A collaboration between Havering and Newham to share the work of providing some council services is collapsing due to a “divergence of policy”.

The two councils began working together through a non-profit organisation called OneSource in 2014, in an effort to save money by combining teams carrying out “back office” tasks.

However, Havering Council’s leaders have now opted to return many services back to its “sovereign control”.

Council leader Cllr Ray Morgon said services which have “economies of scale” will continue to be shared but added: “Where we have got a divergence of policy between the two councils, where there are no economies of scale, we are bringing those back in-house.”

Services that will remain shared include legal and governance, exchequer and transactional and corporate business systems.

Five shared services will return in-house: asset management, human resources, ICT, procurement and finance.

Havering Council has set aside £1 million to bring services back in-house “as soon as feasibly possible”.

According to a report before councillors, Havering always expected OneSource’s shared work to be “dynamic and change over time”.

The report said that, in 2014, the collaboration made “considerable savings” and was considered a “relatively ground-breaking innovation”.

However, cracks appeared after Bexley Council, which later joined the scheme, pulled out entirely in 2020.

OneSource repeatedly went over-budget and the chief executive post has been vacant since Simon Pollock resigned in December 2021.

Its most recent finance report from November shows its overall budget of £25 million had overspent by about £5 million.

A joint committee to oversee OneSource in March last year heard Newham wanted to bring its workplace investigations service and its health and safety teams back in-house, as it “expects to be able to deliver a more cost-effective and risk-focused service”.

In July 2021, a “cock-up” in OneSource’s accounts led to more than 500 customers of Havering Council’s music lesson being overcharged by thousands of pounds.