Some 600 officials could lose their jobs as part of cost-cutting at the Legal Services Commission (LSC), the body which runs the £2 billion legal aid scheme.

The Commission says that the move will deliver better value for money for taxpayers and comes as the Ministry of Justice is having to find savings of nearly £1 billion over three years from across all its services.

But the union which represents staff, the GMB, has given warning that the efficiency drive will lead to the loss of up to 600 jobs from the 1700-strong Legal Services Commission workforce.

In a statement, the LSC said it would transfer work involving processing of claims at eight regional processing centres to its offices in London, Bristol, Liverpool, Nottingham and Jarrow in Tyneside.

At the other locations in Manchester, Chester, Leeds, Birmingham, Cambridge, Cardiff, Brighton and Reading it will retain just a local presence with some local advisers.

The changes are to take effect no earlier than mid-2009. The statement added: "More efficient processes and increased use of electronic working will enable us to provide these services with fewer staff and to deliver better value for money for the taxpayer."

Talks are continuing with unions over the restructuring. The GMB national officer Rehana Azam said: "This is very disappointing news for the Legal Services Commission staff and for people seeking legal aid.

"We will fight a vigorous campaign to minimise the job losses and will seek a meeting with Jack Straw, the Justice Secretary, to discuss these proposed job losses.

"It is essential to ensure that legal aid services to the public are maintained in these times of recession and it is particularly important there are no cutbacks in the services to people facing debts and housing problems."

Des Hudson, chief executive of the Law Society, said: "Without a full understanding of what changes to processes and procedures have been cut, changed or passed to others such as solicitors it is almost impossible to know whether these are sensible efficiencies which make a small but worthwhile reduction in administration costs to the benefit of legal aid funds, or a short term cost cutting measure which will produce a poorer service and/or greater inefficiencies to the system.

"We are therefore concerned not only about the possible impact this could have on the smooth running of the legal aid system and the service the LSC provides to our members in administering legal aid, but more importantly about the effect this will have on our members' clients - those seeking access to justice.

"Is this is yet another example of the government cutting legal aid provision down to the absolute bare bones with the risk that legal aid users as well as providers lose out in the long run? We will be seeking urgent clarification."

Each year, the Commission provides information, advice and legal representation to two million people a year in England and Wales.

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