Middlesbrough Council has dropped plans for a joint venture to deliver key services.
The council's executive decided in January to explore an 'alternative delivery model' with the Norfolk County Council-owned Norse to deliver services in the environment, property and commercial services department.
An initial appraisal reduced the services covered from 27 to 18, including building maintenance, school catering, refuse, recycling and green waste collection, parks management and highways maintenance.
However, the joint venture's viability depended not only on its ability to deliver savings but also to create new jobs and income while generating profit to reinvest in council services.
The council says the department must save £3.6m over the next three financial years.
It says it became clear that under the proposed arrangements it would not have sufficient control over the new company and transferred services, and that potential 'added value' could not be guaranteed.
Middlesbrough mayor Dave Budd said: 'After detailed discussions with a potential partner, we now believe such an arrangement would not achieve the added value originally envisaged.
'We are therefore proposing to continue to deliver these services in house with the existing dedicated and skilled team.'
The recommendation to cease exploration of the alternative delivery model is being considered at a meeting of the council's executive today.
