THE so-called Northern Rock ‘bad bank’ is to shut its office in Newcastle where 700 staff are currently based, it was announced yesterday.

The Government-owned company UK Asset Resolution Limited (UKAR) that also manages the mortgage books of the now defunct Bradford & Bingley, plans to move staff out of the building in Gosforth it shares with Northern Rock by mid-2013.

UKAR also has offices at Doxford Park in Sunderland and Crossflatts at Bingley in Yorkshire, where the rest of its 1,700 staff are based.

Most of the Gosforth workers will be offered the chance to move to Doxford Park although some of the roles will be shifted to Yorkshire.

UKAR chief executive Richard Banks said last night: “It’s been quite a difficult day so far. Our people have been taking the news with a great deal of fortitude.

“Because the business is reducing by 25% – some of the mortgages of UKAR will be up by the end of 2013 – we are going to need fewer sites. We want to encourage as many colleagues as possible to go to Doxford. We’ve got room in both the other locations for people who want to move.

“Inevitability, people’s personal circumstances over the next 18 months are going to see a reduction in numbers.”

He said it was impossible to say at this stage how people would be made redundant as a result of the move.

“It’s very, very difficult to be precise about staff numbers,” said Mr Banks. “It’s very difficult to say this equates as x-amount of job losses at some point in the future.”

He pledged that UKAR would provide a travel, relocation and disruption allowance for staff prepared to work in the Sunderland office, which is 18 miles from Gosforth, or to move to Crossflatts.

“We don’t want to lose some very highly skilled people who are working in very difficult circumstances,” he said.

“We have a very good loyal workforce which is eminently employable.”