HARD-UP Cleveland Police have warned they must cut jobs and slash recruitment to avoid financial disaster.

Every police and civilian worker was this week issued with a statement on the force's financial situation.

Officials, already grappling with a £7.3m 'black hole', said they face a separate shortfall of between £5m and £7m in the 2005-06 budget.

They are hoping some civilian staff may take early retirement or voluntary redundancy but compulsory redundancies for civilian staff were not ruled out. The intake of new police officers would be slowed down.

Cleveland Police were criticised for a 'spend, spend, spend' culture in a report by the Audit Commission earlier this year. It was investigating the £7.3m deficit which came to light in February.

But the force and its police authority blame the new, separate crisis on the increase in pension costs for retired officers. A £3.5m increase is expected in the next financial year followed by further increases of £1.9m in 2006-07 and £1.5m in 2007-08.

Chief Constable Sean Price said there would be no reduction in front-line policing. He said: "As Cleveland Police was established in 1974 an unusual number of officers will retire after serving their 30 years this year. The problem is exacerbated by a decision made in 1964 not to establish a pension investment fund."