Homelessness charities facing funding cuts and increased demand have a new fund to draw on, designed to help them adjust to a tough financial environment and “make difficult decisions about their future”.

The Homelessness Transition Fund has already made eight grants from its new ‘Future Ready’ fund, which offers grants of £5,000 to £25,000 to charities working with homeless people.

The new fund is focused on financing work to help the organisations attract new funding or deal with funding cuts. It will provide grants for charities to form partnerships with other organisations, “test new approaches that will attract funding”, change their ways of working and “make difficult decisions about their future”.

The fund is in response to rising homelessness rates – at its highest level since 2008 – and budget cuts, which in 2011 were felt by three out of every five homelessness projects.

The Homelessness Transition Fund, administered by Homeless Link, was set up last year in response to the government’s plan to end rough sleeping in the UK and has since distributed £11.6m.