THE Salvation Army is warning that its North-East centres for the homeless could close unless it can raise £5m in donations.

The organisation is to launch a national fundraising appeal on Saturday, to head off the threat to its services across the country, including hostels for the homeless, as well as homes for people with substance abuse problems.

It also operates a well-used family tracing service, counselling services and almost 900 local church and community centres.

In the North-East, there are 266 places for homeless people at four centres, two in Newcastle, along with one each in Sunderland and Darlington.

But the cost of upgrading its facilities - often to meet new legislation - is rising and the organisation is increasingly having to rely on the public's generosity to keep pace.

The organisation commissioned a report, The Paradox of Prosperity, which warns that social problems are likely to worsen in the coming years.

The Salvation Army's public relations director, Geoff Platt, said: "Our current centres and programmes in Newcastle, Sunderland and Darlington and Teesside cannot meet the needs that we highlighted in our report, The Paradox of Prosperity.

"There is a strategic plan for our social service centres, but the continuing and growing deficit certainly hinders new developments to meet today's needs, and could put existing services that are marginal at risk."

He added: "We get a lot of support from the public. If it wasn't for the public, we couldn't run these schemes."

Commissioner Alex Hughes, leader of The Salvation Army's UK territory, said yesterday: "There is minimal funding available for resettlement and after-care for the homeless.

"While there is a major purge by the Government to get people off the streets, there is not enough assistance to ensure they stay off them. We could be back to the levels of social deprivation seen in the 1950s.

"If we cannot increase our funding, either from Government sources or from public donations in the near future, many people who depend on the army for social care and rehabilitation into the community will simply fall through the net.

"We cannot allow this to happen.