A SOCIAL housing provider will sacrifice its Rolls-Royce quality for a Robin Reliant service under major redundancy plans, a union has warned.

Gentoo says it is being forced to shed staff as it fights Government cuts to rents and welfare reforms.

The Wearside firm, which has offices in Sunderland, Houghton-le-Spring and Washington, says it needs to save more than £70m over four years after being rocked by Chancellor George Osborne’s summer Budget.

Workers found out about the plans in meetings yesterday (Wednesday, August 26), though the firm says no decision has been made on how many of its workforce, which stands at about 1,700, will face redundancy.

However, The Northern Echo understands the proposals could affect up to 600 people.

Peter Walls, Gentoo chief executive, said it faces a tough future, and unions said they fear its changes will dilute operations, such as repairs, to the detriment of staff and tenants.

Mr Walls said: “The Budget announced reductions in social housing rents and other welfare reforms and we are analysing the implications of this on our business.

“Unfortunately, current estimates show we will need to make savings in the region of £18m per year, over four years.

“It is with great regret a significant proportion of these savings will need to come from our employee costs, and this will inevitably result in staff redundancies.  

“Being a responsible business is important to us and our staff are the heart of the group. 

“We really value our workforce and their input and as such want to inform and involve them in this process as early as possible. 

“We are working through what the extent of this looks like and over what timeframe.”

Mr Walls said the company has until October 30 to submit a business plan to the Government’s Homes and Communities Agency, which will outline its intentions.

He added it would now work with staff and union officials to find a suitable resolution.

Reacting to the announcement, Mike Routledge, regional officer at the Unite union, said the news was distressing for staff.

He added: “If they can’t find a way through this, it would be like Gentoo’s Rolls-Royce service being downgraded to a Robin Reliant.

“This is very worrying for the people of Sunderland.

“It will have a big impact on the city too, because out of the people who work for Gentoo, the vast majority live in Sunderland and spend their money there.”

Gentoo offers properties to buy and rent across the region, and previously rescued North-East glass maker Romag.

Based near Consett, County Durham, Romag has an agreement to supply Hitachi Rail Europe with glass for its trains, which it will make at a plant in Newton Aycliffe, also in County Durham.