Opposition parties voted down the South Ribble Borough Council cash-saving move at full council last night, claiming it was not detailed enough and that no proper consultation had taken place.
A vote ended 21-21, with the mayor’s casting vote supporting a deferral to November.
The proposals included sharing some top brass jobs and more services with Chorley Council.
After the meeting, councillor Paul Foster, Labour leader of the opposition, stormed: “Tonight was a clear, decisive instruction to the leadership of this council that we will no longer be treated with such contempt.
“The proposals, as tabled, were clearly not detailed enough, nor were they consulted upon appropriately.
“We owe to both the residents of our Borough, whose money we are responsible for, and our employees, for who we have a moral obligation to support at all times, the assurance that when we are funnelling millions of pounds into restructuring, we are doing it in the appropriate way.
“The true cost of this exercise was being grossly understated, the governance arrangements were not clear, and fundamental to the future of the organisation, we couldn’t understand how front line services would continued to be delivered moving forward.
“We are committed to sharing services with our friends in Chorley, but the Labour Group is also committed to ensuring our staff are treated fairly and with dignity, and that taxpayers money isn’t squandered away.
“The executive now knows what’s needed to get these proposals across the line, and we have seven weeks to get this mess sorted out.
“We can assure the residents of South Ribble that all expenditure will now be justified in a way that is easily understood by all.”
Council chief executive Heather McManus had said: “These proposals, if agreed, will transform the way we work and put regeneration and growth at the very heart of what we do. It will also help us save money so we can improve our services – offering the very best value for money possible.”
She and other top management - including some interims on hugely controversial £500-a-day contracts - are spearheading a transformation of the authority in the wake of the borough’s taxi licensing scandal last year.
The plans could save taxpayers £400,000 a year, says the council.
After a debate at last night’s full council meeting, it has been agreed that a cross-party working group will be formed to examine the finer details of shared services.
There will also be learning sessions held to ensure all councillors are engaged in the process.
Councillor Peter Mullineaux, leader of South Ribble Borough Council, said: “We welcomed the report from the chief executive at last night’s meeting and fully support the re-structure proposals.
“All local councils are facing challenging times and it is vital that we look at the way we operate to continue to deliver the very best services and value for money for our residents.
“This is a big decision for the council and our staff and we are absolutely committed to getting it right.”
The proposals to increase shared services builds on a decade of the two authorities pooling resources in order to deliver value for money for residents.
The need to make savings was highlighted as part of the budget process earlier in the year, when it was revealed that the council’s budget deficit is likely to be just over £1 million by April 2018, rising to £2.6 million by 2020.
The plans are now expected to be considered at the next meeting of full council, on November 22.