A financial crisis is theatening the Scrine Foundation charity for the homeless in Canterbury.

More than 100 people living in properties managed by the charity could be forced back onto the streets and nearly 70 full and part-time staff could lose their jobs.

It follows a decision by the city council’s housing benefits office to drastically cut payments to the charity’s clients.

The money is a vital income stream for Scrine, which rents 23 properties from commercial landlords around the city and owns a 20-bed shelter at Palmer House in Station Road East.

But the level of rent charged by the charity – up to £310 a week – has been investigated by the city council’s housing benefit office, which says it is excessive.

It now intends to impose the flat rate of housing allowance for a single person of £65.77 a week from next week.

James Walker, chairman of the trustees for the Scrine Foundation, described the charity’s situation as “catastrophic” and warned it could close its doors within a week.

He said: “The revenue from our clients’ housing benefit is our main income stream.

“We don’t have any other liquid assets. We are taking legal advice to see if we can extend the deadline because we were given just 14 days’ notice of this decision.”

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The investigation into housing benefits claimed by clients of the Scrine Foundation was launched by the city council’s benefits office two years ago, after the charity significantly increased the rents it charged to people living in its managed properties.

In some cases they rose by nearly 90 per cent – for example at Palmer House where the cost of a bed went up from £152 to £287 a week.

Head of revenues and benefits at the city council, Andrew Stevens, said: “We have a legal duty to ensure that housing benefit is being paid correctly based on the circumstances of each case.

“The very substantial rise in the rents charged, along with relevant and emerging case law similar to the Scrine properties meant we had to carefully consider the circumstances of housing benefit claims at these properties.”

It has resulted in the benefit for all clients being recalculated to £65.77 which is the standard local housing allowance for a single person.

•For full story, see this week’s Kentish Gazette