The National Homelessness Advice Service, which is run jointly by Shelter and the Citizens Advice Bureau, has been told that it must run the service, but with a much reduced budget, according to Inside Housing.
The Communities and Local Government (CLG)department released the bidding prospectus for the National Homelessness Advice Service, offering £3 million for 2015/16.
This equates to a more than three per cent cut to the 2014/15 funding, and nearly a 12 per cent cut over the three years since funding was announced.
At the launch of the service, then housing minister Grant Shapps said the £3.4 million budget was "vital to ensuring that when people ask for help, the practical advice and expertise is there".
The service offers over 200 charities and housing associations support and advice to ensure that they are able to provide all homeless people with the correct and up-to-date information on all issues around homelessness and housing, from rent arrears to challenging evictions.
It also offers free housing training for local authority staff on a range of topics including mortgage debt advice, housing benefit, domestic violence, and young people and homelessness.
There are fears that cuts to the service will impact on thousands of homeless people across the country. Six advisors were also made redundant by the CLG department in March last year.
Homelessness services are already facing a £20 billion shortfall due to reduced government funds, according to the Local Government Association.
A study by homelessness charity Crisis and the Joseph Rowntree Foundation in December showed rough sleeping rose by 13 per cent in London in 2012/13, and blaming the increase on front line service reductions following government cuts.
Last year Homeless Link raised its concerns in its 'Who is Supporting People Now', research report which warned that quality would be eroded, good staff would leave as wages fell, services would be lost and homeless people would suffer.