THE controversial One Connect Partnership between Lancashire County Council and BT was scrapped yesterday (THURS).
Former Tory leader of the authority Geoff Driver branded the move ‘madness’.
The Labour adminstration, which took over in May, ended the arrangement he set up in May 2011 at a meeting of the LCC cabinet yesterday.
Services including welfare rights to human resources will return to county hall.
One Connect Limited (OCL), the jointly owned company, will become a wholly-owned BT company called BT Lancashire Services Limited from March 31.
It will focus on information and communication technology, revenue, benefits and payroll services.
Hundreds of staff will return to LCC, with the rest of the 800 remaining with the new BT company.
County leader Jenny Mein said: "I'm pleased the council and BT have come to an agreement that has the interests of Lancashire's residents and taxpayers at its heart.
"There is no doubt BT's expertise in cutting edge technology has been a real benefit.
"The changes allow us to focus on developing that potential while bringing back services and decisions that sit better in the county council's structure."
As the new company will be wholly BT owned, there will be no joint board of directors.
Coun Driver said: "This is madness.
“I am sure everyone will be amazed to see that after accusing the Conservatives of 'outsourcing' council services the Labour administration is actually seconding staff to a company that is wholly-owned by BT. That is more than 'outsourcing'; it is privatisation.
“Labour allowed their political vindictiveness to cost Lancashire council taxpayers millions. They have demonstrated a total disregard for the wellbeing and welfare of their staff. This is madness"
BT executive and OCL chairman Tony Chanmugam said: “We all appreciated when OCL was created a strategic review would take place at around this time.”
Last August LCC chief executive Phil Halsall was suspended over the award of a £5m fleet maintenance contract to OCL, leaving the authority in October.
Payments of more than £500,000 to former OCL chief executive David McElhinney continue to be investigated by police.