Lambeth council will end its controversial contract to provide “communications services” to Harrow council.
It said the reason for ending the four-year contract, worth £400,000 a year, after two years is that Lambeth council officers running both the contract and its finances are leaving.
Lambeth Communications – a trading company run by the council’s policy and communications department – operates the contract with six staff seconded to Harrow in outer North West London.
In the financial year 2016/17 the council says LamCo achieved a surplus of £32,000 on the contract.
Lambeth council said the ”significant changes” as a result of staff laving would “leave a gap in contract and financial management”.
Further, the contract’s staffing budget was due to be reduced in its third year.
Lambeth communications director Julian Ellerby, who set up Lambeth Communications, took up a new job with Croydon council recently as “director of strategy and partnerships”.
In a report, Lambeth council said: “Without the current finance, contract and stakeholder management, the contract will not able to meet Harrow’s expectations and neither meet Lambeth’s need for financial return.
For these reasons, both councils are in agreement that an early exit will be beneficial for both sides.”
The contract is due to end on 1 July.
Speaking on behalf of Harrow Council, Daniel Lester said: "Over the past two years, Lambeth Communications has established a strong team and communications model at Harrow.
"The team created through the contract is now established here and they will be transferred over to Harrow Council.
"The new model will be even more efficient for both authorities as we focus on local issues and priorities.
"Opportunities to collaborate with Lambeth will continue, and we look forward to working with LamCo in the future.”
Lambeth council’s plan is to transfer the six LamCo staff working on the contract to Harrow council with their current pay and conditions.
They are already based there.
It said: “During a period of considerable change in Lambeth it is appropriate for there to be greater focus on the successful delivery of the Borough Plan.”
Remaining clients of LamCo include Plymouth city council, Croydon council, Leicester city council, Leicestershire county council, Rutland county council, Somerset county council, Huntingdonshire district council, Wealden district council, and Slough Children’s Services Trust.