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A charity helping more than 80 vulnerable adults live independently across Cornwall and Devon is closing, which could leave many of its clients homeless, bosses have said.

The Hollywell Housing Trust, which supports adults with autism and learning disabilities, said Plymouth City Council's reclassification of what benefits it was entitled to meant it was facing a funding shortfall.

It said it had been able to apply for an exemption to the housing benefit cap, but the council had decided the exemption no longer applied, meaning it had not enough money to cover rents.

The council said it had not removed any cap and it was working to support residents.

The trust, which has it offices in Exeter and supports 82 tenants, does not provide care, but works with service providers "to ensure that our tenants get all-round support for their care and their housing".

It said it had seen tenants thrive over the last seven years but the council's housing benefit department made the "decision to re-classify Hollywell as housing provider" in September.

It said the council claimed "that we were unable to evidence the work that we were doing in supporting our tenants".

Trust chief executive Katie Sherjan said staff had "provided reams and reams of evidence ... All of a sudden it's not enough", even though the "rules around housing benefit, haven't changed at all". 

She said: "What we can't do is wait for the money not to arrive and then close. 

"We need to make plans on the basis that Plymouth has cut that payment."

The council said it had not reduced payments to existing trust tenants, or removed any exemption cap.

It said it would be working with its partners as an absolute priority to support residents with their housing needs.