The Salvation Army says it has effectively suffered a $150,000 funding cut from Government for its emergency housing shelter forcing it to lay off staff and close the kitchen.

The new Employment Act, which means staff have to be paid overtime after working more than 40 hours a week, has added to the staff bill.

Salvation Army Commander Major Lindsay Rowe said the organisation told Government it would need an extra $150,000 for staff because of the Act. But the Ministry of Health, which gives the grant, froze it at $420,000, leading to the cutbacks, he said.

The shelter on Marsh Lane, Pembroke, has been forced to close its kitchen and cut back on security staff ? leading to complaints that drug dealing is rife.

?Funding has been frozen for several years but what happened with the introduction of the Employment Act 2002 was we were faced with additional costs of $150,000 to retain staff,? Maj. Rowe told yesterday.

?Because funds were frozen, we had no recourse but to make changes at the emergency housing complex.

?We have stopped food services, closed the kitchen and terminated kitchen staff, and cut back on security staff.

?This has left us vulnerable to accusations from the community that drugs were penetrating the place, but when you don?t have the money, you can?t hire the security.

?It is not a good arrangement because we don?t have enough security on site.

?Yes, we did tell them (Government) that we budgeted for the increase, but the grant stayed the same, and because of that, we had to find other ways of operating the facility. We are managing it creatively, if not effectively.?

?We were disappointed because it negatively affected what we wanted to do with housing because we are committed to more than housing people, we want to address issues that brought about homelessness in the first place.?

Maj. Rowe said clients now had to go to the Hamilton Citadel in nearby North Street five nights a week for their evening meal, and to the Seventh Day Adventists for two nights a week.

There is now one night supervisor for the women?s dormitory and one for the other three dormitories, which is inadequate, he said. Health Minister Patrice Minors said earlier this year that the Salvation Army may lose the contract to run the emergency housing shelter.

Maj. Rowe said yesterday: ?We?ve not heard anything further on that. We?ve recently been told our grant for this quarter (from April 1) stays the same. We are pleased there are no further cuts, but we have to be creative.?

Mrs. Minors was off the Island yesterday and Acting Health Minister Michael Scott did not return calls seeking comment.

Housing Minister Ashfield DeVent said: ?This highlights the critical stage we are at with regards to housing.

?We need to move in a direction through cross-ministries, where those people who are homeless, we can find out why they are homeless.

?With Government?s new social agenda and he direction we are moving in, we are beginning to totally assess some of the issues of homelessness.?