The Foyle MLA was commenting after a number of community organisations warned that they were facing significant reductions.
She said: “Executive departments have a statutory duty to address poverty and disadvantage and to target resources at objective need.
“It is therefore unacceptable that the Department of Communities (DFC) are proposing deep cuts to Neighbourhood Renewal Programmes.
“In 2008/09 the Neighbourhood Renewal Budget was £24/25 million today its around £18 million, this is something that I had raised at a meeting with DFC Permanent Secretary and Senior DFC staff in December and requested that they need to look at investment in this budget.
“If these cuts go through it will be devastating to many frontline groups as this funding helps bring in other programme and revenue funding.
“Neighbourhood Renewal programmes have had a significant impact on regeneration, improving educational attainment and assisting residents in the most deprived areas to access employment.
These actions are core to eradicating poverty and disadvantage,” she added.