A £600,000 fund collected through donations from Westminster’s richest residents to tackle homelessness is “just a drop in the ocean” compared with government cuts, a Labour councillor said today.

The leader of Westminster Council’s Labour group Adam Hug welcomed the money, but said it was “dwarfed” by millions of pounds cut from the borough’s rough sleeping contracts in recent years.

“We just need to be honest that it’s a drop in the ocean compared to the scale of the cuts Westminster has faced year on year, with another £36 million in cuts due this year,” he said.

Just 644 homeowners of the 15,800 properties valued more than £320,000 in the Westminster area have contributed to the scheme, equating to just 4 per cent.

Government figures released last month showed that Westminster was the local authority with the largest number of rough sleepers in England.

The total of 306 had risen 41 per cent since the previous year.

Two homeless men have died in the underpass of Westminster station, just steps away from the entrance to Parliament within the space of a year, with the latest death in December.