Cumbria County Council has opted to run its ICT services in-house after failing to agree terms with a third-party provider.
The previous seven-year contract with Agilisys, which covered ongoing ICT and business consultancy services, had been due to expire on 1 April.
Following a tender process, Computacenter (CC) was confirmed as the preferred bidder but the deal was not consummated as neither the council nor the services-based reseller could agree on the nitty-gritty.
Deputy leader Stewart Young told The Channel that the council had decided to bring the full service back in-house.
"At a time when every penny needs to be accounted for and spent wisely we cannot justify spending more on a service than is required," said Young.
He said the move was made following a "detailed analysis of the benefits, costs and operational features" of outsourcing and managing tech and comms via its own team.
"Today's decision also retains greater control over the long-term structure of the service at a time when local government is under financial pressure," he added.
The deal Cumbria County Council struck with CC was believed to be worth up to £10m in the first year and £33m over the next four years. Another two-year extension – which would have pushed the contract to around £60m – was also mooted.
The council declined to detail the savings it expects to make.
When the initial outsourcing deal was penned between Cumbria and Agilisys in 2005, some 85 staff transferred to the integrator.
Approximately 70 employees are now heading back in the opposite direction, with the process expected to be completed by 1 October.
Anthony Miller, MD at industry analyst TechMarketView, said Agilisys should have "smartened up" the management of IT "so what the council is taking back in-house in theory should be a smooth running machine".
The Channel was awaiting a response from Agilisys at the time of writing. ®