More than three hundred civil service jobs are to be axed in York - less than two years after they were created.

The York Pensions Centre at Monks Cross, which only opened in September, 2002, is closing as part of an efficiency drive within the Department of Work and Pensions (DWP).

Work and Pensions Secretary Andrew Smith said staff would be offered other jobs or voluntary redundancy, but warned of compulsory redundancy "as a last resort".

He said the department would be actively seeking interest from the private sector and elsewhere in Government, taking into account the planned relocation of civil service work from London and the South East.

Mr Smith said the DWP had been handed millions of pounds for modernisation, meaning it had to axe 30,000 jobs by 2008.

He said the announcement would no doubt be "unsettling" for staff in York, who had played an enormously important part in establishing the pension Service in the minds of pensioners across the country, and in delivering the first service specifically dedicated to meet their needs.

"This is something they can be proud of and I thank them for their hard work and commitment," he said, adding that consultations with the trade unions had already begun.

Today's news comes in the wake of more than 150 redundancies at Norwich Union Life in York, and in excess of 300 at Terry's chocolate factory, bringing the total number of job losses in York this year to more than 850.

The Public and Commercial Services Union (PCS) claimed that pensioners and some of the most vulnerable in society would suffer as services were slashed and backlogs developed in pension credit and benefit processing.

"To think you can arbitrarily slash thousands of essential jobs without any adverse impact on the delivery of services is the height of naivety," said general secretary Mark Serwotka.

"These cuts will impact on every community, damaging local economies, putting hard-working public servants on the dole."

He called on the Government to think again - otherwise the union would "consider all options".

Ryedale MP John Greenway said he understood some of the pension centre staff had moved specifically to York to work there. "It's a tragedy for the York workforce," he said.

"They only moved there a couple of years ago. It's incredible that it's already shutting down. It's very bad news."

But he said there were two glimmers of hope. Firstly, more civil service jobs were set to move out to the provinces from the south-east, some of which could come to York, and secondly, there would be offices at Monks Cross where such civil servants could be located.

York MP Hugh Bayley said it was a "time for joined-up Government", arguing that the DWP should speak to the other departments, Defra and the MoD, which had announced they were considering moving jobs to York, to see if they could provide alternative employment.

City of York Council leader Steve Galloway said the news was not only very disappointing, but also unexpected. He said the expectation had been for more Government jobs to come to York.

Anger and sadness at news

PENSIONS Agency workers today reacted with shock and anger at the news that their jobs were being axed.

Paul Rambridge, 19, from Strensall, joined the department three months ago to work in the storage team. He said morale was very low today. "They told me when I first joined that my job would be OK. A lot of people are talking about leaving, it's very disappointing. The people who have been there the longest are most upset."

Tony Troll, whose wife and daughter work at the offices, said they were told that their jobs were going at a meeting this morning, with the offices to shut by March next year.

He said he understood that eight out of ten staff would be offered relocation.

"It was an incredible shock," he said. "The whole thing has been an absolute waste of money. It has only really been open a year."

Speaking about the atmosphere in the building, one worker said: "Some of the girls are crying."

A 23-year-old female employee said: "People are really angry about it. "

Updated: 14:36 Tuesday, June 29, 2004