One Connect Limited is to become a wholly owned BT company renamed as BT Lancashire Services Limited.
Lancashire County Council and the telecommunications giant confirmed sweeping changes to their strategic partnership after a cabinet meeting this afternoon.
The majority of county council services ranging from welfare rights to human resources and including procurement will return to being delivered in-house by the authority.
Meanwhile, BT will continue to be responsible for County Hall’s IT and payroll services, and West Lancashire Council’s revenue and benefits services.
The move means hundreds of county council staff currently seconded to One Connect Limited (OCL) will return to the council, with the remainder continuing their secondments as part of the newly-slimmed down partnership.
Council leader Jennifer Mein said: “I’m pleased the council and BT have come to an agreement that I believe has the interests of Lancashire’s residents and taxpayers at its heart.
“Both organisations have shown great commitment to reviewing operations over the last few months and looking again at how we can best work together for the benefit of Lancashire residents.
“There is no doubt BT’s experience 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.”
The new arrangements will take effect from March 31 this year.
As the company will be wholly owned by BT, the partnership’s governance arrangements will no longer involve a joint board of directors.
Instead, the council said senior figures from both parties will work together to regularly review progress and identify new opportunities to improve local services.
Tony Chanmugam, chairman of OCL and BT Group chief finance officer, said: “This is a key milestone in our relationship with Lancashire County Council.
“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.
“As a key partner to the council, BT will continually work with the council to agree how we can adapt the services we provide to help the council better serve the citizens of Lancashire.
“This is the sign of a true partnership and I would like to thank Lancashire County Council for their continued support of our strategic partnership and we look forward to our relationship going from strength to strength during the next phase.”
The council’s interim chief executive, Jo Turton, said BT was a key partner not just through the partnership but in supporting the authority on major initiatives such as the Superfast Lancashire broadband programme and creating hundreds of new BT jobs in Accrington, East Lancashire.
She 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.
“Particularly given the huge funding pressures we’re facing, this sort of support really can save money behind the scenes, while helping to protect services on the frontline.
“I know that county council employees, including our secondees involved in the revised arrangement, will work hard to make the changes a success.”