Recorded homelessness is said to be rising

The money is being given to councils to help cut the numbers in temporary bed and breakfast accommodation.

Housing charity Shelter Cymru welcomed the funding but said more resources were needed, as more than 3,500 people were in temporary accommodation.

The grants, from the Welsh Assembly Government, will be paid to 26 schemes across 19 local authorities.

Social Justice Minister Edwina Hart said the money, worth �959,000 over two years, would help councils focus on providing more suitable accommodation, while also helping to prevent homelessness.

Ms Hart said: "I am concerned that many families and vulnerable young people find themselves staying in bed and breakfast accommodation where they often have no cooking facilities, limited space and no access to communal areas.

Many homeless people are in bed and breakfast accommodation

"Of course, there will be emergencies where using this type of housing is unavoidable but, in general, we should be trying harder to provide more suitable accommodation for the homeless people in our care."

Housing charity Shelter Cymru said homelessness in Wales last year hit record levels, with more than 10,000 people accepted as homeless by local authorities in the last quarter of 2004.

It said more than 3,500 of the 10,000 people were in temporary accommodation. The charity added that 900 of these people were in bed-and-breakfast accommodation and around 200 of these were families with children.

Shelter Cymru Director John Puzey welcomed the money, but said more was needed.

"The grants are something we welcome and support, but we believe there should be more resources," he said.

He said the major worry was the number of people, including children, who were placed in temporary accommodation.

"There should be higher investment in social housing across the board - that is the long-term way we can deal with this problem," Mr Puzey added.

Earlier this month, he said that recorded homelessness was "growing alarmingly across the country".

Howard John, director of the Welsh Federation of Housing Associations, agreed the level of homelessness in Wales was "high enough".