JOB-creation agency One NorthEast admitted last night that streamlining will lead to redundancies within its own organisation.

The regional development agency is expected to make about 20 people redundant, while others will switch jobs within the organisation.

At the same time it is recruiting 18 managerial positions with a combined salary of more than £800,000.

Business leaders said they hoped the restructuring would improve the agency.

Andrew Sugden, head of policy and representation at the North East Chamber of Commerce, said: "If the agency needs to restructure so it is better able to deliver on its strategy and commitment to the region, then that is something we would welcome.

"But there is something of an irony in the regional development agency, which creates jobs, having to lose people.

"However, the jobs environment in the North-East is such that when any of the major employers lose people, you can be relatively confident those people can move on to opportunities elsewhere."

Alan Clarke, chief executive of One NorthEast, said: "The scope of the agency's work has changed quite dramatically in recent years.

"The restructure will unfortunately mean that posts within the agency will become obsolete, and some jobs will be lost.

"Every effort is being made to fit existing employees into new posts to minimise the number of redundancies and ensure their skills and experience are retained in One NorthEast.

"Restructuring is still ongoing and it is not yet clear how many redundancies there will be."

Mr Clarke defended the agency's policy of paying up to £68,000 for the new jobs.

He said: "The salaries we are offering are on a par with some of the salaries in the private sector because the North-East deserves the best and we are determined to recruit the best."

Peter Troy, chairman of the Darlington branch of the Federation of Small Businesses, said the agency's restructuring had come as a surprise to businesses in the region.

"Given the agency's fondness for consultation, it is strange they have not consulted businesses on this," he said.

"While job losses are regrettable, we hope the agency will become more entrepreneurial as a result."