation blowing out to more than two months, leaving drug users at risk in the community.

Last month Fairfax Media reported that 60 per cent of community organisations said waiting times had risen in the past year and 16 per cent of people seeking help were turned away.

Noffs Foundation ACT manager Ronan O'Connor said an increase in federal government funding would save lives and reduce the burden on the criminal justice and health systems.

''The cost of the three-month treatment program with high levels of supervision is around $40,000 but it costs $220,000 to keep someone in lock-up for a year,'' he said.

''We can do this work very effectively because children and young people deserve the option to be treated and to find a healthy place in their community.

''Given the experiences they have gone through, they have a lot of wisdom under their belt and a lot to contribute.''

Funding cuts to the organisation meant four beds in a 14-person centre at Watson closed.

The program's holistic approach addresses employment, training, relationships and relapse-prevention skills.

Mr O'Connor said young people self-refer to the centre, which covers the ACT and parts of New South Wales, and which also received clients from the court system, health providers and other agencies.

''It does mean we are ending up with a significant backlog. Two months is too long to ask young people to wait, particularly if they are in crisis,'' he said.

One participant in the Noffs program, who asked to be known as Steve, said he first used drugs at 12 years of age.

''I started off using drugs in Quenbeyan, walking around and really doing crime and that, and then they said I could come here,'' he said. ''There were no beds available because of the people already in, so it took me a couple of months but now everything is looking out well.''

Steve said he had used cannabis, ice and speed and that other vulnerable young people would suffer from uncertainty and increasing waiting times.

''It was pretty hard to wait because I was using pretty heavily. When I got a call and they said I was accepted and should come in tomorrow, I packed up my stuff and got settled in.''

After three weeks in the program, Steve said he hoped to find a part-time job and stay off drugs permanently.

A spokesman for the Department of Health and Ageing said a three-year agreement with the Ted Noffs Foundation was in place until June 2015, and funded by $900,000 each year for the youth residential rehabilitation service and another program.

''This is consistent with the funding provided to comparable services across the country, and reflects the need to give all organisations in this field a fair share,'' the spokesman said.

The federal government has initiated a review of the alcohol and other drugs prevention and treatment services sector, to be conducted by the Drug Policy Modelling Program Unit at the University of NSW.

The review is expected to inform government funding of drug- and alcohol-treatment services.