HOMELESS charity GEAR will close in February, when changes to the way services are provided in Gloucestershire will come into force.
Although the number of beds available for rough sleepers will be slashed from 21 to eight, it is hoped new service provider P3 will place more focus on getting people out of the homelessness cycle.
But Anthony Hoffman, chairman of GEAR (Gloucester Emergency Accommodation Resource) trustees said lives will be lost due to reduced beds.
"The latest figures suggest homelessness will get worse and the need will be much greater," he said.
Homeless services are to be spread across the county, with an emphasis placed on returning people to their communities rather than people travelling to Gloucester for help.
Paul Mclain from the supporting people partnership board at Gloucestershire County Council said the changes will tackle the causes of the issue.
"A large number of people staying at the night shelter have been there over and over again," he said. "We have to get these people off the dreadful downward spiral, and get them into safe, stable accommodation."
New provider P3 was voted UK Charity of the Year after running a similar successful service in the West Midlands and will provide two principle sites in Cheltenham and Gloucester with an attached day service.
Mark Simms, from the charity, said it is vital homeless people are given the support they need to get back to their home communities.
"We don't want to create a focus on one site or have people migrating to Gloucester," he said. "We want to support people where they are and get them back with their families so it is easier for them to remove themselves from homelessness. Hostels are a very short term solution. It is about working with individuals and show they can have a stable lifestyle and move away from drugs an alcohol."