For the 130 homeless people who pass through Spires each day, it is the basic things in life that offer much-needed relief: a warm place to rest, some food, a shower and a shave.

Demand for the service for homeless and disadvantaged people in South London is increasing as the financial crisis worsens but the same crisis has led to a significant drop in funding.

Amanda Addo, its director, said yesterday: “I have never had so many no's when I'm making grant applications. There isn't a lessening of goodwill but it's just impossible. We are mostly independently funded. People give grants out of their dividends, and their dividends are disappearing.

“I have less than nine months' funding, we have increased need for our services and I don't know where else to go for the money.”

Spires, in Tooting Bec, provides a daytime drop-in centre for homeless and disadvantaged people, as well as some space at night for rough sleepers. It also offers healthcare clinics, housing and benefits advice, and workshops in literacy and IT skills. At night an outreach service supports female sex workers, making sure they are safe on the street and offering them programmes for drug and alcohol addiction.

The charity, run by 12 staff and more than 80 volunteers, has an annual budget of about £430,000. But Ms Addo said that with less than nine months' funding left, it may have to cut back some of its services in the new year.

“Our biggest cost is personnel and service delivery, and we want to protect both,” she said. “We might have to limit the number of people that we see though, or reduce the caseload of each of our staff. It's a very difficult time.”

Woking and Sam Beare hospices in Surrey look after the terminally ill and those in severe pain (Parminder Bahra and Jill Sherman write). They manage 20 beds in two units. Closure would leave 500 patients without the support of a dedicated team who make their final days bearable. The service also provides 2,000 visits by nursing and consulting teams in the community and bereavement counselling for families.

Chris Flemington, the organisation's chief executive, said that cash-in-hand donations had dropped by 30 per cent, and wills and bequests by 75 per cent.

Mr Flemington met a trustee of the charity this week to agree a process to close the hospices if the economic downturn continues to affect revenues. “When you're dealing with patients who are dying, you can't suddenly pull the plug on them. That would be unforgivable. Either we provide the service or we don't,” he said.

He added that the sharp decline in income from wills and bequests this year was because three of the charity's legacies have involved the sale of housing. One of the properties was on the market in January this year for £325,000. It finally sold for £240,000 — 23 per cent less. Another property was on the market for £310,000 but remains unsold and is now offered at £220,000.

Mr Flemington estimates that the hospices will record a deficit of £300,000 this year and the shortfall will have to be made up by dipping into the charity's reserves: “Our reserve funds could be down to as little as three months, which is dangerously low,” he said.

Mr Flemington has increased service levels where necessary for the benefit of patients and their families - but there is no question of that now. “We have to think very carefully about future plans,” he said.

“The great difficulty for charities in an economic downturn is planning when you don't know what your income is going to be.

“We are planning various campaigns to address the situation, but I don't know how successful they will be.”

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