THE Salvation Army is facing a massive £9.6million hole in its annual budget.

The crisis means that the Salvation Army in the South has been forced to find savings of 30 per cent to balance the books by the end of its financial year.

The news comes on the eve of the Salvation Army's annual door-to-door appeal for funds.

The Daily Echo can reveal that every commanding officer in the region has been sent a letter from Territorial Headquarters outlining the disastrous news and has been warned not to talk publicly about it.

Captain Philip Mountain, commanding officer of Poole Salvation Army said: "I was stunned to receive the letter.

"I think all churches have cash flow problems from time to time, but we've been asked not to say anything to the press."

The Salvation Army's Southern Division commander, Major Ian Barr, who oversees work from Devon across to Kent, has been instructed to make 30 per cent cut backs in expenditure between now and the end of March 2005 in an attempt to relieve the strain on the Army's reserves.

Major Ian Barr told the Echo: "As we speak I'm sat down looking at my own budget, and seeing where savings can be made.

"I have to cut back by 30 per cent, although I want to stress this will be in the area of administration and not front line services.

"I cannot say at this stage where the savings will be made as I have not discussed my ideas with affected staff, although it has to be said that many of our building projects in corps - helping the community - will have to be delayed, such as those in Southampton and on the Isle of Wight."

Major Barr said the public should still have confidence in the way the Army manages funds.

The Salvation Army is hoping to raise £3million through its annual door-to-door appeal which runs until October 3.

First published: Sept 18