The Department of Health has launched a £10m fund for projects that support homeless people once they have been released from hospital in a bid to reduce readmissions.

Voluntary organisations have until 8 July to apply for grants from the Homeless Hospital Discharge Fund. Grants will be made to successful applicants in August.

To apply organisations must provide services to homeless people, or those at risk of become homeless, spend more than 50 per cent of their income on homeless people and have approved annual accounts no more than 12 months old. Funding is only available for the 2013/14 financial year and applicants are expected to explain how the project will be sustainable beyond that.

Announcing the funding, public health minister Anna Soubry said: “Homeless people are too often discharged back onto the street without their problems being properly addressed. This is damaging to their health and increases NHS costs through ‘revolving door’ admissions.”

The announcement was welcomed by homelessness charities Homeless Link and St Mungo’s, who the Department of Health commissioned last year to carry out research into improving hospital care for homeless people.