BT is set to take full control of a joint venture providing ICT services for Lancashire County Council, after the public sector body decided to rescind its 40 per cent share in the company.
On Friday, the council announced it would bring a number of services back in house, including welfare rights and human resources, which had previously been run by One Connect Limited (OCL).
But ICT, along with benefits and payroll services will be left with the company, which will be renamed BT Lancashire Services Limited, and owned wholly by the supplier.
Council leader Jennifer Mein said: “There is no doubt BT’s expertise in cutting edge technology has been a real benefit in a number of service areas to date and as a forward-thinking council we’ll continue to need that kind of support and innovation.
“The changes allow us to focus on developing that potential in partnership with BT while bringing back services and decisions that sit better in the county council’s structure.”
Hundreds of county council staff currently seconded to OCL will return to the council, but IT staff will continue existing secondments as part of the newly slimmed-down partnership.
The new arrangements will take effect from 31 March 2014.
Lancashire County Council interim chief executive, Jo Turton said: “Repositioning the partnership with BT will allow us to focus on securing access to BT’s technologies and skills that otherwise wouldn’t be available to a local council.”
To replace the joint board which previously ran One Connect, senior representatives from both organisations will regularly review progress.
Tony Chanmugam, chairman of OCL and BT Group CFO said the move was a “key milestone” in its relationship with the council.
He said: “The environment in which local authorities operate is continually changing. We all appreciated that when OCL was created and it was one reason for agreeing that a strategic review would take place at around this time.”
The decision to insource services from OCL follows a series of controversies surrounding the joint venture.
Last year, the council revealed it had paid OCL chief executive David McElhinney in excess of £600,000 for the financial years 2011/12 and 2012/13.
And in December, a report revealed that there had been a shortfall of £6.6 million in expected procurement savings from using the company over two years to the end of 2013/14.