HUNDREDS of employees of a Government agency with two offices in the region are being invited to apply for voluntary redundancy.

The Rural Payments Agency (RPA), which processes subsidies to farmers and has offices in Northallerton, North Yorkshire, and Newcastle, needs to shed staff to cut costs.

But the agency has refuted the suggestion that any cuts would amount to a fifth of its workforce over the next two years, about 700 jobs.

While bosses have refused to rule out compulsory redundancies, letters have been sent to staff seeking volunteers for redundancy.

The RPA, which is part of the Department for the Environment, Food and Rural Affairs (Defra), employs more than 3,300 people at its six sites across the country, and has faced accusations of missed and inaccurate payments in recent years.

A total of 389 full-time staff work at its site in Crosby Road, Northallerton.

Farming Minister Jim Paice, who is in charge of the voluntary redundancy process, has pledged to reform the agency, making it more cost-effective and efficient.

The agency has stressed that the process is in the very early stages, with no decisions yet made on individual members of staff.

An RPA spokesman said: “As part of the Defra network, RPA is working to identify how budget savings will be made and has asked for expressions of interest in a department- wide voluntary redundancy.

“Any staff reductions that do take place will be initially through natural wastage and voluntary departures, with compulsory redundancies only as a last resort, as RPA remains fully committed to delivering its three key priorities of high levels of customer service, effectiveness and efficiency.”

No one at the agency’s Northallerton office was prepared to comment on the prospect of voluntary redundancy yesterday.

Defra is facing some of the most severe cutbacks of all Government departments, with about £1bn to be cut from its spending over the next four years.

The RPA, which also has offices in Exeter, Reading, Workington and Carlisle, has seen a series of reports point to its failure to adequately deliver the payments of farm subsidies. However, the latest set of Government statistics showed that the agency was starting to meet its targets.