KENT Reliance Building Society is getting rid of its loss-making branches by hiving them off to local agents.

In a shock move that will see some 70 staff switched to new employers, it is unveiling a transfer deal that will move day-to-day responsibility to a network of agencies across the county.

The decision will affect branches in Maidstone, Chatham, Canterbury, Gillingham, Hempstead Valley, Gravesend, Walderslade, Herne Bay, Rainham, Strood and Whitstable. The Ashford branch was hived off some time ago.

The Chatham-based mutual says it has been losing around half a million pounds a year on its 11-strong branch network. It claims that most customers never step into a branch and says it is unfair for the majority to subsidise the minority who do.

The decision, which follows a detailed two-year review and is still subject to final approval by the Financial Services Authority, will come as a relief to branch users who feared that the society might close the outlets altogether.

This was the strategy adopted by Bristol and West, which recently shut two of its three Kent outlets - in Maidstone and Ashford - leaving only Tunbridge Wells open.

But Kent Reliance members will worry about the style of service offered by the agents and the long-term future of the branches under new management.

Some agents will want to move them into different offices, especially where existing branches are in the “wrong” place, are too small or need a costly facelift.

Staff will be offered formal transfer arrangements under the so-called TUPE scheme that protects their rights. Most are expected to stay put.

However, some may opt for redundancy and a few may apply for jobs at the society’s headquarters in Sun Pier, Chatham. Trade unions representatives have been involved in talks about the deal.

Mike Lazenby, the chief executive, said: “This is probably the biggest thing we’ve done since the merger of the Herne Bay building society and Chatham Reliance in 1986.

“It’s good news for us, it’s good news for members who use the branches, it’s good news for people who don’t and it’s good news for staff.

“The current arrangements just do not work, it’s not viable. We have a policy that we don’t make one member cross-subsidise another and because only a very small number of members use the branch network, we don’t think it’s fair for those that don’t to subsidise those that do.

“So what we’ve been doing is looking at ways of stopping this cross-subsidisation and at the same time find a way to stay in the high street. So what we’re doing is franchising the whole branch network which will involve transferring all the existing staff and premises to agencies.”

He said that under the new arrangement customers using the branches would have access to a wider range of services and advice.

Agencies will enter into a three-year deal. Mr Lazenby said the society has found agents to take over all branches, except the one in Hempstead Valley.

The agents would be expected to provide a high level of service, otherwise they would be stripped of the right to run the branch.