Two housing associations based in East Lancashire - Prospect Homes Group, which runs Twin Valley Homes, and Housing Pendle -will merge forces with TransPennine Housing and the Chevin Housing Group next April 2011 saving £5 million in efficiency savings.

Bosses have reassured Prospect Homes’ 550 staff, based in Blackburn and Colne, saying the merger would not result in any compulsory redundancies and the group's 12,000 tenants in East Lancashire have been told their services will continue to run as normal.

David Clegg, who chairs Housing Pendle and also sits on the Prospect Homes board, said: “It has already been decided at board level that there will be no job losses in the organisation. I am pretty sure that if that had been the case, it would have been a deal breaker among the four housing associations.Our commitment is clear: there will be no job losses and service will not be affected.”

The new group will manage 35,000 homes and 50,000 properties across East Lancashire and Yorkshire and employ 1,250 staff.