PLANS to merge services at two councils in North Yorkshire have sparked fears of job cuts.

Councillors are discussing merging the benefit payment and tax collection departments at neighbouring Hambleton and Ryedale district councils.

Paul Hunt, the branch secretary of public service union Unison at the Ryedale authority, said this had led to concern over possible redundancies.

He said: "Staff are involved in discussions through the union.

"This could affect people at both authorities, but as to where the job losses will be, if there are any, we can't yet say.

"Ultimately, it's up to councillors, it's their decision.

"If, having looked at the facts, they go ahead, we will be trying to protect staff and make sure they get the best possible arrangement if they are transferred."

The scheme will be the first of its kind in the country, if it goes ahead.

The aim is to cut costs for the councils by combining the collection of council tax and business rates, as well as the payment of benefits.

Ryedale District Council's chief financial officer, Trevor Teasdale, said: "The proposals haven't been ratified yet.

"It is much too early to say if there will be redundancies here or in Hambleton, both or none."

The proposal has been referred to a working party.

The plan was put forward by the Department of Work and Pensions' Centre of Excellence, which has awarded £685,000 to the project.

Each council will contribute £141,000 to make up the total cost of £967,000.

It will take almost three years for the costs of the scheme to be recovered.

Ryedale councillor Paul Andrews said: "I'm most unhappy about this. We're seeing, for a saving of £161,000, almost £1m being spent and I think the money from the Government is a huge bribe to make us part of a larger authority, which is part of regionalisation, which I thought this council was against."

Fellow Ryedale Councillor Keith Knaggs said: "Most of us are getting just a little uneasy about this."

He urged councillors to "take a fresh look before taking an irrevocable step".